Data Privacy and  Modern Contract Management

Data Privacy and Modern Contract Management

Written By
Joy Cunanan
Updated on
July 10, 2024
Reading time:

Government rules like GDPR and CCPA, which have a significant impact on data management in today's business environment, have increased the need of protecting personally identifiable information (PII). Serious repercussions for noncompliance include hefty fines and incarceration. 

Data protection is essential to contract management because contracts contain vital information about you and your counterparties. In addition to being required by law, protecting contract data is an essential step in building customer and supplier confidence, enhancing brand reputation, reducing business risks, and adhering to modern business standards. To prevent data loss or breach, you must make sure that your business invests in complete CLM systems with data protection capabilities.

Laws governing data protection need a specialized method of vendor management. The controller should take steps to ensure the processor is in conformity with the relevant laws because controllers are responsible for what their processors do with their customers' and employees' personal data. To reduce security and privacy threats related to data, a vendor management plan is essential. 

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Regulatory Compliance 


On May 25, 2018, the new General Data Protection Regulation (GDPR) went into effect. It imposes new requirements on how organizations handle data privacy and is intended to protect the data privacy of EU residents. To achieve compliance with the new regulation, you might need to review your contract management procedure.

Higher standards are placed on businesses that handle personal data as a result of the General Data Protection Regulation. Regardless of whether you're a "controller," choosing the reason and means by which personal data is used, or a "processor," taking care of personal data on behalf of a controller.

A violation of the GDPR could result in severe penalties. Up to €20 million, or precisely 4% of the global turnover. To achieve GDPR compliance, some businesses still need to revamp their contract management procedure.

Contract Storage

Although you and your clients currently place a high priority on data protection, the GDPR may add or clarify some responsibilities. According to Article 5 of the legislation, you need to be protected from things like illegal entry and the unintentional loss or destruction of personal data.

To accomplish this, you need collect all of your contracts that contain personal data, ideally all of them, in one (and secure, as will be discussed below) location. Essentially, it will be simpler to comply with the new regulatory requirements if there are fewer systems that hold personal data (such as contracts).

You will obviously want a safe platform for storing all of your contracts that involve personal data in addition to having them all in one location. To ensure that your data is transported securely, use a system with Transport Layer Security and a top-notch crypto-suite. Additionally, you should make sure that your cloud service provider upholds a high standard of physical security. This requirement is frequently met when your contract management solution is hosted in safe data centers.

It's also critical to establish workflow-related security controls and be able to restrict internal access. As a result, you should search for features like user-level access controls, automated approval workflows, and, of course, two-factor authentication.

Convenient Access to Data

The GDPR also seeks to safeguard the fundamental liberties and rights of individuals, which translates into more sweeping protections for the people whose information you handle.

You've probably heard of the right to data portability and the right to be forgotten by this point. Your contract management solution must make it simple to identify and delete contracts that contain personal data in order to guarantee adherence to these rights. For example, you can accomplish this by using robust searching and filtering tools, which will make it easier for you to find the contract you're looking for quickly.

To express the obvious, one of the most significant reasons to say goodbye to your physical binders is the lack of search functionality. not the least because of the new rule.

Control Over Contract Authoring

As was already mentioned, the GDPR increases your company's obligations for managing personal data.

If the processor goes beyond the scope of your given authorization, they are nonetheless accountable for the data they process on your behalf (and vice versa). Therefore, you must ensure that the actions of your third-party processor are legal.

In light of this, it's crucial that details like the processor's obligations are crystal apparent. The contracts you use with anyone who manages personal data on your behalf must now meet greater standards.

As a result, we advise using contract management software with cutting-edge contract authoring features. The skills to seek for here include, among other things:

  • create templates that may be used by the entire business, including standard clauses and fallback alternatives, and
  • provide guidelines for end users to modify contracts (which often is combined with an interview-based way for end-users to draft contracts, instead of copy-pasting in a rich-text editor).


In addition to enhanced e-signatures, a solution with contract drafting capabilities will make compliance even simpler. preferably in two ways.

The new legislation first and foremost establishes stringent requirements for obtaining consent to process a person's personal data. E-signatures can help you better meet the standards since the permission of the individual must be clear, informed, particular, voluntarily offered, and documented. especially because it is simpler to obtain consent right away at the time of data collection thanks to e-signatures.

Second, the new law specifies a number of requirements for agreements between data controllers and data processors (e.g. a system provider that processes the personal data you control). As a result, many companies are compelled to alter their contracts with third-party suppliers for the processing of their data.

Advanced e-signatures can expedite the process of changing the contracts to comply with GDPR standards when used in conjunction with the contract authoring capabilities previously mentioned. E-signatures will speed up the signing process and provide you complete visibility into every contract's status, including who has not yet signed it.

Audit Trails

Another crucial element of GDPR contract management compliance is time. You should keep track of specific events in contracts because GDPR article 5 also states that data should not be processed for any longer than is required to achieve the purposes for which it is processed. Additionally, a clever reminder engine for the tracked occurrences is preferred.

You can greatly benefit from using a system with event tracking across the whole contract lifecycle. Event tracking can be used to speed up the processing of your personal data while also helping you remember other deadlines, such as those for obligation reporting, contract renewals, and renegotiations.

Remain Compliant With Lexagle. 

What exactly can Lexagle do for your company? 

Manage User Access for Maximum Versatility 

Our platform can manage and restrict the access of users and counterparties. The access of users is governed by our Admin Control Panel. Lexagle uses role-based access control (RBAC) to manage access to features. We also use permission-based access control (PBAC) to manage data controls within features. Lexagle understands that every organization is built differently, and our approach to access management allows for maximum versatility for our users. 

Secure Confidential Information and Control Data Deletion

When your organization stops processing contracts, you also get to define how long before the information on certain contacts are deleted from the platform. Lexagle can set a timer for expiry of a user’s access to the platform. Your assigned administrators can set your organization’s data retention policy within Lexagle. For some, it would take 3-5 years before data is fully wiped. In the meantime, all your data will be securely archived within Lexagle.

Safeguard Your Transactions and Data

Lexagle has the following features to protect your company, which can be categorized into two: (1) safeguarding transactions and (2) safeguarding data. 

Safeguarding Transactions includes 2-Factor Authentication, Single Sign-On and compliance with SOC2 Type I and ISO27001.

Safeguarding Data includes compliance with SOC2 Type and ISO27001 and utilization of AWS Macie. 

Monitor Audit Logs and Organization-wide Settings

Lexagle leverages on AWS Macie for data leak protection. AWS Macie uses machine learning to automatically classify sensitive data stored in the cloud according to data privacy regulations (i.e. GDPR, PCI-DSS, HIPAA).

Book a demo with us today to find out more. 

Data Privacy and  Modern Contract Management
Joy Cunanan
Joy is the Digital Transformation Manager at Lexagle. As a marketing professional in the Tech and B2B industry for over seven years, she is always on the lookout for the next best solution in the ever-changing online world. With a passion for helping businesses thrive and optimize operations, she shares her expertise in the power of contract lifecycle management and its capacity of easing the contracting process for busy organizations worldwide.

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