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This article has been written by Shalini Shrivastava pursuing the Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho. This article has been first been edited by Ruchika Mahapatra (Associate, Lawsikho) and Dipshi Swara (Senior Associate, Lawsikho).


Contract creation can be challenging for contract, procurement and legal professionals.  Manual contract creation is often complex, time-consuming and prone to many errors. Additionally, manual approaches to document assembly can put organizations in an uncertain position and hence, face bottlenecks, compliance issues, risks, fines or legal implications. However, we have transitioned into a digital era and it is about time that we start managing the creation of contracts in a much easier and simpler way. Through this article, the author seeks to discuss contract generation, automated contract generation and takes the reader through various stages of contract generation and management. 

What is contract generation?

Contract generation is nothing but the assemblage of contracts and other required documents. This process starts with requesting a contract and moves to the creation of contract, contract negotiation, approval of contract, signing of contract, and finally the termination of contract. The creation of manual contract requires the aid of legal and IT teams to help them with the creation of document, as well as with aspects of data entry, formatting of the contract, contract storage, distribution of the contract, and finally collaboration of the whole document into one contract which eventually leads to the legal and IT teams being busy which in return does not leave them with enough time to focus on more mission-critical businesses. 

The creation of contracts is a complex challenge for all organizations. Productivity of the company or the organization, in general, reduces when multiple people are involved in the process of drafting, reviewing, and revising contracts. It can also lead to the wastage of time by creating documents, downloading templates, searching for information, and manually entering data into hundreds of fields. Also, static documents are deprecated and the risk of errors increases if the correct document version and template are not clear. If the template-approved language and clauses are not up-to-date or standardized, this can pose a major contractual compliance issue. 

What is automated contract generation?

Contract automation is an efficient solution for the contract creation process. The contract creation software which is also known as automatic document assembly software helps in simplifying the process of creation of the contracts by eliminating the bottlenecks in them. However, by the usage of standard contract templates and the libraries of pre-approved clauses, the process of creation of various types of contracts can be simplified. It often includes a perfect combination of document templates and terms, a secure storage of documents, comprehensive version tracking and a seamless approval workflow. The business users can experience a complete transparent and supportive review and approval between all the internal and external stakeholders. 

The automated or automatic contract creation system promotes collaboration and accountability by supporting transparency and by providing a complete and accurate trail for auditing. Accuracy, speed, and consistency translate into reliable returns on investment for contract generation solutions.

Stages of contract generation

Contract generation can be done by the use of contract lifecycle management or the CLM. The contract lifecycle management (CLM) is the management of an organization’s contracts started through implementation, performance and renewal date. 

The management of the effective and proactive contractual cycle is achieved through the use of the contract life cycle management software. The use of cycle management contract software can lead to significant improvements in savings and cost-efficiency. Understanding and automation of cycle management contracts can also limit the exposure of a risk to the organization by reducing the obligations missed and the increase in compliance with the legal requirements. 

While all these steps in the management of the contract cycle are fundamental, some passages have traditionally received more attention than others.  For instance, the software used for the management of templates of contracts is available within most of the organization. 

In recent times, with the increase in tools, such as artificial intelligence and automatic learning, post-execution contract management has received more attention than the possibility of accelerating, protecting and optimizing companies. 

So, let us take a closer look at each phase of the management of the contracts and the way in which the contractual cycle management software can improve the process.

  • Template Generation – It simplifies the organization’s original library, which can greatly improve contract risk management and speed up contract prices. It also allows designated users to create smart templates to draw library terms in documents, enter custom text and metadata tags in documents, and characterize other data, such as exhibitions and allowances. These rules ensure that the new template continues through the approval process before it can be used in the contract.
  • Contract Creation – The extensive control mechanism of the contract lifecycle management software enables you to dynamically create contracts based on templates and conditions. Use of any contract-related criteria like for instance region, product, service or price conditions, etc. automatically records the content of a contract. The rule-based programming capability significantly improves the scalability and flexibility of the operations of a contract and ensures correct process control. 

Advanced contract lifecycle management software can even implement contactless contract creation in business systems such as CRM, sourcing, and procurement by accepting input data and automatically generating contracts according to predefined business rules. Even with the best solution, batch data loading and contract creation are possible. By enabling business users to create self-service contracts, companies can reduce revenue generation and cycle time, and significantly reduce statutory operating costs.

  • Contract Review – All contracts are designed to help the companies achieve their business goals. Through intelligent, automated contract analysis, companies can fully realize the potential of contracts by complying with business conditions in a much better way. Contract lifecycle management software captures the terms and conditions, prices, rebates and rewards of products and services in a structured form and integration of these data into company systems and helps ensure compliance. The workflow provides a verification process to assess compliance, and then submit them to the financial system for billing.
  • Contract Approval – A successful contract approval begins with the use of all data associated with the contract by using a rule-based workflow definition. The best in class contract lifecycle management software automatically creates workflows and coordinates the approval process with support for sequential and concurrent approvals. The workflows change dynamically based on the reconciliation updates to maintain control. The business users can effortlessly manage intuitive rules, definitions and updates, and can also manually intervene to influence the workflow through specific steps.
  • Execution of Contract – Execution of contract or in other words contract processing is now mobile and heavily digitized. An NFL quarterback while sitting in a fast food parking lot executed and signed a $ 10 million contract using his cell phone which would have been unimaginable a decade ago. Contract lifecycle management software should include an integrated electronic signature platform such as Adobe Sign. These security integrations help organize the signing process according to the user-defined workflows, while documents and data are seamlessly updated back to the central repository after execution. One should also use QR codes to handle manual signing workflows to verify incoming signed documents.
  • Performance of a Contract – As mentioned earlier, the process of post execution of a contract for a long time has been beyond the purview of digital solutions. This is because the contract language for computers is difficult to understand and analyze. It is for the human manager’s contract actions. However, this is no longer the case anymore because now-a-days, contract lifecycle management software users can receive valuable insights into all internal areas, finance, sales and tender. Contract lifecycle management software contains a complete analysis module that enables insight into the data such as cycle times, deviations, savings, risks, expiration date, expansion statistics and procurement and sales statistics on contract sales and expenses.  

Users can also receive better compliance with contract liabilities by definition, recording, allocation and monitoring tasks with entrepreneurs, which are also involved in complex commitments like those with multiple owners or between regions or business units. Users can easily create tasks in the web interface or Microsoft Word, and the tasks can be assigned to the owners by following the rules laid down. Also, the user can spot risks and manage these risks after the execution of the contract. 

A configurable risk model helps to identify risks associated with different categories, such as financial, contract, performance and third parties. Users can search and use internal data, as well as external data from sources such as D&B and Thomson Reuters, to determine risk scores, ensure the monitoring of a proactive risk and enhance the visibility for the stakeholders.

  • Expiration of a Contract – The contract lifecycle management software provides proactive alerts and notifications on critical milestones, including the expiration of a contract or renewal of a contract. The customizable dashboard provides insight into the expiration or renewal of business impact, so that the contract holders won’t be surprised.


Creating a contract with the help of contract lifecycle management software makes the work easier for the organization’s employees and it saves the time and effort of these employees. The rapidly growing digitalization process has popularized the use of contract lifecycle management as it aids in lowered legal and administrative costs; strengthened regulatory compliance and reduced manual processes and the associated risks. 


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