Contract review is a crucial contract management stage for legal teams to oversee. Unfortunately, far too many organizations overlook this process or leverage out-of-date methods. Tragically, contract evaluation process oversight can result in:
- missed key dates and obligations.
- overlooked opportunities.
- contract language and clause mistakes.
- and other painful consequences.
Thankfully, we can establish a contract review checklist and manage the life of a contract with leading contract management software. Let’s get started.
Contract Review
Contract review is the process of authoring, negotiating, and signing a contract. The process involves stakeholders collaborating to establish a complete understanding of the terms and conditions of a contract. The contractual review helps all parties understand what is expected from a contract.
What Else Gets Reviewed?
Fundamental facets of a contract document that parties involved might review include:
- the contract parties, legal team, contract review lawyer, or law firms involved.
- changes made during contract negotiation (a party cannot reference an aspect of a contract removed during contract drafting!)
- subject matter of a contract (which parties need to fully understand, line by line).
- legally binding obligations which – if unfulfilled in the specified amount of time – can lead to a breach of contract.
- making sure a contract has no blank spaces before signing (as per contract law best practices).
- contract clauses (e.g. renewal, force majeure, dispute resolution)
How Can Legal Technology Simplify Contract Review?
Whether an organization is a small business, big business, private business, or public business – AI-based legal technology, such as contract lifecycle management (CLM) software, can help review contract documents. Helpful CLM tools can assist organizations in understanding every part of the contract.
Contract Counterparty Management
As hinted at above, contract counterparty and stakeholder information are important for contract review. Contract software can make it easy to oversee important counterparty information.
Leading CLM software offers user-created fields to easily capture key counterparty information such as:
- Company Name.
- Company Address.
- Company Email Address & Phone Number.
- Company ID number (Automatically Assigned by CLM Software).
- Point of Contact.
- COI Details.
- COI Expirations.
- COI Documents.
- COI Requests.
Like virtually all fields, these fields can be merged into placeholders within a contract document for even easier contract review.
Robust Contract Negotiation
For better contract review, tools within CLM software can make it easy to confirm changes agreed upon during contract negotiation.
Contract Authoring
Dynamic contract authoring within CLM software can allow teams to merge field data with clauses from their approved library. Timely, compliant, and accurate documents can be prepared for collaboration with counterparties in contract negotiation and review.
CLM users can also use templates for FAR, DFAR, and GSA contracts if needed. CLIN (contract line item number) management and line items can also be included in contract templates. Contracts can be easily exported as standard file formats such as MS Word and PDFs.
Bonus Tip: Organizations should seek in-demand contract authoring features that set the stage for contract review. Such features include:
Document Collaboration & Version Control
Document collaboration and version control can make contract review significantly easier.
Say, for instance, Bob downloads the document “ABC Consulting Agreement” from CLM software. Then, Bob makes changes to the document. Bob then reattaches that document with the changes he’s made and tracked. In this case, user-friendly contract software creates an audit trail complete with version numbers.
This feature helps counterparties and stakeholders stay on the same page regarding the most up-to-date version of a contract.
Contract Clause Ownership
A leading contract management system can offer contract clause ownership. This helps eliminate contract review confusion as well.
CLM software allows you to assign a “clause owner.” If anybody changes a contract clause or section, the assigned “clause owner” is notified. The clause owner can also be added to the approval process so that no changes get by clause owners.
Contract eApprovals & Contract eSignatures
Contract signatures can include internal stakeholders and contract counterparties. Automated signatures can make the contract review process much simpler in the age of legal ops digital transformation.
Electronic signature software can integrate with contract management software. Now, organizations no longer need a physical copy of a contract to sign.
Contract signature delays can put obligations, compliance, and contract execution in jeopardy. As such, a faster way is needed for streamlined contract review and execution. Luckily, electronic signatures can cut send-to-sign time up to twenty percent!
- Save Time: Way less time on administration regarding sending, tracking, storing, and following up on contracts out for signing.
- Save Money: Way less money spent on ink, printer, paper, travel, mailing, and other administrative costs to get a contract signed.
- Increase Security: Reduce processing errors and confidentiality breaches with audit trails and legally binding signatures.
- Improve Visibility: Meet crucial deadlines and streamline signing in the office or on the go.
Bonus Tip: Leverage digital signature software to help ensure a signature’s date of signing and that it was untampered with.
Contract Review & More With Leading CLM Software
Don’t waste any more time with manual contract review processes. Rather, streamline your contract review processes with leading-edge CLM software. To explore legal technology options, download this complimentary CLM software report.
To see future-minded contract lifecycle management software in action, click here.
To stay up to date on legal tech innovations, contract lifecycle management best practices, and industry news, subscribe here.
