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.
Software can help corporations to enter into highly intricate agreements with dozens of parties across time zones and execute legally binding, business altering contracts - in a faster and safer way. But up until recently, that process had significant drawbacks, particularly during the negotiating and editing phases of a contract life-cycle.
From purchasing a home to taking a company public, commercial contracts at every level of complexity are mired with delays and errors -- costing corporations $ millions in losses. When all parties finally agree to the terms and conditions, and the contract is signed, there can be hard feelings, damaged relationships and too many manual resources tied up in the protracted buy/sell process. The frustration that comes with negotiating a contract can actually morph into a deal simply not getting done at all, and with that failure, a missed opportunity. Parties are left with the significant resource expense of the process, but not with a favorable outcome, which doesn’t sit well with the CFO.
During the contract drafting process, legal teams will make changes to 100+ page contract templates by hand, or by using word processing software that indicates changes to the standard/default language – with ‘redlines’. These changes then have to be sent to internal reviewers / approvers by manually (with emails and file attachments), prompting further changes, further redlining, and further frustration. Often, it becomes unclear who made what change and when and in what order, which can lead to undue risk exposure, which will give your General Counsel (GC) heartburn.
To significantly reduce the cost, timing, and frustration of contract creation and document assembly, large corporations are turning to ContractRoom for a solution. The ContractRoom cloud platform has revolutionized the way decisions are made and deals get done by fully automating and streamlining the process for the full end-to-end negotiation and contracting life-cycle. This is helping enterprises with thousands of sales and procurement professionals to get through the contract creation phase quickly, efficiently and cost effectively.
This is the 1st in a series of 5 blogs on ‘CLM Modules’:
- contract drafting (blog 1)
- contract assembly (blog 2)
- contract operations (blog 3)
- contract management (blog 4)
- contract compliance (blog 5)