The Benefits and Challenges of Using a CLM System in Hybrid Work Environments
Contract drafting can be optimized using automated drafting tools. A contract drafting software ensures efficient drafting. Effective contract drafting enhances staff productivity and fosters viable and productive business partnerships.
What Is Contract Drafting?
Contract Drafting is the process of creating a legally binding agreement between consenting parties. It involves outlining in detail the terms and conditions of such business arrangements. It involves all processes that lead up to the final draft, which is acceptable to both parties. The outcome of this process is a legally binding document that captures the interests of both parties clearly and in simple terms.
The process of contract drafting is intensive. It becomes complex when multiple parties are involved. The first thing to do when drafting contracts is to determine which type of contract best fulfills the intentions of the business arrangement. It is best practice to make each contract unique and best suited for its purpose.
Furthermore, it is necessary to obtain basic but important information about the parties involved; this includes the company’s name and address. If certain private details should be included in a contract, then standard law provisions that guarantee privacy, such as Nondisclosure Agreements (NDA), should be added as a clause in the contract. Most importantly, a well-drafted contract should state how disputes between parties should be handled.
It is recommended that a lawyer is involved in the process of drafting contracts. This ensures that the contract is properly done—legally binding and valid. Other relevant stakeholders involved in contract drafting include contract managers, vendor managers, finance departments, promisor, and promisee. The promisor is the party that commits to providing a product or service. The promisee is the party that accepts the offer.
What Is Contract Drafting Software?
Contract drafting software is a tool that automates the drafting process. Basically, it allows for the automated drafting of contracts. In addition, it brings about much-improved collaboration between the parties involved in the contract. Drafting effective contracts hinge on a combination of effective communication and collaboration between both parties. Collaboration can prove to be cumbersome and ineffective, however, contract drafting software eliminates this drawback and makes the process more effective. Furthermore, using an automated tool reduces the possibility of errors.
How to Draft a Contract Manually
Manual contract drafting means beginning the process from the very scratch. In drafting contracts manually, the following steps are required:
Step 1: Manual contract drafting begins by obtaining all necessary information and combining them into a single document. Details such as names, names of companies, addresses of companies, contract’s start date, as well as terms and conditions to be contained in the contract are gathered and included in a document.
Step 2: Next phase entails ascertaining if the business agreement is industry-compliant. This step is very important. If the agreement doesn’t meet industry standards, it is rendered invalid. Research and inputs from relevant stakeholders are key to the success of this step.
Step 3: once the agreement has been ascertained to be industry-compliant. A copy will be sent via email to the other party for acceptance. Proper follow-up is required for a quick response.
Step 4: If the other party expresses disagreements over certain aspects of the contract, an in-person meeting will be scheduled to address these objections. The negotiation process can be time-consuming; hence, a schedule that works for both parties is ideal.
Step 5: This is the final step of manual contract drafting. Once both parties are okay with the contract’s terms and conditions and have had sufficient time to review and understand the contract, it is then signed at an in-person meeting set up for this purpose. In this step, both parties are to input their signatures and date on the last page of the contract document. This action enforces the contract.
How to Draft Contract with the Help of a Contract Drafting Software
Contract drafting software allows you to draft a contract without starting the process from scratch. The steps include:
Step 1: Begin the automated drafting process by utilizing standardized contract templates provided by the software to create a business agreement. These pre-existing templates are legal documents and are designed to satisfy your unique business intentions.
Step 2: The next step after you select a suitable template is to fill in the required fields using the auto-fill feature. Double-check to ensure all fields are correctly filled, then send out to the other party for acceptance.
Step 3: Drafting tools provide the option of sending the draft contract to the other party within the application. The other party, in turn, receives an email notification requesting them to collaborate. You also get notified when the contract has been viewed.
Step 4: Here, no need for in-person negotiation meetings if the other party has certain objections. Negotiations can be done directly on the software, and the necessary adjustments made.
Step 5: In this step, the final draft is signed virtually. Both parties affix their e-signatures, and the contract becomes legally binding.
How Can Smart Contract Drafting Software Increase Your Staff’s Productivity?
Creation of specific contract drafting templates
Contract drafting software provides templates that are designed to help you achieve your specific contract objectives. This boosts productivity. Hours lost to rethinking, rephrasing, or restarting the drafting process are now channeled to other productive tasks. These templates just require simple editing. They also reduce operational costs. Everything is done virtually, so no need for paper works.
Increased clarity and protection from disputes
Contract Drafting Software makes collaboration seamless and effective. There is real-time contract drafting & negotiation. Both parties work on a single document. Every complaint is noted on the same document and the corresponding adjustments are made. This leaves no room for ambiguity and future disputes. The final contract produced fully satisfies the interests of both parties.
Handling Large Volumes of Tedious Contract at a Lightning Fast Pace
A smart contract drafting software is a tool dedicated to drafting contracts. It is equipped with inbuilt templates and a flexible repository which makes it easy to pull up data at any time during the drafting process, effectively eliminating information heaps across all teams. A repository serves as a single store of all relevant documents; hence less time is wasted looking up files. This way, large volumes of contracts can be handled at a much faster pace.
Providing In-depth Insight to Assist During Negotiation
Contract drafting software allows you to track and monitor contract compliance. Since the contract is automated, you can track key milestones, and be notified when they are achieved. It equips you with enhanced analytics and data for accurate forecasts. These insights make you better positioned during negotiations and ensure you get a business arrangement that is satisfactory.
Screening Contracts and pulling valuable data with remarkable accuracy
The elaborate collaboration made possible by contract drafting software helps to reduce the likelihood of errors in the contract. All relevant stakeholders are involved in the process in real time. This ensures that adequate guidance is provided in the drafting process. In summary, the accuracy of terms, clauses, and languages used in the contract is assured.
Why Is a Productive Contract Drafting the Foundation of Healthy and Functional Business Relationships?
Contracts are the basis of business relationships. Productive contract drafting is crucial for fostering and nurturing long-standing business relationships. It maximizes the operational and financial costs of both parties involved. More time and energy are channeled to fine-tune crucial terms and conditions of the contract. This ensures contract compliance and prevents the occurrence of disputes. Since the outcome of the drafting process is an arrangement that works for both parties, each party will be committed to fulfilling their respective contractual obligations in order to obtain their contractual benefits.