Clause management can be challenging for contract, procurement, and legal professionals. Manual contract administration tools such as spreadsheets, emails, and disconnected software tools prove to be less than effective or efficient ways to generate optimal contract documents and clauses - and rarely lead to fast approvals. Contract clauses can support standards and reduce contract risk when used to their potential and can positively impact your contract management process. Learn how to master contract clauses in this blog.
Contract clauses are specified provisions in contracts and other legal documents. When managed effectively, clauses can save time and reduce contract authoring errors with frequently used standard text in contracts and templates. Common contract clauses may include indemnification, intellectual property, automatic renewal, attorney fees and costs, and statute of limitations.
While contract clauses can improve the overall contract management process, many organizations fail to manage clauses effectively, inadvertently leading to inaccurate documents, more compliance and risk issues, legal bottlenecks, slow reviews, slow approvals, and delayed execution.
Ineffective clause management via disconnected and manual contract management tools can lead to longer-than-necessary document generation timelines, lack of transparency, lack of contract collaboration, incorrect user permissions, failed compliance, slower review and negotiations, higher risk, and lost deals.
Challenges with clause tracking, document editing, version control, and audit trails can result in many harmful contract lifecycle bottlenecks. Such issues may include different clause versions saved in separate files, lack of clause compliance with existing laws and regulations, and bottlenecks when documents need to be reviewed by the legal team before moving to the next step in the process.
Manual contract management may be the source of contract clause management challenges. Still, leading research also shows that approximately half of the organizations using contract management software only use it as a repository - missing out on the benefits of an advanced clause library.
Clauses can be a source of contract risk, delays, and frustration, or they can be the basis of contract management success. Clause management mastery involves standard clauses that reduce risk, include required language for contracts, streamline clause approval workflows, centralize clause version control and audit trails, and foster clause use tracking. Manual contract management processes don’t support clause management mastery, but leading contract management software can help.
1. Generate documents in less time: Enable your team to create accurate, timely, and compliant documents and contracts that merge your approved contract clauses.
2. Provide clause approval routing: Leverage advanced features to manage contract data fields, document section orders, and intelligent, automated workflows. Define rules-based clauses for each document template.
3. Control access: System administrators can set user permissions for clause version access and support compliance with full clause approval routing and audit trails. Configure rules as needed for standard clause merges, fallback clauses, and others.
The leading CLM solution for the functions outlined above is CobbleStone Software. AI-based CobbleStone Contract Insight® can help you easily centralize contracts, agreements, risk documents, and more.
Stop wasting time and money with a manual document drafting and clause management process. Here are six ways to master contract clauses with simplified clause assembly that enforces compliance and eliminates challenges around data entry errors, storage, collaboration, distribution, and formatting.
1. Merge and assemble contracts, clauses, terms, conditions, and fields based on your rules with advanced contract collaboration.
2. Leverage auto-redlining functionality - which uses AI to automatically check if uploaded documents contain your preferred contract clauses or some unpreferred version of those clauses.
3. Monitor electronic signatures with advanced dashboards, configured (automated) email alerts, and configured notifications for virtually instant status updates or one-off modifications.
4. Use rules-based terms, provisions, and fallback language that allow for intelligent contract drafting.
5. Compare if contract clauses or terms were changed from your standard contract terms.
6. Automatically receive metadata field recommendations for contract clauses to make contract legalese management easier.
7. Once fully executed, store contracts on corresponding, centralized contract data record pages with configured alerts to necessary participants.
8. Virtually ensure compliance by leveraging intelligent, automated workflow approvals, approved bid and contract templates, merging of approved contract clauses and terms, electronic signatures, and post-execution monitoring and closeout.
Clause management is made easy with CobbleStone®. Your team can easily draft and create contract documents based on your pre-approved templates and include your pre-approved contract clauses' terms and conditions. Leverage features for contract drafting, including:
Are you ready to take control of contract clauses, retain clear contractual obligations, and improve contractual relationships? See how CobbleStone Software can help you generate documents in less time, improve permissions and compliance, and negotiate and sign faster.
If you are ready to see CobbleStone Software in action, book a free demo today!
Build your contract management skills further by reading additional blogs in the Mastering Contract Management Blog Series.
This blog post was originally written on October 14th, 2021 and was updated July 19th, 2024.
*Legal Disclaimer: This article is not legal advice. The content of this article is for general informational and educational purposes only. The information on this website may not present the most up-to-date legal information. Readers should contact their attorney for legal advice regarding any particular legal matter.