As some law professors are fond of saying, “contracts are everywhere”. This is especially true in the business world, where contracts are formed and executed on a daily basis. Because most businesses, even small businesses, may handle hundreds of contracts at a time, formalizing the agreement and reducing it to an enforceable contract must be done as quickly and as efficiently as possible.
Contract management software helps in this area. As standardizing a manufacturing process leads to lower costs, standardizing contract management lowers costs on a per unit basis. From initial proposals, to counteroffers, to insertion of terms and execution are vital to any quality software program. The software package will not only have standardized terms, but will provide the company the ability to add its own custom terms. Further, it will have the ability to add further terms as the company’s business evolves.
For formalizing the contract, electronic signatures are a must. Waiting for paper signatures can add to delay and increase costs. An electronic signature feature must be set up. But it must be done so in a fashion that it is legally enforceable. The e-signature feature should be tested for this purpose. In addition to the e-signature, a form of electronic acknowledgement must be available to highlight essential provisions of a contract, or inserted where relevant law requires a separate acknowledgement.
Forming the contract is only the first step in contract management. The next area where quality contract management software is useful is in the performance phase. A fully featured management program will provide assistance in tracking and insuring performance is on schedule.
It will contain reminder dates, memorandum notes, email alerts, compliance issues, document tracking, appointment schedules, performance checking and numerous checklists. Rather than searching through numerous programs or paper files, all information needed would be located in one program. Navigation and searching become less burdensome and faster for the contract administrator.
Not all customers have the same needs and on occasion it becomes necessary to tailor either contract terms or performance. At these times, the software will need to have the capability to customize to the user’s particular job.
Fully featured contract software that covers the agreement from proposal and formation through performance is often referred to as contract lifecycle management. In some areas it is referred to as cradle to the grave contract management. When software can be found to manage and monitor an agreement from the cradle to the grave, it becomes a wise investment for most businesses, both large and small.