After approval, the contract is ready, but is still not signed. Contracts require signatures to be executed. However, signing a contract is not as easy as it seems. While some contracts are printed and signed in person (“wet signature”), more and more companies are relying on electronic signatures. Obtaining an electronic signature requires compliance with all applicable signature laws. These laws vary considerably from jurisdiction to jurisdiction. ClM software can help: CLM not only ensures that signatures are compliant, but also automatically sends signature requests after approval. “The most important aspect of contract management software is that it allows employees in multiple locations to access contracts in one place,” Powell said. What types of contracts do you need to manage and in what volume? These three basic phases are an easy way to look at contract management in three phases, but the process is more complicated than that and can be considered in several phases depending on how accurately you take a view. We will give a more in-depth look at the process later. It is important that both parties fulfil the obligations and commitments set out in the contract. To ensure full compliance, you need to be aware of all obligations and maturity dates.
You also need to know when the obligations of the other party are due. The easiest way to do this is to use automated alerts and tasks built into the contract management software, so no new dates are missed. There are three phases of contract management. The pre-execution phase includes everything from the initial request to the creation and negotiation of the contract, both internally and with third parties. The execution phase includes the signing and conclusion of the contract. The post-execution phase includes the performance of obligations, reporting and archiving of the contract. All active contracts go through all three phases – and these phases can be automated and streamlined via contract lifecycle management (CLM) software. When a contract has expired and the expiry date is due, the parties may take several measures; You can terminate it (close), renew it and keep exactly the same conditions or renew it, but with different conditions.
For a contract to be legally enforceable, agents or signatories of both parties must sign it. These signatures can be physical or electronic. Physical or “wet” signatures can be signed in person, in the presence of all parties, or sequentially remotely by transmitting the contract between each party`s offices. Electronic signatures can be made simultaneously by both parties in a shared Word or PDF file, or using contract management software. Electronic signatures offer a much faster and superior user experience, as contracts can be signed from anywhere on any device without having to print, sign, scan, and email contracts. They are also safer and legally binding since the E-SIGN law of 2000. As soon as all approvals have been obtained and both parties are satisfied with the conditions set out in the contract, the contract enters the signing phase of the contract. This person, who is executed by a senior employee or a person with signing authority, will sign the contract and essentially “approve” its performance.
Every General Counsel knows that negotiating terms is one of the most critical stages in a contract`s lifecycle. Productive and effective negotiations depend on good preparation. One aspect of good preparation is to have the expected positions, documents and results in one place. The CLM software can serve as a repository for these purposes, making it easier to request and approve changes. With a powerful CLM solution, General Counsel can save a lot of time on administration. This, in turn, frees up resources for the most valuable substantive aspects of the negotiations. What common problems have occurred in the past or what problems can arise when managing a typical contract? Well-drafted agreements should include regular opportunities for review and approval. Depending on the agreement created, internal and external reviews may be required. Anyone involved may be aware of different types of information, some of which may be confidential. This is especially true for companies with more than 500 employees.