web analytics

Contract Authoring: Everything You Need to Know to Get Started

contract-authoring

The stage where a contract is drafted is called contract authoring. As simple as it sounds, the process of authoring a contract is no easy feat. Contract authoring involves considering and understanding the needs of both parties while drafting clauses in standardized format.

Contract authoring is never a one-man’s job. It involves several people and teams within the company as well as teams of the contracting parties. This further makes the process all the more time-consuming. Here’s a lowdown on what you need to know about contract authoring:

How does contract authoring begin?

Contract authoring begins from the time two or more parties agree to do business mutually where there’s exchange of goods and/or services for a stipulated sum of money. Once the contracting parties have decided to enter into contract, the authoring process starts with the drafting of contractual clauses.

Earlier, typically a lawyer would draft a contract including legal frameworks, and clauses while coordinating between parties and teams. However, over the years contract authoring software has automated contract management that involves drafting as well as acquiring signatures, editing, and finalizing the contract.

Use of templates for contract authoring

With the help of a contract lifecycle management software, businesses today may create a pre-approved library of contract clauses and terminology, merge field data and contract clauses and create their own templates for future drafting. This is a one-time feeding process where once the library has all the contract related data, and clauses, the same can be used for future referring and authoring.

A good CLM software will have features such as a centralized clause library or a unified system for facilitating accuracy during drafting of contracts.

Best practices during contract authoring 

1. Elaborate and explicit 

CLM teams must ensure that contracts must be detailed, and inclusive. This means contract authoring should involve explanation of key contract provisions to front line project managers or any other active participants involved in the execution of contracts. The same should be written in the contract with explicit explanation and notes.

2. True reflection of the agreement

When the two parties agree to do business together, they give each other permissions to carry out the task within a specified process. During contract authoring, the entire modus operandi must be taken into consideration in terms of the deliverables, timelines, mode of payments, frequency of payments, quality parameters etc.

3. Legal considerations

A contract by default is a legally-binding document. It must include compliance of all the applicable statutory or legal requirements. These legal provisions must be clearly explained with references to the actual laws.

4. Clarity of scope of work

The scope of work should be clearly defined. It should include duties and responsibilities of both the parties, timeframe for the execution of the project, exact deliverables of both the parties among other things.

5. Clarity of language

While a contract will flow in a legal language, utmost care must be taken to draft sentences correctly. The language has to be clear enough for both the parties to understand their duties carefully and refer to the contract in future. In case of disputes, it becomes crucial since many third parties and arbitrators have to go through the contract and help you get out of the dispute.

6. Recourse for settlement of disputes

During the authoring stage of the contract, it is wise to consider probable dispute scenarios and determine a comprehensive dispute resolution clause. These considerations may be choice of venue, choice of law, choice of language ( in case of international contracts), permission to third parties to resolve disputes etc.

7. Consistency

A good contract authoring tool facilitates consistency of contract clauses throughout the document. During contract authoring, such a tool provides definitions and terms that aid in the process. All the appendices, annexures etc should be properly organized, defined and identified so there’s no confusion during the signing stage.

8. Details of banking and payment modes

Banking and payment norms may vary from state to state and country to country. Sometimes these laws are stringent. If there are work-around ways used in the contract to avoid bank fee or penalties, they should be clearly defined during the authoring of the contract.

Reasons why contract authoring is important

1. Efficiency of contract management:

Good contract authoring ensures that contract lifecycle management would be efficient. Authoring is the foundation of the contract, and so much care should be taken while drafting the contract.

contract authoring

Contract Authoring – Create, Collaborate, Negotiate and Execute contracts with ease and speed.

2. Fewer disputes

When probable dispute scenarios are worked out in advance, it leads to fewer disputes in future. These disputes and their resolutions are often worked out during the contract authoring stage.

3. Execution of the contract

Another advantage of proper contract authoring is that it leads to the correct execution of the contract lifecycle later.

E-Signature tools

A good contract authoring software will also have e-signature tools to ensure that you have all the approvals while drafting the contract, and when one or more parts of the contract is completed, it can be signed immediately by the concerned parties.

eSignature

eSignature: Send contracts for review and signature, file them in a smart repository, and extract contract metadata to make data-driven decisions.

How does a good contract authoring tool help?

An AI-based and cloud-based contract authoring tool or a contract management software accelerates the process of authoring as well as managing. Here are some clear benefits of such a tool –

1. Automated workflow

CLM tools provide an automated contract drafting workflow that helps perform all the necessary tasks step by step. For instance, such a tool will help you evaluate existing templates, identify applicable clauses, and parameters among other things.

2. Easy editing

One of the biggest tasks in contract authoring is version control of the documents as various parties and people make edits and amendments in the document. A good contract authoring tool facilitates editing within the document while keeping various versions so everyone knows the latest changes, and edits can be performed in real time.

3. Additional tools and security

Another vital feature of a contract tool is additional tools such as editor, e-signatures, clause library that further adds to the efficiency of the process while saving time. Such tools also come with authentication gateways to ensure maximum security of the contract data.

Revnue aids businesses in efficiently authoring and drafting contracts through an intelligent cloud-based CLM solution. If you find yourself often stuck at the contract authoring stage, do give us a call.

More Resources:

What is Contract Repository?

7 Essential Tools in a Contract Management Software for 2023

Common Contract Drafting Mistakes

See Revnue® Contract Management Software in Action

Schedule a Demo