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framework contract means a payment service contract which

governs the future execution of individual and successive payment transactions and which may
contain the obligation and conditions for setting up a payment account; Sample 1 Sample 2
Sample 3 Based on 101 documents Save Copy framework contract means a contract whereby the
procurement is made for a certain volume or quantity of a particular good, a set of goods,
services or works over a specific period against an agreed sum or rate per item or lump sum.
Sample 1 Sample 2 Sample 3 Based on 71 documents Save Copy framework contract means a
public contract concluded between one or more economic operators and one or more contracting
authorities, the purpose of which is to establish the terms governing specific contracts under it to
be awarded during a given period, in particular with regard to price and, where appropriate, the
quantity envisaged; Sample 1 Sample 2 Sample 3 Based on 36 documents Save Copy Examples
of framework contract in a sentence If the Issuer fails to comply with the Framework Contact,
the Issuer is responsible for any loss or damage You suffer that is a foreseeable result of the
Issuer breaching this contract or failing to use reasonable care and skill when providing its
services under the Framework Contract, but the Issuer is not responsible for any loss or damage
that is not foreseeable or which is not caused by its failures. Only the Framework Contract shall
be valid in case of any dispute between the parties. The User has a period of 14 (fourteen)
calendar days to cancel the Framework Contract, without having to either justify any reason or
sustain any penalty. The Framework Contract is governed by the laws of England and Wales.
Any complaint other than as provided in article 5.2 concerning the conclusion, execution or
termination of the Framework Contract and services for the issue and management of Electronic
Money shall be notified by email (and without any failure or undeliverable messages) to the
following address: xxxxxxx@xxxxxxx-xxxx.xxx. More Definitions of framework contract
framework contract means a pact between a procuring entity and a selected supplier (or
suppliers) or contractor (or contractors) identified for a definite term to supply goods works or
service whose quantities and deliveries are not definable or determinable at the beginning, with a
commitment to order a minimum quantity of the required goods, works, or services Sample 1
Sample 2 Sample 3 Based on 27 documents Save Copy framework contract means a contract
whereby the procurement is made for a certain volume of Works over a specific period against
an agreed sum or rates per item or Percentage above or below the MRS or Lump Sum Sample 1
Sample 2 Sample 3 Based on 12 documents Save Copy framework contract means a contractual
arrangement which allows the procuring and disposing entity to procure works, services or
supplies that are needed continuously or repeatedly at an agreed price over a period of time,
through the placement of a number of orders; Sample 1 Sample 2 Sample 3 Based on 10
documents Save Copy framework contract is this agreement, which includes the Contract Data
and Conditions of Contract appended to this Framework Contract, together with any Package
Orders and \or any Time Charge Orders issued hereunder Sample 1 Sample 2 Sample 3 Based on
8 documents Save Copy framework contract means a contract setting out the performance
framework (general characteristics and price of the services for the purposes of the present call
for tenders). The other basic elements of the contractual relationship shall be defined by means
of specific contracts (‘order forms’). Framework contracts do not therefore give rise to any
obligation for the Translation Centre to outsource a specific volume of work. • Order form shall
mean the document issued by the authorising department of the Translation Centre for each
specific assignment, specifying the nature of the service to be provided, the volume of work to be
carried out, the deadline by which it is to be completed, and the remuneration due. • Standard
page shall mean a page of text comprising 1 500 characters, excluding spaces, in the source
language. • Authorising department shall mean the department within the Translation Centre
responsible for issuing order forms and processing the related invoices. • Contracting authority
shall mean the authority responsible for launching the call for tenders and awarding the
framework contract. • Delivery shall mean the return of the completed assignment to the
Translation Centre in data file form by electronic mail or electronic file transfer. • Quality of
completed assignments shall mean the degree to which the assignment returned by the contractor
conforms to the standards expected, in terms of accuracy, consistency, completeness, style,
register, formatting, respect of the instructions provided and of the deadline, etc. • Staff shall
mean the persons (whether internal or external) responsible for carrying out the work assigned
under the contract. If no specific/particular reference is made to translators/revisers, any
reference to staff shall also include the persons managing work assigned under the contract

Framework Contract means a pact between a procuring entity and a selected supplier (or
suppliers) or contractor (or contractors) identified for a definite term to supply goods works or
service whose quantities and deliveries are not definable or determinable at the beginning, with a
commitment to order a minimum quantity of the required goods, works, or services
A framework contract is a document that outlines the terms and conditions for an ongoing
business relationship between two or more parties. The purpose of a framework agreement is to
establish rules, responsibilities, and expectations when working together.

The best way to think about a framework contract is as the foundation of a business relationship.
It sets guidelines for how businesses worth with each other in the future without having to create
entirely new agreements each time. As a result, a framework contract saves everyone involved
time and money because they know what's expected from them ahead of time instead of going
through negotiations every time something changes.

A SAMPLE

Framework Agreement

This Framework Agreement (this “Agreement”) dated the 12th day of March, 2009
(the “Effective Date”) is entered into by and among Grace THW Holding Limited, a company
incorporated in the Cayman Islands (“Grace Parent”) and its wholly-owned subsidiary Grace
Technology Investment Co., Ltd., a company incorporated in the British Virgin Islands
(“Grace”), AGY Holding Corp., a company incorporated in Delaware, U.S.A. (“AGY U.S.”)
and its wholly-owned subsidiary AGY (Cayman), a company incorporated in the Cayman
Islands (“AGY”), Main Union Industrial Ltd., a company incorporated in Hong Kong, which
promptly after the Completion Date will change its name to AGY Hong Kong Ltd.
(the “Company”) and Shanghai Grace Technology Co., Ltd., a company incorporated in the
PRC, which promptly after the Completion Date will change its name to Shanghi AGY
Technology Co. Ltd. (the “PRC Affiliate”). Grace Parent, Grace, AGY U.S., AGY, the
Company and the PRC Affiliate may each be referred to herein individually as a “Party” and
collectively as the “Parties.”

Background
 
(A) AGY (along with its Affiliates) is a world leader in providing high performance materials in
 the form of glass fiber yarns to a broad range of markets and Grace, among other things,
produces products involved in the vertically integrated supply chain for printed circuit
boards.
 
(B) Grace and AGY desire to enter into a joint venture relationship (the “Joint Venture”) that
has as its principal purpose the development, manufacture, distribution and sale of certain
glass yarn products through the Company and the PRC Affiliate, a wholly-owned subsidiary
of the Company. In connection with the Joint Venture, Grace and AGY will each own equity
in the Company.
 
(C) Simultaneously with the execution of this Agreement, Grace Parent, Grace, and AGY are
entering into that certain Sale and Purchase Agreement (the “Share Sale Agreement”),
pursuant to which AGY has agreed to purchase from Grace 70% of the outstanding equity
interests in the Company, subject to certain closing conditions.
 
(D) On, prior to, or promptly after the Completion Date (defined below), the Parties will execute
and file with the appropriate authorities the corporate documentation set forth in Section 2
below (the “Corporate Documentation”), and on the Completion Date, the applicable
parties will enter into the operative agreements set forth in Section 3.2 below (together with
the Share Sale Agreement, the “Operative Agreements”).

In consideration of the mutual covenants and agreements set forth herein and in each of the
Operative Agreements and for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the Parties hereby agree as follows:
 

Agreement
1. Definitions. In addition to the terms defined elsewhere in this Agreement as used herein, and
unless the context requires a different meaning, the following terms have the meanings set forth
below:
 1.1. “Affiliate” means, with respect to any person or entity, any other person or entity
which controls, is controlled by, or is under common control with such person or entity. A
person or entity shall be regarded as in control of another entity if it owns or controls more
than fifty percent (50%) of the equity securities of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation, for the election of
the corresponding managing authority).

1.2. “Asia” means the commercial and business territory defined by the primary yarn-
consuming countries between the western coast of the Pacific Ocean and 100°E Longitude.
Notwithstanding anything in the foregoing sentence to the contrary, (a) Asia includes,
without limitation, PRC, Hong Kong, Japan, South Korea, Singapore, Malaysia, Indonesia,
Macau, Brunei, Cambodia, Laos, Mongolia, Australia, New Zealand, the Philippines,
Thailand, and Vietnam; and (b) Asia excludes, without limitation, North and South
America, Europe, Africa, India, the Middle East, Russia, North Korea, Burma, and
Taiwan; provided that Taiwan will be included in the definition of Asia at such time that
the Company is permitted to sell to customers in Taiwan under all applicable laws and
regulations.

1.3. “Completion Date” has the meaning given to it in the Share Sale Agreement.

1.4. “Confidential Information” means information or know-how that (a) if

disclosed in writing, is marked with the words “Confidential,” “Proprietary” or words of
similar import, and if disclosed orally or visually, is described in reasonable detail in a
written notice sent by the Disclosing Party (defined below) to the Receiving Party (defined
below) within thirty (30) days of the oral or visual disclosure requesting that such
information be treated as Confidential Information hereunder or (b) is of a nature that
would be reasonably expected to be understood as being confidential, whether or not
marked as such, including all technical know-how and information and financial
information. Notwithstanding the foregoing, “Confidential Information” does not include
information that can be demonstrated by documentary evidence:
 
1.4.1. was known or used by the Receiving Party prior to its date of disclosure to the
Receiving Party, other than by reason of or breach of a confidentiality
 obligation; or
 
1.4.2. either before or after the date of disclosure to the Receiving Party is lawfully
disclosed to the Receiving Party without restriction by sources other than the
Disclosing Party rightfully in possession of such information; or
 
1.4.3. either before or after the date of the disclosure to the Receiving Party becomes
published or generally known to the public through no fault or omission on the
part of the Receiving Party; or
 
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1.4.4. is independently developed by or for the Receiving Party without reference to or

reliance upon such information.

1.5. “Person” means and includes natural persons, corporations, limited partnerships,

general partnerships, limited liability companies, limited liability partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust companies, land
trusts, and business trusts or other organizations, whether or not legal entities.

1.6. “PRC” means the People’s Republic of China, excluding for the purposes of this
Agreement, Taiwan and the Special Administrative Regions of Hong Kong and Macau.

1.7. “Third Party” means any Person other than the Parties and their Affiliates.
2. Documentation. Without limiting any of the closing conditions set forth in the Share Sale
Agreement, among other things, the following documentation is required for the Joint Venture:

2.1. Application documents in a form agreeable to the Parties, to be submitted to the

appropriate authority in the PRC in order to increase the registered share capital and total
investment of the PRC Affiliate. Prior to the Completion Date, Grace will procure that the
Company will prepare and submit such application documents to the relevant PRC
authorities. Such preparation and submission will be carried out in consultation with
 AGY, provided that AGY will have the right to consent to the form of such application
documents prior to the submission thereof.

2.2. Amended and Restated Memorandum and Articles of Association of the Company
in a form agreeable to the Parties. Prior to the Completion Date, Grace will cause the
Company to file such Amended and Restated Memorandum and Articles of Association
with the appropriate Hong Kong authorities.

2.3. Amended and Restated Memorandum and Articles of Association of the PRC
Affiliate in a form agreeable to the Parties. Either before, on, or promptly after the
Completion Date, as the Parties may agree, such Amended and Restated Memorandum and
Articles of Association will be registered with the Shanghai Foreign Investment
Administration Committee and Shanghai Administration for Industry and Commerce.
3. Operative Agreements. In addition to this Agreement, the following agreements must be
entered into as part of the Joint Venture:

3.1. Simultaneously with the execution of this Agreement, Grace Parent, Grace, and
AGY are entering into the Share Sale Agreement in the form attached hereto as Exhibit A.

3.2. On the Completion Date, the applicable Parties and their Affiliates will enter into
the following agreements:
 
-3-

(a) A Shareholders’ Agreement by and among the Grace, AGY, and the Company in the
form attached hereto as Exhibit B setting forth, among other things, rights and
restrictions regarding the Parties’ ownership of their equity interests in the Company and
the governance of the Company, including the composition of the board of directors;
 
(b) An Option Agreement by and among Grace, AGY, and the Company in the form
attached hereto as Exhibit C pursuant to which Grace grants AGY a call option, and
AGY grants Grace a put option, in respect of the interest held by Grace in the Company
as of the date thereof;
 
(c) An Intellectual Property License Agreement by and between AGY U.S. and the
Company in a form agreeable to the Parties pursuant to which AGY U.S. grants a license
to the Company to certain proprietary technology, copyrights, and trademarks;
 
(d) An Intercompany Agreement by and between the Company and the PRC Affiliate in a
form agreeable to the Parties pursuant to which the Company grants a sublicense to the
PRC Affiliate of certain of AGY’s technology and intellectual property rights, agrees to
purchase products from the PRC Affiliate for sale outside of the PRC, and appoints the
PRC Affiliate as a sub-distributor of AGY U.S. products sold in the PRC;
 
(e) A Mutual Distributorship Agreement by and between AGY U.S. and the Company in a
form agreeable to the Parties pursuant to which AGY U.S. grants rights to the Company
to distribute certain of AGY U.S.’s products in Asia and the Company grants rights to
AGY U.S. to distribute the Company’s products in all countries of the world outside of
Asia;
 
(f) A Supply Agreement by and among Grace, Shanghai Grace Fabric Co., Ltd. (“Grace
Fabric”), AGY U.S., and the PRC Affiliate in the form attached hereto as Exhibit
D pursuant to which the PRC Affiliate, AGY U.S., and their Affiliates supply certain
fiberglass yarn products to Grace and Grace Fabric;
 
(g) Employment Agreements by and between the PRC Affiliate and key personnel in a form
agreeable to the Parties;
 
(h) A Local Site Services Agreement in a form agreeable to the Parties by and between
Grace Fabric and the PRC Affiliate pursuant to which the PRC Affiliate and Grace
Fabric provide certain services to each other;
 
(i) A Technical Services Agreement in a form agreeable to the Parties by and between AGY
U.S. and the PRC Affiliate pursuant to which AGY U.S. provides technical and
 manufacturing support to the PRC Affiliate.
4. Mutual Representations and Warranties. Without limiting the representations and warranties
made by the Parties in the Share Sale Agreement or any other Operative Agreement, each Party
represents and warrants to the other Parties as of the Effective Date that:

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WASTE MANAGEMENT

Waste management contracts, contractors and their selection

It is essential that the waste management contract is drawn up jointly by the purchasing officer,
the appropriate waste management officer and the environment officer. These officers should be
able to provide advice about appropriate waste management practices and more able to evaluate
the suitability of the methods proposed by the tenderers.

Competition for waste management services is very intense in some geographical areas, allowing
choice from a wide range of waste management and recycling companies. This may complicate
the selection process, but it increases options for overall management of waste, and may result in
a less expensive service. For those institutions not fortunate enough to have opportunity for
selection, the following principles will still apply.
For contracts (not just the annual charge) valued over £140,000, an EU tendering exercise must
be carried out. Although the EU limit is slightly higher than this, some Universities use this
figure as a threshold – it is advisable that you seek guidance from your procurement professional.

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MMM

Management of the contract / service

Developing a 'partnering approach' between you as client and the contractor can be an effective
way of managing the contract (and might be an integral part of it). But this can take time to
develop, requires trust and a two-way dialogue to ensure that it works. The case studies include
examples of partnering approaches and more guidance is available from the Office of
Government Commerce.

As client your staff involved in the management of the contract, including those involved in the
monitoring, review and audit activities of your service provider, should have sufficient
competence to carry out their role effectively. They should consider the contribution of and,
where necessary, seek and use expert assistance from others either within your LA (such as in-
house safety advisers) or externally (such as consultants, other authorities and LA network
groups/forums).

When the service provider is appointed, the contract arrangements should include a robust
framework for your monitoring and review of their health and safety practice and performance.
Once the contract commences the following should be evident:

 An on-the-ground monitoring regime, run either independently or in conjunction with your

service provider, to ensure that those delivering the service are actually working to the
agreed methods, and to review the continuing suitability of those working methods. The
monitoring practices should always include observation and questioning and have an agreed
compliance/risk scaling consistent with BS 18004:2008 or equivalent. Monitoring should
reflect the key health and safety performance indicators detailed in the contract;
 Periodic review of all relevant accidents and incidents, ensuring that appropriate action has
been taken, and that lessons have been learned/applied more widely;
 Periodic and formal auditing of the health, safety and welfare standards of your service
provider; and
 A suitably authoritative contract safety review committee with representatives from you the
client LA (such as senior managers and elected members), your service provider and ideally
any other parties affected by the contract, which will include the workforce.
To avoid the contract safety review committee becoming a forum for ongoing disputes, the terms
of reference and powers should be clearly defined at the contract documentation stage. The
committee should be expected to receive reports on the items mentioned above, and should also
provide an opportunity for both you the client and your service provider to share matters of
mutual interest, such as evolving best practice.

As the client the detail of your health and safety monitoring regime of your service provider
should be proportionate to the level of risk. It should seek to focus on real safety issues in line
with the principles of sensible risk management. A balance needs to be struck. If the regime
causes your service provider to focus their attention on activities to avoid penalties rather than
concentrating on managing real risk, it will devalue the whole process and may result in poor
health and safety performance overall.

As client you should not be under the illusion that by merely issuing corrective actions you have
discharged your responsibilities. It is important that you engage with your service provider and
actively work with them to investigate and tackle underlying causes.

An outline monitoring checklist can be adapted for use by you as client and your service
providers. The monitoring and review arrangements of your service provider may identify issues
that need to be addressed partly or wholly by you as client. It is important that your arrangements
properly cater for this especially if other departments from your LA are involved.

If as client your monitoring and review arrangements identify issues that require changes in your
service provider's practices or performance, and particularly where there may be an immediate
risk to employees or the public, then it is important that the your client officers have the
competence and necessary authority to intervene and deal with these, or ability to refer matters to
those with such authority promptly. It is important that the role of your client officers is clearly
identified and agreed.

There may be an element of 'historical lag' with existing contracts still having a substantial time
period to run before they become due for renewal. However, this must not prevent you as client
discharging your legal duties during the lifetime of the contract. You should explore ways to
agree variations to existing contracts if their health and safety provisions are found to be
inadequate. As client you should review the performance of the contract and your service
provider to examine how they have met health and safety expectations and other performance
targets throughout the lifetime of the contract, particularly as it draws to an end. There is a real
opportunity to use such reviews to inform and benefit future contracts. Both you and your service
provider should be involved in such reviews and can learn from the process. Steps should also be
taken to involve the workforce in this review process.

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CHALLENGES IN CONTRACT MANAGEMENT

7 Challenges of Contract Management – Contract Management 101

For many businesses, recurring profits are directly linked to the well-oiled machine that we call
effective contract management. But there are many things that can put a stick in the wheel. So,
what are the major challenges of contract management? And how do you tackle or avoid them? 

Welcome to the second part of the Contract Management 101 series. (You can find part one –
“What is Contract Lifecycle Management” here.) In this guide, we cover the 7 biggest
challenges that business encounter in contract management and how to work around them:

1. Do your contracts generate business value?

2. Do you have the right resources?
3. Are your templates and boilerplate clauses up to date?
4. Do you have set processes for review and approval?
 5. How are contracts executed?
6. How do you ensure compliance?
7. Are you tracking contract costs?

The challenges of contract management

There are a few general challenges that, if handled incorrectly, can result in poor contract
management. On the other hand, some are bound to be unique to your business. On your way
towards mastering the ins and outs of contract management, you’ll probably identify these on
your own. With that said, here are seven questions you need to answer in order to handle some of
the most common challenges of contract management. 

1. Do your contracts generate business value?

First of all, a condition for entering any contract should be the creation of business value for your
organization. While this may seem obvious, we’ve all entered one or two agreements that had a
disappointing outcome.

Most often this happens when the other party fails to live up to expectations or deliver on
contractual obligations. The results can range from loss of revenue and missed opportunities to
costly and time-consuming revocation of the contract, or even legal disputes.

Without a strategic approach, identifying which agreements are, or are not, likely to create real
value (and therefore which should or shouldn’t be entered into) can prove challenging.

But, there is a solution! Modern contract management tools make it easier than ever to capture
data around the value generated by certain deals (or types of deals).

The data captured by contract management tools can be analyzed to provide key insights into the
underlying factors driving the success of your business. Using these insights, it’s possible to
shape or tweak business strategies and establish objective, data-driven criteria to decide when
and what agreements should be entered into. For example, 

 Do certain types of agreements often fail to create business value? 

  Is a certain clause often disputed?
 Do agreements with parties of specific sizes or in specific industries prove to be more
valuable than others?

Answering questions such as these by analyzing contract data could help you determine whether
a new agreement should be made, and which ones to prioritize or seek out. 

2. Do you have the right resources?

The next key challenge of contract management is one of the most important requirements for
success — having the right human and technological resources in place.

In terms of people, working with a great Contract Manager, Head of Sales or Legal Counsel can
obviously be incredibly valuable for tackling the challenges of contract management. Having the
right competencies and skills in your team will help you identify and avoid issues unique to your
business and industry.

Furthermore, competent functions and leaders can help the rest of your organization understand
the value of solid contract management processes. As well as facilitate and increase
interdepartmental collaboration and business-wide self-service in contracting matters. 

I have always looked at my competencies before accepting any responsibility.

– N. R. Narayana Murthy, Co-Founder of Infosys

Even when you have the right people on board, it can be difficult to effectively allocate their
time and attention on an individual contract level. In order to avoid inefficient and/or insufficient
contract management, it’s important to have a clear idea of the types of contracts likely to arise
during a particular project or in a particular business setting, and what resources will be required
to manage them. The sooner this in place, the more efficient you and your team can be.

Some basic examples:

  Standard, straightforward sales contracts – a sales representative may be able to create a
new contract from a template set up by your legal counsel (or equivalent function). 
 Larger or more complex deals – a contract might require input from multiple departments
and a high degree of oversight from senior management or legal counsel when involving
important clients or bigger sums.

Having a clear idea of what level of resources to allocate to different types of contracts is a
fundamental aspect of effective contract management. Involving the right people from the
beginning and streamlining procedures wherever possible will also help you build stronger
relationships with your counterparts, making communication and collaboration easier. 

In addition to involving the right people, utilizing modern contract management software is

critical for truly successful contracting. Redlined word processor templates, clunky filing
cabinets and long paper trails are no longer an inevitable part of contract management.

From automated drafting and streamlined approval workflows to a centralized, digital archive
and smart monitoring — the right technology will make your life a lot easier. Modern contract
management tools can be used to support and increase the efficiency of practically every
contract-related action that you and your team undertake.

Indeed, traditional contract management is more than likely negatively affecting your contract
processes and lowering the overall value of your business. 

3. Are your templates and boilerplate clauses up to date?

The third critical question for effective contract management is how to manage and control
updates to templates and standardized language (known as “boilerplate” clauses).  

The actual language of this content will depend on the nature of your business and/or the specific
context of the deal at hand. This is something that should be overseen by the legal team (or
outside counsel). 
More than half of contracts created were based on the wrong template.

— IACCM, 2018 Benchmark Study

Ensuring that your entire organization uses the correct templates and appropriate boilerplate
clauses is a significant challenge on its own. A recent study even showed that more than half of
contracts created were based on the wrong template! A lack of compliance on this seemingly
simple issue can result in major headaches later on — ask any lawyer who’s ever worked on
contract management! 

The challenge becomes even greater when you take the inevitable need for this standardized
language to be continuously updated into account.

For example, as mentioned above, contract data can provide useful insights about which clauses
create the most friction during your business negotiations. This may, in turn, warrant changes to
a template or boilerplate clause. But, without a robust way to ensure this change is reflected
across all new contracts involving similar deals, it’s impossible to reap the true benefits of the
data you’ve collected.

Luckily, digital solutions can help by providing means to control and coordinate updates to
contract templates and standard clauses. This means that everyone in your organization will have
immediate and ongoing access to only the most up-to-date version of any given contract
template. And no one can make unauthorized amendments to approved content. 

4. Do you have set processes for review and approval?

Once a contract is drafted (either manually or using automation tools), having efficient
workflows in place for review and approval is another typical challenge in contract management.

Let’s be real — contracts are rarely the most riveting read. Moreover, responsibility for review
and the routing of contracts in need of approval is often lacking determined standards. So,
perhaps more so than other documents, draft contracts frequently get stuck in inboxes and at the
bottom of to-do lists. The solution to this lies in setting routines and workflows — the more
automated the better! 
If you’re using modern software that allows you to establish automated approval workflows,
you’re off to a good start. This lets you automate the routing of contracts and shorten cycle
times. Such tools can also let you set user-level roles and permissions, and enable automated
notifications for contracts in need of review and approval.

Because the approver can trust that draft contracts are created in complete compliance
with approved and up-to-date templates, the ability to centrally manage and control these, also
allows for shortened cycle times. This means that instead of reviewing the entirety of, for
instance, a vendor agreement, the approver need only review the variable parts — such as the
name, price per unit and volume of a product. 

5. How are contracts executed?

Once a contract is approved internally, we arrive at the next challenge of contract management
— execution.

There are often multiple delays leading up to the actual execution of a contract. Even relatively
straightforward deals can be held up by inefficient back and forth emailing, negotiations focused
on endless redline amendments and unnecessarily drawn-out signing procedures. For deals large
and small, the actual challenge here is finding ways to minimize delays, eliminate downtime and
ultimately shorten these processes for the benefit of all parties.

A large factor in this challenge is the continued reliance on the outmoded practice of sending
contracts for physical signing by traditional courier or postal services. 

Luckily, this inefficiency is probably the easiest to counter — using electronic signatures.

Some of the benefits gained from using e-signing are:

 significant time savings,

  cost reductions,
 more secure signing processes.

Using legally binding digital signatures is a big step towards digitization and lets you eliminate
the need for printing, scanning and copying. So why continue to uphold a paper-and-ink regime? 

6. How do you ensure compliance?

Both parties have reached an agreement, and (e-)signed on the dotted line. So, then comes the
hard part — ensuring that you and your team deliver on your contractual obligations and receive
the expected benefits in return.

It may seem obvious, but a prime example of poor contract management is not delivering on
expectations or failing to monitor the other party for timely compliance with the terms and
conditions of the contract.

Step one: To avoid these issues in contract management, start by bringing all relevant
stakeholders to the table when agreeing upon the contractual terms. The ability to set user-level
roles in the digital contract approval process described above is a great way to streamline this
internally.

Step two: Make sure you have effective monitoring. Just stuffing signed contracts into archives
is an almost guaranteed path to non-compliance. So, what needs to be put in place at your end to
ensure that contractual obligations are met?

 Determine what to monitor, such as different kinds of deliverables and their due dates.
 Decide who’s responsible for monitoring and how the monitoring itself is to be done.

 Think ahead about what actions need to be taken in the event of non-compliance.

 
Non-digital repositories, or even on regular hard drives or cloud storage facilities, aren’t
purpose-built for managing contracts and do not include crucial monitoring and compliance
functionalities. So continuing to keep your contracts spread out in such locations increases the
difficulty of monitoring and ensuring compliance.

Luckily, there are plenty of modern contract management solutions that offer centralized and
fully searchable archives for all of your contracts. Along with monitoring features for all parts of
the contract lifecycle, such as automated reminders.

Tools like these ensure that you’re always up to date on the status of all your contracts —
including deadlines, renewals and other important information. 

7. Are you tracking contract costs?

The final and most important challenge of contract management is managing and keeping track
of costs.

Alarmingly, the IACCM (International Association for Contract & Commercial Management)

has estimated that the average cost of processing a basic, low-risk contract for a large business is
US$6,900! Broken down, this estimate includes the following allocation of time and resources:

 US$500 for 2.5 hours of legal time (assuming the use of in-house resources);
 US$2700 for around 18 hours of contract manager/procurement time;
 US$1800 for around 12 hours of operations, engineering, or project management time;
 US$300 for two hours with finance functions;
 US$1,000 for up to six hours with compliance/risk or regulatory functions; and
 US$600 for ‘other’ types of review or resources. 

These amounts are based on data collected by the IACCM from large companies and enterprises
in North America and Europe with annual revenues of $1 billion or more. Even if your
organization is not this size, it’s highly likely that you are incurring unnecessarily high costs
throughout the contracting process. But you can’t fix what you don’t measure, so keeping track
of the costs incurred at different stages in your contract’s lifecycles can help to reveal and
alleviate inefficiencies. 

Another frequent friction point in many contractual relationships is delayed payments. For small
or newly established businesses, on-time payments can be the difference between the venture’s
success or failure.  

In other words, the real contracting challenge lies in establishing routines and methods for cost
accounting, which can even be the primary task of the accounting department in some industries.
Remember what we mentioned above about having the right resources?

Other challenges of contract management

Many, if not all, of the contract management issues and challenges we’ve highlighted here can be
tackled using digital solutions. Acquiring a modern contract management platform is a good first
step towards increasing overall efficiency since they’re designed to counter the inefficiencies of
traditional procedures.

With that said, it’s important to remember that people, processes and technology make up three
equally important pillars of successful contract management. No contract management platform
can compensate for a lack of good people and processes, and vice versa.

As we flagged at the start, there are a lot of industry and business-specific challenges as well.
You can read more about how our platform, Precisely, can help with a wide range of industry
and role-specific challenges on our website. You might also consider performing an audit of your
own contracting processes to identify friction points unique to you.

We also recommend coming up with routines and procedures for handling challenges as soon as
they emerge. This will make it easier to avoid inefficiencies, and in turn, unnecessary costs and
risks. 
We hope that you gained some valuable insights from this second installment of our Contract
Management 101 series.

If you have any questions or would like to know a bit more about contract management, we’d be
happy to help. We have first-hand experience of handling contracts manually — so we know the
pain involved and how using digital solutions can counter them.

OTHE CHALLENGES

Top 9 Challenges of Contract Management

Best Practice  by admin

Contract management is not a simple or straightforward task – that’s why dedicated

professionals need to take on the role and why there are some excellent contract
management software solutions to help make things move along more smoothly.

Without knowing it, many businesses could be extending their entire contract management
timeline due to the challenges they are facing but not dealing with when it comes to contract
management. Yet this can be easily solved; those problems can be removed when they are
tackled. So just what are these major contract management challenges, and what can be
done about them?

Transparency

Lack of clarity and transparency can be a major issue and present many future difficulties in
contract management. By not being clear – or not realising you haven’t been clear – and
issuing goals and objectives that everyone involved can understand, you run the risk of the
task not being completed to your satisfaction, if at all.

Clear objectives are required for agreements that parties are entering into as well – signing
without being sure of what it is you’re agreeing to can cause a cloud to hover over the
agreement from the very beginning. This can make the ongoing business relationship much
more difficult to handle.
Using a contract management software, you can include all the summaries of each major
element of the contract, spelling out what is required on both sides throughout. This makes
longer contracts, or those that are a little more complex, much easier – and quicker – to
understand. Not only does this help going forward, but it ensures that the contract is signed
in good time as well, since there will be no delays in understand what it all means.

Parties Commitment

Another big pitfall in contract management is the level of involvement each party is
expected (and expecting) to have. Using contract management software means that the
contract can be internally edited and approved before it is sent across to the other party in
the deal. The other party can then do the same, and that way everyone will be completely
sure of what it is they are expected to do within the confines of the agreement before it is
signed and becomes legally binding.

Any changes that need to be made can be done immediately until everyone is happy with the
agreement. Clarification on involvement levels is instant, and there will be far less chance of
any disputes arising.

Party Engagement

Unless everyone involved in agreement is included at each stage, it can be difficult to ensure
that everyone is aware of the ins and outs of each document, and that they even know such a
document exists – a team creating contracts in one part or a business may not be
successfully communicating with teams in other sectors, even if they should in fact be
involved (the legal team is one that springs to mind!).

Using contract management software means that everyone who needs to be involved can be
added to the system. Every individual who is involved in the approvals workflows for your
department or the business as a whole is able to instantly be alerted to anything that needs
doing. Approval happens more quickly, and the right departments are alerted to anything
they need to know about. Overall, the contract will be better managed.
Protracted Negotiations

When negotiations are extended it can make the entire process is at risk of never
completing. Plus, it means that there is a longer lead time between gaining the order and
being able to begin work – the more quickly a contract can be negotiated and agreed upon,
the more quickly work can begin, and the more quickly money can start to flow. And
remember, before a contract is signed any competitive exposure that your client might come
across could help them to change their mind – the sooner the contract is signed the better.

Contract management software means that you can have excellent negotiations in a seamless
way that avoids any frustrations and missed opportunities. Everyone involved can track the
other parties’ changes and ideas within the process, and progress is going to be evident to
all, which will reduce risk for all involved.

Focusing on the wrong things

It is all too easy to look at the terms and risks of a contract and focus in on a narrow set that
is of most concern to you. Easy and, of course, natural. However, by doing this, you might
be missing out on the fact that there are other terms that also need to be negotiated. If you
use an online contract management solution, more than one person is able to review the
contract before signing, which means it is much more likely that everything that needs to be
discussed is noticed.

This not only means that everyone is going to be happier with the content of the contract,
but that the involvement level is kept high which, as mentioned above, can be another issue
in contract negotiation.

Inflexibility

When there is little or no flexibility in contract management, negotiations can stall, and this
can even mean that potential agreements are abandoned altogether. That can be a big blow
for your business. Even if a contract can be created, lack of flexibility means that it is often
not what people really want, and it can take something to go wrong before anyone cares to
change aspects of the contract that they don’t like.
Digital contract management software offers an easy, open, transparent platform that gives
the ultimate flexibility to all involved. You can avoid lack of flexibility and increase
communication since the platform allows you to adjust to any changes that need to be made
quickly and seamlessly.

Move to “business as usual”

If often goes that the handoff from the team that managed the contract to the team that needs
to implement it can be slow and difficult. Often there are gaps in communication that are
only noticed later on, when it is too late to deal with them in a way that won’t disrupt the
contract.

A contract management software platform will plug these gaps by ensuring that everyone is
involved in the entire process and has access to the details of each negotiation. Questions
can be raised ahead of time.

Poor Follow up

Contracts should, ideally, be checked over regularly and followed up to ensure that all
parties are happy with the terms, and that the contract is still something that is working for
all involved.

This rarely happens in practice. There are so many things going on within any business, in
all departments, that once a contract has been created and signed off, it really is a case of
out of sight out of mind.

Not so when a contract management software platform is employed. This platform will
remove these struggles as everything that is required will be in one single, simple place. The
technology will allow for follow ups and governance at all levels.

Technology constraints

Contract management has had problems in the past because the technology surrounding it
was limited. It meant that despite good intentions, contracts couldn’t be managed as
effectively as they can now. It was all rather inefficient and unsatisfactory.
Contract management software is the difference between arduous contract management and
good contract management that everyone – no matter what side of the negotiating table they
might be on – can get behind.

intelligentcontract is a highly customizable solution that provides a hub to store all your
important contract paperwork, plus you get loads of useful tools that make your contract
management process a breeze. We don’t have a limit to either the size of documents of the
total amount of storage, so you don’t have to worry about extra bills if your central store of
documents gets big.

For more information, to get a free trial or to organize a demo

visit www.intelligentcontract.com