What is a digital contract?
A digital or online contract has gained extensive notoriety due to the advancement of the internet and e-commerce. A digital contract can be simply defined as an electronic contract that is modelled, signed, and executed electronically, with both the parties accessing it virtually. A digital contract is quite similar to a traditional paper-based contract, especially in the way it is conceptually drafted.
In the case of a digital contract, a seller who wishes to sell their products usually presents their products, prices and terms to prospective buyers. The buyers, on the other hand, who are interested in buying the products click on the ‘Click to Agree’ button, as it usually indicates the seller’s terms as presented by the seller.
Electronic signatures for digital contracts are usually done in a myriad of different ways such as typing the name of the signer while uploading the scanned version of the signature. Once all of your terms and conditions are accepted, the transaction within the digital contract is assumed to be completed.
With a digital contract, people can formulate and implement policies through commercial contracts within businesses all across the Internet. The digital contract is primarily modelled for sale, purchases, and supplies of products and services for both consumers as well as business associates.
They are categorised into various types of digital contracts, such as:
- Browsing or web wrapping contracts
- Shrink wrapping contracts
- Click wrapping contracts
- Employment contracts
- Contractor agreements
- Consultant agreements
- Sale and Resale agreements
- Distributor agreements
- Non-disclosure agreements
- Software development & licensing agreements
- Source code escrow agreements
What is a contract management system?
A contract management system is commonly known as the control lifecycle management. It primarily manages the production, management of contracts, service level agreements and procurement master agreements. A contract management system is fundamentally used for managing the creation, negotiation, signature, and renewal and data analysis of all legal contracts.
The contract management system can help business teams to self-serve for themselves, agree, and manage routine contracts from one single unified workspace.
What does a contract management system need to have?
A contract is a core necessity for any business’s procurement activities, and it is set for prices, service levels, terms and supplier relationships. The management system can easily facilitate and manage the drawing up and the execution of new contracts. You can easily ensure that your company is supplied with both direct as well as indirect supplies, as the company’s contract management will include:
- The storage of the company’s standardised contracts
- Flexibility for coping with a vendor relationship along with the interactions
- Calendars which include milestones with the vendor that they should meet
- Checking lists for managing information and activities within the contractual life cycle
- Monitoring compliance
- Alerts for indicating movements from expected behaviour
- Agreed delivery schedules, along with the ability to track them
- The prices and budgeting for product lines and vendors
- Document depositories for holding live and standard contracts
- Event management for problems.
- Claiming administration for coping with non-adherence to the contract.
It is imperative to request for proposal management which includes template-based creation. With the help of an interactive and dynamic workflow, there is a structured RFP management through its life cycle.
What are the stages of a contract?
Here are the various stages of a contract, which must be strictly followed through:
Creating: With the help of contract management software, users can also create templates for the most common contracts that the business requires. Whether the contract is meant for employment, an NDA or a sales contract, the template is just a set of rules that needs to be followed when creating a document and it can be customised for each contract.
Collaborating: The contract management software can let you do it in real-time, along with tracking the changes. It is really beneficial in successful collaboration in editing documents, printing, and scanning as well.
Signing: With the help of digital platforms that can help to replicate the binary, permanent character of the physical signature. Thus, signing is one of the best platforms for digital platforms.
Tracking: Monitoring data within the legal line can help with the modernisation of legal documents, mainly in-house for the field of legal operations. With the help of the contract management, you can easily track and monitor the progress within a few contracts.
Renewing: Renewing is one of the final steps in the contract management software lifecycle, which takes a holistic view of contracts. The signature does not represent the end of the contracting process without a multitude of obligations and milestones, which follows the process for all the people involved. Thus, a system which is in place can help you to track the progress through the lifecycle successfully. You can also feed amendments without the contract management software to ensure you get the best results possible.