Tips for effective contract review
Importance of review and approval
The third step of Contract Lifecycle Management (CLM) is contract review and approval. Contracts are critical to any business because they set the terms of agreements between parties and define the duties obligations and responsibilities of each party. Therefore, it's important that contracts are properly reviewed and approved to ensure that they accurately reflect the terms that were agreed upon and comply with other legal requirements.
By ensuring all parties agree to the terms of the contract and it meets their expectations, the review and approval phase reduces the risk of disputes and litigation. It also helps avoid contract violations, missed deadlines, and other problems that can arise from poorly written or unclear contracts.
Tips for effective review and approval process
Here are some tips for ensuring that contracts are effectively reviewed and approved during the contract lifecycle management process and places where Agrello can lend you a hand.
📌 Define roles and responsibilities
It's important to define the roles and responsibilities for reviewing and approving contracts. This includes identifying who will be responsible for reviewing and approving the contract and who needs to provide advice and guidance as a legal or compliance expert. If the contracts are standard contracts, the contract template review can be completed at an earlier stage when the contract text is prepared and agreed upon and the assistance of lawyers or paralegals is required. Subsequently, the agreed template can be uploaded to Agrello and used over and over again without further help from lawyers.
📝 Establish standard procedures
Establish standard procedures for reviewing and approving contracts. This includes defining the steps involved in the review process and setting a timeline for completing each step. It's also important to establish a clear process for documenting and tracking contract changes.
👮 Ensure compliance with regulations and policies
Make sure contracts comply with all relevant regulations, policies, and legal requirements. This includes ensuring that the contract meets all applicable industry standards and adheres to any specific regulatory requirements.
📢 Communicate effectively
Effective communication is essential throughout the contract lifecycle, including the review and approval phase. Keeping all parties involved in the contract informed of the review process and the expected timeline for completion is essential. It's also important to establish clear communication channels to address questions or concerns that may arise during the review. To avoid emailing the document back and forth via email, Agrello allows you to assign fields for your counterparty to fill in. This way, all relevant information and details can be entered directly into the contract text, and no one can sign until all fields are filled in. Before signing, all parties can review the data entered.
💻 Use technology to streamline the process
Use technology to streamline the review and approval process. Contract management softwares can automate the review and approval process, providing an efficient and streamlined approach to managing the contract lifecycle. This includes automated workflows, digital signatures and other tools that help eliminate errors and increase efficiency. With Agrello, the process takes place in a single environment, which helps you continuously track the document's progress and avoid it getting stuck in someone's mailbox.
Conclusion
The review and approval phase of contract lifecycle management is an important part of the CLM process that ensures contracts are accurate, complete, and legally binding. By establishing roles and responsibilities, implementing standard procedures, ensuring compliance, communicating effectively, and using technology to streamline the process, organisations can ensure that contracts are effectively reviewed and approved. Effective contract management can help organisations reduce the risk of disputes, improve compliance, and ensure that contracts meet the needs and expectations of all parties involved.
