This article has been Lalbahadur Pal, pursuing the Diploma Programme in Advanced Contract Drafting, Negotiation and Dispute Resolution in LawSikho.

Introduction 

The common approach of all stakeholders is that once the contract is signed it is done, no need to go back and check it, locked away to gather dust and is to be opened only in the event of a dispute. This is a very dangerous approach, which limits the ability to maximise the profit on a contract. Through effective management of the contract, the stakeholder can ensure that a contract is administered in accordance with its terms and achieve in maximising profit with minimum risk.

Due to COVID 19 pandemic outcome, all businesses are forced to change the way they operate, utilizing contract management software. Stakeholders are reacting quickly like digitalization is more in demand as compared to others. The work-from-home model has taken most of the headlines, however, stakeholders are currently evaluating for other better options as well.

Basically, management refers to the process of managing the curial think in such a way that the party can able to track or follow the important event to complete the goal and contract management software is one of the tools through which every stakeholder can able to manage its all agreements, contracts, deeds and binding documents on them, in such a way that the party can able to track or follow the important events, obligation, rights, and liability to fulfil in time-bound manner.   

In like other fields, the software has also become one of the fields for contract management and it is very important. The contact management software has reduced the time to manage the contracts in a professional manner and also minimised the errors and reduces the risk associated with psychical handling of the contacts and legal documents.  It helps to free up the time of lawyers, professionals, and Companies.  

Contract Management Software helps the lawyers and professionals in every stage of breach of contract by the opposite party, and lawyers & professionals are able to take required action against that defaulting party in a smooth manner. 

In the duration of the contract, the requirement of the contract management software is sought to be looked into. 

Stages of contract management

The Contract Management Software cover below stage:

1. Preparation: Every contact based on needs, goals, expectations and risks. So it needs to properly identify the needs, goals, expectations and risks that require a contract to make any decisions much smoother. Through Contract Management Software we can smoothly figure out the aspects and prepare the contract. 
2. Author the Contract: In case of uncertainties, consult an attorney or counsel to make sure that all the information is updated and all required and applicable clauses, terms and conditions are included. Every contract requires proper attention to specific wording, else it leaves ambiguity upon interpretation. The contract should also mention governing laws. 
3. Negotiation of the Contract: Negotiation almost follows even though negotiation has been taken at the time of research, preparation and planning at the time of the drafting of the agreement. By using Contract Management, negotiation will become easier as both parties can view the working document and the negotiation in real-time.   
4. Approval:  Post the negotiations, both parties’ needs to take their respective manager’s approval for the execution. In case of MNC or larger stakeholder has their specific approval procedure, audit and finalization process.  For example – in case of any procurement agreement approval required from multiple departments such as HR, Admin and Account to check their specific compliance as per their internal policy.     
5. Execution: this stage is one of the simplest parts of the Contract Management subject to sign by an authorised person.  
6. Amendments and Revisions: Amendments and revisions of the Contract are common in the lifecycle of a Contract.  To track and check the effectiveness of the amendments and revisions may be confusing. So it is very crucial that both parties shall fully aware of the latest amendments and revisions that took place in the contract. 
7. Obligations, Auditing and Renewals: the agreement/ contract management will not stop once the contract gets executed, doing regular audits, follow up the obligations and track the renewals also required to post the sign off of the contracts.    

Advantages and key functions

The smooth contract management software has various advantage and Key functions such as below:

The most basic need for every contract management software is that, well before timely intimation about any deadlines such as renewal and report, to fulfil obligations under the contract so that no obligation and liability under the contract get unfulfilled.  This process leads to savings and avoidance of losses.

The other basic need of the contract management software must figure out the proper mode or process to fulfil obligations under the contract.  Every contact management software has an authentication process for every user of the software to monitor each and every action by the manager. The contract management software also avoids the issue which comes from wrong authorisation and unauthorised order on behalf of any stakeholder.   

The online contract management software, enables and fulfils all requirements of the contract management. Though contract management the concerned person automatically gets notification for the renewal. The concerned person/ contract manager is able to access any contract from anywhere and check the requirement, obligation, liability, breach of the contract by the opposite party quickly and easily.  The contact management software gives enough time to view and save the costs and also help in the negotiation process.  

Contract management software helps the contract manager and professional to safeguards legal documents and contracts, which is a huge advantage in case due diligence is undertaken for an investment or other transaction.

The smooth contract management software eliminates the difficulties which hinder business growth and manages compliance with the all report event. 

Streamline administrative tasks

Every stakeholder is spending a lot of time taking administration activities. These activities also include management of contracts, agreements and legal documents. Through contract management software every stakeholder can run its operation at an optimum level. Streamlining these tasks through contract management software will help stakeholders  save time and money effectively.

Every stakeholder can avail the benefit through use of contract management software and boost the management of the contract smoothly without any extra hassle.

Reduce overhead by providing a single unified process

Contract management software is very helpful for all the stakeholders to reduce the overhead expenses without any extra effort. The stakeholder can define the one standard process through contact management software and they can achieve the targeted reduction in overheads.  

Due to delay in execution of contract or agreement the overheads cost increase and this delay can be avoided through contract management software by stating standard process flow and turn around time to revert internally as well as externally on the contract.

Manage new contract request

The new contract means new business, new venture, new customer, new vendor and these factors  are very important for every stakeholder for the development; as this will lead to success and help in achieving the expected target or goal of the stakeholder. This is why managing the new contract request is one of the crucial phases for the Stakeholder. The stakeholder will be  able to manage all new contract requests well before the deadline for submission date through contact management software. This contract management software not only sends alerts for revert and follow up but also suggests alternate templates to reduce the negotiation for smooth execution and closure of a new contract.  

Capture data

One of the best advantages in contract management software is that the data gets captured on real-time bases and gives the exact obligation, right and liability of the stakeholders to the contract manager and professional. It is very important for the stakeholder to have updated obligation, right and liability to meet the obligation and take the optimum opportunity within time.

Contract creation and negotiation

To create a contract every stakeholder needs to negotiate for optimum utilization of opportunity available with them in order to develop. Through contract management software, stakeholders can set a standard process flow to create and negotiate all the contract so the creation and negotiation of the contract are more effective without any delay and confusion with a limited human resource that benefits the stakeholders significantly.     

Conclusion

Like many stakeholders are rethinking their supply and demand chains, the stakeholder should also think about implementing contact management software tools. so This can help them  avail the benefit associated with the contract management software during this COVID-19 as well as post-COVID-19 and scrutinize its business risk and contractual provisions that affect the development. Such as the  force majeure clause. Through this contact management software, stakeholders will be able to rapidly find all the contracts with or without force majeure clause and be able to take the right available under the contract and also find out the alternate way which doesn’t have this clause.

Post COVID-19, contract management software will likely pay dividends. When contract management software is integrated with contract generation and e mode execution this software will help to send redlines back with proper authentication to each concerned stakeholder. Stakeholders will sign to faster and more competent negotiation with less human intervention and with any delay which they face without the contract management software.

Through the contract management software, stakeholders are able to create contracts or agreements with the required terms and conditions within minutes without any further delay. The traditional approach where the contact manager manages the contract in traditional methods such as in excel, which lead to inadvertent errors. But through contract management software management of the contract is automated and the chance of errors gets reduce with lesser human resources and a more effective manner which stakeholders never think of before. 

Contract management software allows stakeholders to create a consolidated legal database which acts as a source of all contracts and agreements including any legal documents. Apart from that, the stakeholder can have a log of all activities taken under the contract in one place, through contract management software. 

Sources 

1. https://www.mayerbrown.com/en/perspectives-events/publications/2020/05/contract-management-demands-a-modern-approach-in-the-age-of-covid-19 
2. https://www.dentons.com/en/insights/alerts/2018/may/27/the-art-of-good-contract-management

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join: