Managing your contracts
A lot of time and energy is spent creating and negotiating contracts but often, the question of what happens to a contract once it has been signed is overlooked.
There are a number of risks which can arise from failing to properly manage contracts once they have been signed, including missing key deadlines or renewal dates, losing important contractual documents or executed copies of an agreement, being unable to track changes to a contract, regulatory and compliance issues and breaches of contract terms.
Thankfully, there are several simple strategies for improving your contract management process and mitigating these risks. These are set out below.
Store contracts in a centralised location
One of the most simple but effective ways to improve your contract management is to store your contracts in a single, centralised location – ideally online. This not only makes contracts easily accessible across your business but also reduces the risk that important documents will be lost.
Digitalise paper contracts
Storing contracts in a digitalised form will significantly improve your ability to track and manage your documents. Particularly in today’s era of remote working, having your contracts in digital form and storing them in a digital location will allow individuals across your business to access them from anywhere. While scanning and storing old or hard copy contracts online may seem like an administrative burden, it will create much greater efficiency in the long term.
Set key date reminders
Setting reminders for key contractual dates – such as termination, break dates and renewals – will ensure that never find business in a situation where a contract has ended without your knowledge, or you miss the opportunity to exit, renew or renegotiate a contract.
Creating a register of key contract dates and terms is an efficient way to keep track of your key contractual obligations and any key risks in a contract, such as:
• Contract start and end dates
• Renewal provisions
• Payment terms
• Liability (including any liability caps, indemnities or uncapped liability)
• Termination rights
• Other key obligations or risks
Having this information set out in a contract register removes the need to read through each individual contract to find the information you require.
Use contract templates
Standardised contract templates can speed up the contract process and limit the risk of entering into unfavourable contract terms.
Keeping up-to-date templates of frequently used contract (such as non-disclosure agreements) in a centralised location means individuals across the business and create routine contracts, leaving your legal resources free to focus on more complex matters. This process can be assisted by having a guide stating which key terms your business cannot accept and which terms must be included as a general rule.
The above is a non-exhaustive list of the measures you could take to manage your contracts effectively and there may be other factors you should take in to consideration, depending on the contract you have entered into. If you require any support with implementing contract management processes, please contract our Commercial Team who would be happy to assist.