Contract Management: What You Should Know

Contact management is the process of initial drafting, creating, executing, and risk analysis for the implementation of legally binding contracts. Contact management is done by a specialized person who is trained and has expert knowledge. This reduces the pressure to have legal complications and unnecessary expenditures in the future. 

In organizations, it also plays a time-sensitive role where the company policy can be safeguarded and secure. When a company lists out services a product for the customers, it is necessary for them to get free of the possibility of being sued or fined based on any mishap. A trained contract manager can help ensure the protection of the company and enhance its profitability. 

Need of Contract Management in Companies

Contract management plays an important role for the company in risk analysis. They help in taking action and protecting themselves in case any liability occurs. A fool-proof contract can help them save legal expenses and reduce the costs incurred due to fines. Since a contract clearly States the terms of action, it helps to standardize the process, based on which each party’s role is clearly defined. It is also easy to monitor and track whether or not each party is following their part of the agreement. 

Contract managers also help streamline the approval process as they intervene to ensure that the needful is done on time. As the company can rule out risk, it can increase its scalability and take it to the next level. Contract management helps in the immense growth of a company.

Roles and Responsibilities of a Contract Manager

Most companies hire their own managers to take care of all their contracts. Here are the roles and responsibilities of a Contract Manager –

• They help understand both parties’ stances and the purpose of the agreement. An agreement drafted on the neutral ground has a better chance of working out in the long run.
• They consider their client’s needs before the other party’s. 
• After dealing with both parties involved, they list down all the requirements necessary for the contract.
• Then they carefully analyze all the requirements for the country’s policy and do the preliminary drafting of the contract.
• This initial draft is then shared with both parties for reviewing, where they provide feedback and list out any sections that must be changed. 
• Such a series of contract drafting and analysis is done to exchange ideas. This helps to draft a contract finalized after negotiation by both parties.
• After approval of the terms of the contract, the final document is made, which is ready to be signed by both parties involved.

Stages of the Contract Management Process

When it comes to contact management, there are specific steps involved that every manager must follow. This helps make things easier and is simple for the clients or the people involved to understand and follow. Your other stages or the steps involved-

• Creating initial requests- The client’s needs are identified, and relevant documents are collected.
• Drafting the contract- Any initial outline of the contract is penned down, which states the roles and responsibilities of each party. In case the parties have verbal communication regarding any term, it is also stated within the contract.
• Negotiation- Negotiation refers to the act that both parties carefully understand the terms stated in the contract. They compare it for any discrepancies and bring it to the table. Both parties then discuss the same and come to a conclusion based on which the contract is edited. This happens in a series until both parties agree on the contract.
• Finalization and approval- Once both parties approve a contract, it is documented. All parties then sign the contract.
• Execution- Once the contract is approved, the parties involved can implement it.
• Management and tracking- A contract manager look upon whether or not both parties are equally adhering to the contract; if not, relevant actions are taken.
• Making necessary revisions- In case any detail is overlooked, or if any government policy changes impact the original contract, the contract manager must look into it. Based on this, they make necessary changes and amendments for both parties to sign.
• Regular audits- Audits are checks that are done at frequent intervals. This helps to generate a report to conduct a proper analysis.
• Renewal- Contracts are signed for a defined tenure. After the end of the tenure, the contracts are over. However, they can also be renewed. If there are any changes necessary for renewal, they are made before signing.

Key Terms

• Tenure– When signing a contract, the time it is applicable is mentioned. This is known as the tenure of the company.
• Contract– A contract is a legal document signed by all parties involved. Signing a contract legally states that the individual has gone through the terms stated within the contract and that they shall be binding or adhering to the terms.

Conclusion

Contact management helps set terms and legalize any action that must be done by either party involved. It safeguards the terms of the agreement, tenure, and any verbal discussions between the parties involved. If either party fails to meet the contract requirements, they can be legally sued or fined as per the contract of the agreement. 

If you are interested in making it easy to search through your contracts, LawInsider’s contract repository makes it easy for you to upload your documents and find the hidden contracts among them. From 100 to 100,000 contracts, there are no limits and no hidden fees for the amount of documents that you can organize. With secure access and encryption for all files, you can be sure that your contracts stay safe and private.

 

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References:

• https://www.contractsafe.com/blog/what-is-the-role-of-a-contract-manager-
• https://www.businessnewsdaily.com/4813-contract-management.html
• https://www.medius.com/glossary/what-is-contract-management/
• https://www.jaggaer.com/blog/what-is-contract-management/
• https://ironcladapp.com/journal/contract-management/what-is-contract-management/
• https://www.gatekeeperhq.com/blog/what-is-contract-management