How to standardize external contracts with contract management software

How Contract Management Software Can Help Standardize Contracts

Standardizing contracts with contract management software can improve the consistency, efficiency, and risk management of your entire business operation. Keep reading to find out how!

Expanding enterprises require countless contracts every day. And the high demand for business agreements keeps the legal departments busy with low-value tasks. Therefore, businesses must devise a successful plan for drafting contracts that does not strain the legal system or compromise competency. One of the ways to achieve that is by standardizing contracts to remove legal’s involvement from administrative work.  

Standardized contracts enable businesses to accelerate the sales and procurement cycle to get to the finish line faster. There is no need for long-lasting negotiation or review processes. Consequently, the legal counsel can concentrate on high-value tasks and contract strategy. In this blog, we will discuss how enterprises can utilize their contract management software to standardize contract generation across the organization.   

What is a standardized contract? 

A standardized contract is a binding legal arrangement between two or more parties in which one party has established largely non-negotiable terms. Although they leave little room for change, standard contracts are quite common among businesses for low-risk and high-volume agreements. They increase output and efficiency by doing away with the need to draft every legal document from scratch. 

While beneficial, organizations cannot afford to standardize all their business agreements. Determining which contracts to standardize requires the legal team to consider several factors. For instance, high-value and high-risk contracts must be flexible to get past the approval stage and prove profitable for the company. As a result, when standardizing contracts, businesses tend to stay with low-risk, low-value legal agreements that require little negotiation. They are helpful for companies that sell thousands of products every day. For instance, businesses dealing with countless clients can standardize sales agreements. Customers must therefore sign the contract as it is, without any modifications or revisions, when purchasing products or services. Some examples of standardized contracts include NDAs (Non-Disclosure Agreements), employment agreements, MSAs, vendor agreements, and terms of service. 

Automated Contract Management System

How to create standardized contracts using contract management software? 

Standardizing contracts with contract management software can help organizations streamline their contract management process and ensure that their agreements comply with legal and regulatory requirements. They enable businesses to set up automated workflows to bring consistency in legal agreements across the organization. Here are the steps you can follow to standardize contracts with contract management software: 

  1. The first step is to identify the business needs for which a particular organization can use standard contracts. The legal team can filter out minimum risk legal agreements they need in high volume. 

  2. The next stage is to work with the legal experts to develop a master template that contains the essential phrases and conditions. The contract template must be customizable to suit particular circumstances as required. Organizations can store the pre-written templates and clauses to ensure standardized contracts. 

  3. The trick to a competent standard form contract is to keep it straightforward and jargon-free to avoid scaring the other party away. Keep the contract as brief as you can while still covering all the bases and refining it into simple-to-understand words. 

  4. Businesses can then utilize contract management software to automate the workflows to generate contracts using the pre-approved templates. Thus, they can ensure that all agreements contain the standard language and required terms, reducing the risk of errors and inconsistencies. 

  5. Even though companies are mass-producing contracts, they should still maintain their brand voice. Therefore, while standardizing legal agreements, be sure to give the text an element of personality.  

  6. Contract management software has access control to ensure that only authorized parties can fill up the master templates to generate contracts as required.  

  7. Use the software to track and manage contract approvals, signatures, and renewals. It will ensure that all contracts are timely reviewed, approved, and subject to revision as necessary. 

  8. Organizations can store and organize their contracts in a centralized repository. It will make it easier to search for and retrieve contracts when needed. They can also prepare a library for standard templates and clauses. And help ensure that all agreements are consistent and accessible by authorized personnel only.  

By following these steps, organizations can standardize their contracts using contract management software, which can help reduce the risk of errors and inconsistencies and ensure compliance with legal and regulatory requirements. 

Why is it crucial for businesses to standardize contracts? 

Standardizing is crucial for businesses that want to improve their contract performance. A standardized contract is a uniform agreement used consistently across different suppliers, products, and services. Standardizing contracts can increase the certainty surrounding a contract's terms. Businesses and legal teams will be able to understand and apply the terms more effectively the more frequently they are used. Here are some reasons why standardizing contracts is crucial: 

  • Automation 

Standardized contracts can assist automated workflows through its consistent framework that easily integrates with contract management software. Authorized users can effortlessly initiate the contract lifecycle using pre-written and competent templates. It can increase the accuracy and productivity of automated workflows by lowering the need for manual data entry and the likelihood of errors. Thus, there is no need for regular intervention from the legal department for the agreement to progress smoothly to the execution stage.  

  • Consistency 

Standardizing legal agreements ensures consistency across all suppliers, goods, and services. As they specify the terms and conditions enforceable for all parties across various contracts, standard form agreements offer a degree of certainty and predictability. Legal professionals frequently review and update master templates to ensure they are compliant and legally viable. It helps reduce risk and chances of misunderstandings or disputes. Standardized documents make it easier for businesses to manage contract lifecycle, monitor performance, and enforce obligations.  

  • Clarity 

By default design, standardized contracts are consistent across different situations and parties. As a result, the language, terms, and clauses are the same for everyone who uses them. The consistency and predictability of the master templates can reduce confusion and help ensure that all parties are on the same page. Thus, standardized contracts provide a clear understanding of the terms and conditions of the agreement. It aids companies in avoiding misunderstandings and conflicts that may result from vague or ambiguous terms.  

  • Timesaving

Standardized contracts allow businesses to save time by eliminating the need for lengthy contract reviews. The negotiation process frequently proceeds more smoothly and with significantly less friction when the scope for customization and deviation is restricted, which makes it quicker and less taxing on the resources of your legal team. Moreover, the pre-approved master templates and clauses enable companies to produce legal agreements at scale without starting from nothing each time. It can lead to a faster and more efficient contract management lifecycle.  

  • Risk management 

Standardizing contracts can help businesses manage risks associated with the contract management process. Legal teams want to enable other departments to self-serve, but they also want to reduce risk as much as possible. Without a clear framework, sales or procurement teams producing legal agreements run an elevated risk of errors and legal incompetence. Organizations can reduce the dangers of self-served contracts by using pre-approved templates and strictly enforcing specific key terms. With standardized agreements, enterprises can ensure that all the stakeholders adhere to the same standards and legal requirements across the business.  

  • Cost reductions  

Standardizing contracts can reduce costs by lowering the time and resources needed for contract negotiation, review, and enforcement. Since the agreements have already been written and approved by the legal, there is no need for major alterations to get it to the last stage. As a result, the company does not have to spend as much time going over and negotiating the contract's terms. It can save time and resources compared to drafting an agreement from scratch. Standardized contracts also help reduce the risk of disputes and litigation, which can be costly.  

  • Increase productivity  

Consistent content is the best way to generate contracts at scale when speed is of the essence. Businesses can create a huge volume of contracts with minor risks by using pre-approved templates and clauses. They can help improve productivity by providing a consistent framework, saving time and resources, clarifying expectations, and reducing the risk of disputes and litigation. Standardized contracts lower the time spent drafting and negotiating individual agreements, allowing the legal team to focus more of their efforts on higher-value legal work. 

How Adopting a Contract Management System Can Help - Contract Webinar


Standardized contracts can improve the productivity and efficiency of the contract management lifecycle by providing a consistent framework for contract generation. The contract language, terms, and clauses are consistent across the organization. As a result, they eliminate the need for lengthy negotiation and drafting from scratch. It enables the legal team to save time and resources by reducing the risk of disputes and litigation. By doing so, standardized contracts can help parties focus on their core business activities and achieve their objectives more efficiently. 

Standardized contracts often include specific terms and clauses that outline the expectations and obligations of each party. Thus, everyone knows what they need to do and when they need to do it. Standardized contracts are simple and devoid of complicated legalese, making them easier for customers, clients, and employees to understand and sign.  

Book a live demo with our experts to explore the countless features of contract management software.  

Disclaimer: The information provided on this website is not intended to be legal advice; rather, all information, content, and resources accessible through this site are for purely educational purposes. This page's content might not be up to date with legal or other information.
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Written by Deepti Gopimohan

As a creative content writer, Deepti has spent years assisting brands to share their unique voice with audiences, complying with the latest marketing trends and strategies. Her educational background in Literature & Journalism has helped her research and publish content for diverse industries & mediums.
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Reviewed by Naveen K P

Naveen, a seasoned content reviewer with 9+ years in software technical writing, excels in evaluating content for accuracy and clarity. With expertise in SaaS, cybersecurity, AI, and cloud computing, he ensures adherence to brand standards while simplifying complex concepts.

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