Contracts are an essential part of the day-to-day operations of any business. Contracts in the modern/digital business environment are created using legal technology. Legal technology uses various technical terms to describe different processes and functions in the world of contracts and legal documentation.
Contract management and contract automation are two phrases that are used interchangeably in the legal world as a lot of people still think that these two mean one and the same thing. While the basic function and purpose of these two processes might be similar, these terms are distinguishably different and used in different contexts in the legal business world.
Creating a legal contract involves several steps. To create a contract, a user has to follow each of these steps without any failure so that the contract is legal and valid. This process is called the contract lifecycle and it involves several steps in the following order:
Create: This is the initial stage of contract creation where a business team or a legal team will develop the draft of a contract. A lot of businesses still create contracts manually using tools like Word. The manual process can lead to errors and faults in the contract reaction stage.
Review: Business contracts affect different areas of business operations like sales, finance, human resource and others. Hence, t is essential to review these contracts using suitable integration and collaborative software. After reviewing, the required changes are made to the contract and the final draft is completed.
Sign: After the final draft is completed, it is signed by the authorities which makes the contract valid and legal.
Storage: The legal documentation like legal contracts are important and thus needs to be stored in a safe and secure place that is also confidential.
Renew: Certain contracts need to be renewed now and then and thus this is the last stage of the process of the contract lifecycle.
Contract management involves a contract lifecycle that starts with the stage when the contract is created and then goes through various stages until reaching the final stage of the contract renewal. Contract management is carried out using contract software that helps in all the stages from creating a contract to renewing the contract. There are many added benefits of contract management software like scalability, collaboration, compatibility and accessibility.
Contract automation is a process that allows businesses and corporations to enhance the experience of creating a contract until the stage of its execution. This means that contract automation is limited to the stage of signing the contract. It involves every automation tool, software and hardware that helps in improving the way we create contracts, review them, correct them and then finally execute the contracts.
Contract management and contract automation make the process of developing legal contracts easier. These processes are useful for a smooth workflow.
At Doqfy, we have built our platform to support contract lifecycle management at enterprises through contract automation. Our platform is agile & customisable as per the requirements of individual businesses.