Time is money! Especially when it comes to negotiating and executing a contract. Across industries, fragmented contracts pose a major challenge for professionals who create, review, and manage contracts reports. However, once you streamline the first step of the contract lifecycle, the following stages can be fast-tracked quickly.
You can significantly realize the actual value of contracts by utilizing standardized contract templates in a contract lifecycle management system. The use of contract templates helps save time in drafting, negotiating, approving, and managing contracts. It improves the performance of both the internal teams and external parties.
Contract templates provide numerous benefits, including removing the need to create a contract from scratch. Rather than authoring a completely new contract, contract templates already have all the pre-requisites like name, start date, end date, cost, specific clauses, etc. Contract templates also ensure that the legal language remains consistent throughout the contract management system.
Standard Contract Templates Vs. Custom-Written Contracts
The alternative to using a standard contract template is asking a legal team or a counsel to draft a custom-written contract which isn't ideal for several reasons. The cost of a custom-written contract is much higher than that of a standard template. It requires you to pay expensive legal fees on an hourly basis. Whereas standard contract templates are readily available on a contract management system and, once drafted, can be used repeatedly without any additional costs.
Standard contract templates also save money by saving time. External parties are more likely to know what they are getting with a standard template because they've encountered it multiple times. On the flip side, a custom-written contract is something new and unfamiliar. So, the parties take extra time to investigate its provisions to make sure it is fair.
Finally, standard contract templates are preferable to custom-written contracts because they are less likely to be biased. Created by neutral third parties, standard contract templates are designed to be fair and agreeable to all parties. Their hallmark is their widespread acceptability. Custom-written contracts are written by either party interested in contract negotiation, putting the other party at a disadvantage. Which then requires a costly contract review to ensure the agreement is fair.
Standard contract templates also have the following key benefits other than saving time and money and being fair.
6 Key Benefits of Contract Templates:
1. Improve Drafting Experience
Drafting contracts from scratch every single time is overwhelming. You can quickly draft the contract with legal-approved standard contract templates by adding crucial values, e.g., the other party's name, start date, end date, payment terms, jurisdiction, etc.
It also takes multiple emails before a contract request is assigned to legal. By centrally storing contract templates in the contract workflow management platform, every employee responsible can quickly draft contracts in standardized language and format. Non-legal teams such as sales Reps, HR, and IT personnel can even self-serve contracts using the templates.
2. Streamline Contract Negotiation
Contract negotiations typically include long hours of talking to lawyers and stakeholders and researching past agreements. Standard contract templates help streamline the contract negotiation process so that parties can focus on deliverables instead of researching various documents.
With a contract workflow management platform, you can easily see the previous golden contracts for similar use cases and use them as a base to renegotiate with vendors and get better deals plus rewards.
3. Fast-track Approval Process
Contract approvals often take the longest time in the contract lifecycle, as the contract approver must read through every line in the contract, which can be a daunting task. However, when a contract is authored using a pre-approved standard template, the approver can focus on reviewing key values. It saves valuable time for organizations to be utilized for other high-value tasks.
4. Increase Compliance
The legal-approved contract template creation process considers all the business risks and includes unique business-specific clauses to mitigate them. The legal teams can keep track of most negotiated clauses and standardized clauses to analyze the effectiveness of their language.
Contract templates improve compliance. With different languages across different contracts, you may have different sets of payment terms, obligations, and clauses for similar vendors, employees, and customers. The standard contract templates enforce you to be compliant with the same legal language across all similar contracts.
5. Update Clauses Faster
A legal team needs to ensure that all the latest updates are continuously incorporated into the contracts. To update one clause to your business contracts, you need to search for every contract containing a similar clause. In addition to being very difficult, it leaves you open to risk.
Instead of chasing down individual contracts, standard contract templates enables you to quickly and efficiently make adjustments centrally. By simply updating the clause in your template, you can ensure that every contract going forward is compliant with new clauses.
6. Duplicate Knowledge
In addition to making the contract drafting process seamless by optimizing your pre-approved templates, a contract workflow platform also allows you to make others' work easy.
Using a contract workflow management platform, you can find a repository of pre-defined clauses, legal-approved unique contracts that you may use only once or twice a year. You can customize it according to your requirement and store it for further use with a few tweaks.
On a contract workflow platform like InkPaper, you can upload and store multiple contract templates centrally; and access them with just a click.
In a complex and fast-paced business environment, as a business, you need to make it easy and quick to create contracts. Standard contract templates assure business stakeholders of the accuracy of the language, enabling them to focus more on strategic business terms than on standard legal clauses.
InkPaper, a contract workflow management system, manage contract templates in a searchable central repository, making it easy to access and standardize legal language across the organization.