Stages of Contract Management
The goal of contract management is to effectively manage contracts, agreements, and entities by properly planning and executing the six stages of contract management–resulting in reducing, eliminating, or mitigating the financial, legal, and procurement risks. The six stages are Drafting, Negotiations, Approvals, Signing, Storage, and Retrieval.
When it comes to drafting, there are three main ways a contract can be drafted. The contract can be drafted based on a contract template or can be drafted by internal stakeholders like the company’s legal team or external stakeholders like external lawyers.
Following that, contract negotiations involve confidential discussions with parties inside and outside the organization. The negotiation process is typically very fluid and it is critical that all aspects are tracked properly to ensure that agreed requirements are duly reflected in the contract.
Prior to the signing of the contract, the approval process is done by reviewing, editing, and collaborating on a document to ensure the stipulations in the contract contain what has been discussed.
Finally, the contract is ready to be signed by the authorized signatories.
Once the contract has been signed, the parties involved will now be able to store the contract along with other documents that support the contents of the contract.
Lastly, retrieval is made easier through the contract lifecycle management platform as it makes it easier to locate and retrieve documents related to the contracts in case it is needed.
The stages are essential in ensuring that both parties involved are protected and are legally liable for their stated obligations. This also ensures that both parties have reviewed the contract well enough for them to properly identify if any of the terms and conditions do not meet their business needs.