One of the key activities during the lifecycle of a contract is the process of reviewing contracts. Every business must review its contracts regularly to ensure that the terms and conditions are met and there aren’t any code violations. Since contracts are legally binding and have financial implications, it is advisable to review contracts and subsidiary documents during regular intervals.
Contract management software for sales is comprehensively equipped with features that make contract reviewing simple and efficient. A contract review encompasses verifying the terms mentioned in the contract and checking its legal validity. Further, it also involves staying ahead of crucial contractual events and ensuring that everything goes according to the contract. Here are a few important key elements that you need to check while reviewing contracts.
Terms and Conditions
A contract is basically established to fix the terms and conditions that are to be followed by all the involved parties. The terms and conditions dictate how the involved companies should and must discharge their obligations at the right time. It is essential that while reviewing the contracts, the terms and conditions must be scrutinized closely to avoid issues in the future. To review contracts efficiently, it is advisable to use service contract management software, which enables the whole team to collaborate in real-time, thereby enabling the professionals to verify every line in the contractual document.
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Eliminate the possibility of violations
At certain events, a default term might give the partnering firm to gain more power and exploit the contract. The contractual team must stay ahead of such possibilities by reviewing contracts regularly and ensuring that there’s no room for violations. Although conducting business requires a level of trust among the involved parties, it is prudent to secure any loopholes to avoid friction and legal implications.
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A contract, to be valid and sound, is essential to be constructed with clear language. Avoiding ambiguity and using simple words will ensure that all the parties understand the contract without effort. While reviewing contracts, the team must ensure that the terms and conditions are valid, clear, concise and transparent. Eliminating ambiguity will help in establishing a strong relationship with the contract partners.
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Contracts have an expiry period, after which they will be required to be renewed or terminated for good. It is essential for the company to review the contract performance during the given period and decide whether to renew or terminate the contract. This is an extremely important activity since it would prolong the company’s association with the partnering firm or end the contract. There are several parameters that are usually considered while reviewing the contract, which enables the stakeholders to make informed decisions. Hence contract renewal must be done meticulously while checking whether the contract performed to the parameters.
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Missing a deadline is one of the biggest contract violations that could invite financial and legal repercussions. The contract management team must be ahead of the deadlines and ensure that the obligations are fulfilled within the decided period. While a few companies might discount such violations, a majority portion of the companies will terminate contracts in case of consistent transgressions. To avoid getting the brand reputation tarnished, it is advised to review the contracts using contract management tools to deal with the deadlines effectively.
Often, additional changes will be made to the original contract, which will be added to the contract in the form of addendums. Such contractual additions play a crucial role throughout the lifecycle of a contract and they are required to be monitored and reviewed regularly. The contract management team must review the addendums along with the contract to ensure that no information is skipped or missed during the contract review.
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Reviewing contracts is an important activity that requires time and effort. However with an agile contract management system software, reviewing can be done easily and efficiently.