Contracts vary in their structure, complexity and goals, but they can safely be defined as legally binding agreements between two or more parties made voluntarily. They are frequently multi-layered and subject to endless back and forth negotiations before they are finally executed, but they share a similar language that helps streamline their creation. It is important to always read and understand exactly what is expected of you before signing a contract, but with a handy glossary of basic contracting terms, you can get know at a glance the terms you’ll see more than once during the contracting process.
We’ve got smart phones and smart houses. The way we live and work has become immeasurably more interesting and efficient because of our technology. The same is true for contract negotiations and the future is looking even smarter. With emerging technology like Blockchain, contract lifecycle management (CLM) can be further revolutionized through self-execution, transparency, and mass collaboration.
Nothing can strike fear into the hearts of attorneys or businesses like “breach of contract.” Contract negotiations are tedious, exhausting and overwhelming. When a hard fought executed contract is found to be non-compliant, the results can be devastating to all parties involved. While a simple verbal contract, which meets minimal criteria can be legally binding. For business transactions memorialized in writing, contract compliance is significantly more rigid and complex.
It is not uncommon for businesses to focus all their efforts on an initial contract, and then feel that contracting work is done, only to realize there are many activities that carry forward, such as a renewal or amendment. Therefore contract management can be as important, if not more important, than that initial contract, such as a Master Agreement. Effective management of your negotiations, contracts and the contracting process can be the difference between a fruitful business relationship and a damaged one. It can ensure the seamless renewal of a contract, or precipitate a contract termination or worse still, costly and time-consuming litigation. Yes, ‘breach of contract’ is a real thing and subsequent legal claim and litigation can be a huge distraction or even tank a company.
In a perfect world, business and legal activity would flow smoothly, employee productivity would be peak levels, and work/life balance would be mandatory. But, since the world is far from perfect, corporations and their employees must do their best with imperfect environment. However, much of the business world is seeking a transformation of internal operations to achieve greater efficiencies and outcomes. With respect to the operation of business transaction contracting, there are several success stories of corporations embracing technology to help foster and achieve success – the key though is to lay the proper foundation which in some cases requires re-engineering process flows.
While every contract has unique characteristics specific to the commercial transaction, there are certain features that lend themselves to standardization. Indeed, most contracts have been assembled by business and legal teams with a ton of “cutting and pasting” from various contract templates; however, with a lack of systemic control. This can create what is known as content customization, worse yet and a ‘legal exception’ given the amount of complexity and risk a simple word change can generate. That is, content changes in the document assembly process can trigger a significant change in the intent or context and not be caught by the ‘naked eye’ in such process. So, if your company is a behemoth, or the proverbial “800 pound gorilla”, then maybe you can get away with just locking down your assembly process so no internal changes can be made. And even not allow for editing or negotiation with your counterparty.
In every society throughout history, legal contracts have played an important role in day-to-day business activity. The concept of a voluntary and binding written or expressed agreement between two or more parties to provide a product or service for some type of compensation was as familiar to the citizens of ancient Rome as it is to us today. The difference between contracts long ago and now was perhaps the higher percentage of “handshake” agreements, as well as with 'much' less legal complexity.
The need for configurable software applications in the large enterprises is becoming more and more of a necessity. Instead of customized solutions, which are essentially company specific, buyers are now demanding applications that evolve with ‘digitization’ best practices and are flexible enough to be altered easily as these practices are shared. Better still, many companies are in the midst of transforming processes and operations to improve overall efficiencies and productivity; however, it can require a lot of fine-tuning (and custom coding) to optimize the current environment when dealing with clunky legacy systems. Unfortunately, with a custom built tool or application, you just can’t get that flexibility and are stuck with the ‘as is’ or face costly change orders. Conversely, by providing configurable applications, developers are ensuring that these applications are easy to maintain, alter and scale as industry standards evolve, and company needs are harmonized and optimized. So, what is the process?
So, you’ve taken the plunge and acquired configurable software for your business. You’re thoroughly convinced that cloud-based software is the future and the future is now. You’re committed to steering your company in the direction of innovation and progress so you can stay competitive and exceed your goals. You’ve done a careful audit of what your organization needs and you’re ready to reap the benefits of configurable software. So what exactly are the benefits?