Glossary of Contract Management Terms
In Contract Management, there will be plenty of terms that are not familiar to regular users. It is essential to understand those terms to get used to the CLM processes and activities. Here you will find descriptions of some of the common contract terms, phrases, and jargons.
Arbitration
An alternate dispute resolution method that avoids any judicial court procedures. Disputes are resolved outside of a court of law by a third party. The third party could be an individual or a group of people. Arbitration is non-binding, meaning that the decision is advisory and can be final only if accepted by all parties.
Agreement
An agreement is the gathering of mutual acceptance between two or more parties. In contract management, agreements are drafted into contracts after careful negotiations, and consist of an offer and acceptance. The legality of an agreement might vary upon the state and federal laws.
Affidavit
A voluntary sworn declaration of written facts. These statements are written and signed under oath. Affidavits are commonly used to present evidence in court.
Active
An action that demands action.
Audit Trail
Records the flow of a transaction from initiation to finalization.
Bid
An offer price given from the buyer to the seller in a transaction.
Bona fide
A Latin term meaning "good faith". Absent of fraud. Authentic.
Breach of Contract
A broken promise. At least one party in a binding agreement fails to deliver according to the terms of the agreement.
Bankruptcy
A legal proceeding involving a person or business that is unable to repay their outstanding debts.
Business Contract Agreement
A legally binding agreement involving an offer, acceptance, consideration, and mutual voluntary consent.
Bankable
A form of payment that is accepted at a bank.
Contract Administration
Manages risk in the contract life cycle. Risks can include contractual obligations, payment terms, budgets, timeliness, etc.
Collaboration Contract
It is an agreement between two parties, individuals/businesses, who would like to undertake small projects like advertising or promotion.
Confidentiality
Confidentiality is a set of rules or clauses in the agreement that ensures the privacy of a party's information.
Contract Management Software
Contract management software is a program or software that is used to digitalize contract management processes like creation, negotiation amendment signature, and data analysis.
Contract Lifecycle Management
Contract lifecycle management is the process of managing each and every stage in a contract lifecycle in a methodical and professional manner.
Compliance
Compliance means conforming or complying with a set of rules or regulations that have been agreed on in the contract.
Contract
A legally binding document between two or more parties that governs the rights and duties of a party to an agreement.
Contract Amendment
Contract amendment is an altercation to the original signed document, it could be addition of a new clause or the removal of one or some other changes.
Contract Automation
Contract automation is the practice of using digital software to manage contract documents and other contract management activities.
Corporate Contract
A corporate contract is an agreement between two or more corporate business entities that govern the scope and terms for the exchange of services, works, goods, etc.
Default
A failure to do something required by law.
Definitive Agreement
A legally binding agreement setting forth all material terms, conditions, and other provisions relating to a transaction. It is signed by each party.
Deed
A signed legal document that grants its holder specific rights (ownership) to an asset.
Deliverables
Items that a service provider is obligated to provide to a client.
Digital Contract
A digital contract is one that is entirely based on the computer, with no paper involved. The contract originates on a computer, is signed with a digital signature (e-signature), and is stored on a computer (or in cloud storage).
Effective Date
The agreed date on which the obligations in the contract go into effect. Contract obligations begin on this date.
Expiration
The date a contract ends. Contract is no longer active after expiration.
Entire Agreement Clause
Defines the scope of the contract. Any other verbal or written agreements are invalid.
Financial close
A stage when all the conditions of a financing agreement made in a PPP (Public-private partnership) contract are fulfilled prior to any conditions precedent for financing are met and financing is in place so that the Project Company can commence construction.
Financing
Financing is the process of providing funds or the source of money required upfront to meet the business activities, making purchases, or investing.
Force Majeure
It simply refers to the unforeseeable circumstances or events that are outside the control of either of the parties that prevent them from fulfilling a contract.
Funding Contract
It is an agreement made between two parties where there is an investment by the investor or source of money required to meet the payment obligations. The issuer in return guarantees a fixed rate of return over a time period to the investor.
Finance Contract Software
It is a cloud/SaaS, deployed, or mobile-ready financial contract management solution that lets the finance team quickly find the exact files and data so that they can make the precise financial decisions like optimizing operations, reducing inefficiencies, improving compliance, quick reporting, and auditing of complex financial data.
Facilities Management Contract
Facilities management is the service to be executed by the service provider to retain the value of a project or any other asset thereby ensuring functionality, comfort, safety, and efficiency of the built environment to its users and function as envisioned. The contract made upon this is called facilities management contract.
Governing Law
Governing law is a provision in legal or contract agreements made between companies and their users which will be governed, construed, and enforced in accordance with the rules and laws of a state to conclusively interpret the agreement.
Guarantee
A guarantee is a promise or assurance, especially a written promise by that something is of definite quality and that it will perform reasonably for a particular period of time.
Government Software Contracts
Governments purchase software and services from other parties through acquisition contracts, these contracts can be defined as government software contracts.
Goodwill
It is an intangible and quantifiable asset that can be attributed to the reputation of an established business.
Healthcare Contract Management
Healthcare contract management is the process of managing the contracts at a healthcare institution in such a way that ensures that it stays compliant and enables them to provide better service.
International Contracts
When two parties based in two different countries enter a legally binding contract, those kinds of contracts are called international contracts.
Indemnity
Indemnity is a legal obligation that requires one party to compensate any loss incurred to the other party due to the actions of indemnitor or any other party.
Intellectual Property Rights
Intellectual property rights are legal rights of a party on their original works, inventions, artistic works, scientific inventions, products, etc.
Incorporated Contract
If one contract document is referred to in another contract document, it is called incorporated contracts.
Jurisdiction
It is an authority granted to a legal body to administer justice.
Joint Venture
A business entity created by two or more parties is called joint ventures.
Key Performance Indicators(KPI)
It is a type of performance measurement for contracts. KPI's evaluate the success of contract management processes.
Legal Agreement Contract
An agreement between two or more parties creating mutual obligations enforceable by law.
License
It is a permit from an authority that allows the user to own, use, perform or practice something.
Liability
Being legally responsible for something.
Liquidation
It is a process by which a company is brought to an end. Its assets and properties get redistributed.
Management Contract
A management contract is an agreement or contract made between project investors with a management company where the operational control of the project is vested in the management company. Management contracts involve performing the necessary managerial functions by a management company in return for a fee.
MultiParty Contract
Multi-party contracts are agreements made by numerous stakeholders like owner, primary designer, primary builder and other key parties without loss of information in a business deal.
Maintenance Contract
Maintenance contract is a contract or agreement made between two parties regarding preserving an asset, equipment, machinery or building infrastructure possessed by one party by another party.
Merger
Merger is an agreement that combines two or more independent business corporations into a single enterprise which is mainly done to enlarge a company's reach, develop into new segments, or increase market share.
Non Disclosure Agreement
It is a legal agreement by two or more parties which requires them to not disclose confidential information that is shared between them as part of doing business.
Notice
It is basically a legal concept describing a requirement that a party is aware of the legal process affecting their rights obligations or duties.
Negotiations
It is a formal dialogue between two parties before reaching an agreement.
Online Contract Agreement
An agreement that is drafted using onlice contract management software tools can be defined as online contract agreement.
Offer and Accepatance
Offer and acceptance is a general requirement for the generation of a contract.
Obligation
It is a course of action to which a person or party is legally bound.
Procurement Contract
A written agreement between a buyer and seller in which the buyer agrees to purchase goods and or services from the seller in exchange for payments.
Party
A person or group of persons that can be identified as one that enters a contract agreement.
Payment
A transfer of money to another party in exchange for goods or services.
Power of Attorney
It is legally written authorization that represents or acts on behalf of another in private affairs, business, or other legal matters.
Prime Contract
A legal agreement between a construction project owner and contractor.
Privacy Policy
A statement or legal document that states how a company or business handles and processes the customer data that they collect.
Quote
To provide an estimate of the price for a job or a service.
Quality Assurance
It is a method of preventing defects or mistakes in a product and maintaining a desired level of quality.
Quid Pro Quo
A Latin phrase that means an exchange of goods or service.
Remote Contract Legal Work
A legal contract management process that is processed remotely.
Right
A legal principle of entitlement.
Software Contract
It is a contract made between an organization and a software developer where the organization mentions its notions and conditions.
Supplier
A supplier is a person, entity, or organization that is the source or that which provides something such as goods or services.
Types of Business Contracts Agreements
These are contract agreements that cover all business-related contracts.
Term
It is a provision in a contract.
Termination
A contract termination means the end of a contract, all the agreements in that contract become void after termination.
Underwriter
Underwriters are found in stock markets, insurance, and banking and an underwriting contract is an agreement made between an underwriter and an issuer of securities.
Vendor Contract
Business contract between two parties covering exchanges of goods or services in return for compensation.
Variance
A difference between two parts of the same legal proceeding.
Warranty
According to contract law, a warranty is a written guarantee or a term of the contract. Warranty may cover the product, promising to repair or replace it free of charge or according to conditions specified in the warranty.
Works Contract
It is a contract of service or agreement of building construction, any movable or immovable property which may also involve the supply of goods in the execution of the contract.
Waiver
It is a formal statement of voluntary relinquishment or intentional surrendering of some known privilege or legal right by a party to a contract. By signing a legally binding provision like waiver, either party in a contract agrees to forfeit a claim without the other party being liable.
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