Contract Management is the Foundation of Your Business

What is a Contract?

Contracts are legally binding agreements and they will tell almost every detail of a business. If you own or manage a business, you maintain with the contract all the time in your dealings with contractors, vendors, commercial landlords, banks, employees, customers, and client.

Why contract is important?

A written contract plays an important role in any business transaction. Apart from making the agreement between concerned parties legally binding, contracts can also serve as future references, part of the business’ policies, as well serve as proof in the event of misunderstandings, complaints or disputes needing litigation proceedings.

Purposes of a contract?

  • Contracts give a portrayal of duties.

Instead of suffering through the confusion of wondering what each party’s obligations, you’re better to have everything in writing. This will help maintain a strategic distance from confusion or disagreement.

  • Contracts bind parties to their obligations

It is incredibly troublesome if one party attempts to back out of an agreement. A contract will bind the parties to the previously defined description of duties eliminating this problem.

  • Contracts can establish a time frame for obligations.

If you need work performed and performed within a certain time frame a binds the party to that time frame. As a consultant, you might want to require the other party to provide adequate and timely access to key personnel.

For example:

  • Contracts can secure payment.

Nobody likes to be stiffed for work performed and a binding contract provides a written legal document establishing an agreement to be paid for services rendered.

  • Contracts provide options when the relationship falters.

If the relationship between the contracted parties fails, a contract outlines the previously agreed upon steps required for dissolving the relationship without punitive measures.

A benefit of a contract to your business?

Well-drafted contracts provide you and your business many benefits such as:

  • Provide lucidity in business connections, agreements, and rights of parties.
  • Avoid potential disagreement and suit.
  • Prevent misinterpretation of communications and agreements.
  • Protect intellectual property, real property, and asset values.
  • Better management of business relationships.

Contract Management Software

Docucollab

  • Can help you access, manage your contracts and store it in one place.
  • Automates your contracts, increases deal velocity, accelerates revenue and saves 40% labor.
  • Help your sales teams automate the end-to-end contracts management, review, approval negotiation, redlining, and e-Signature.

Reference:

Wikipedia

Law.com