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.
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