Stages of Contract Lifecycle Management Series #2 - Contract Authoring

Stages of Contract Lifecycle Management Series: #2 - Contract Authoring

Understanding the contract authoring process is crucial to ensuring smooth and successful business transactions. In this comprehensive guide, we will explore the contract authoring process, its importance, and the best practices to follow.


Contracts set the foundation for business relationships. From procurement contracts to non-disclosure agreements to sales agreements, all require well-defined terms and conditions to yield positive outcomes. Additionally, unfavorable content can cause delays in approval and obstacles in the onboarding procedure. 

That is why authoring is such a significant aspect of contract lifecycle management. It enables businesses to draft legal agreements that align with their goals, protect their interests, and are on the right side of the law. We have already discussed the ins and outs of contract requests in our previous blog. Here we will explore how organizations can standardize the authoring process across the board for speedy approvals and execution. 

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What is contract authoring?

Contract authoring is creating, drafting, and finalizing legal agreements between two or more parties. These agreements outline the terms, conditions, rights, and obligations of each party involved in a business transaction. They must also comply with the laws and rules relevant to their sector or jurisdiction. 

The main objective of the process is to ensure all parties are on the same page moving forward. There is no chance of misinterpretations regarding rights and responsibilities when the language is clear and concise. Parties must maintain a thorough record of all early drafts, discussions, and iterations throughout the authoring process. That is why it can be time-consuming and challenging for organizations with high-volume requirements. 

What are the essential components of contract authoring?

The contract authoring process involves putting the terms and conditions into a formal written document that clearly outlines the rights and obligations of each party. It must address the vital aspects of the business relationship, including objectives, deliverables, and responsibilities. 

1. Initial drafting

The initial drafting stage is where parties lay out the foundation of the contract. The parties involved outline the terms and conditions of the agreement, including the scope of work, payment terms, timelines, and any other relevant details. All parties involved should understand the plain language used in contract writing. It helps to avoid any confusion or misinterpretation of the terms. They must provide precise dates, amounts, and responsibilities to prevent confusion. Contracts must also adhere to legal standards and regulations to ensure enforceability in court. All parties should agree on the terms before going to the negotiation phase.

2. Negotiation and collaboration

Once the initial draft of the contract is done, the negotiation phase begins. It is where both parties come together to discuss and refine the terms of the agreement to reach a mutual understanding. Effective communication is essential during negotiations to ensure that both parties are on the same page.

Both parties should be willing to compromise and alter the contract terms to reach a mutually beneficial agreement. All the clauses must be fair and legally binding. All changes made during the negotiation process should be documented and incorporated into the final version of the contract.

3. Contract review

The review stage of contract authoring involves a thorough examination of the contract to identify any errors, inconsistencies, or ambiguities that could lead to disputes in the future. During the review process, all parties involved in the contract should carefully read and analyze the terms and conditions. It ensures that they accurately reflect the intended agreement.

They must ensure the contract complies with relevant laws and regulations to avoid potential legal challenges in the future. Contracts must use clear and precise language to avoid misinterpretation and ambiguity. All terms and conditions must be consistent and cohesive to avoid confusion or contradictions. Identifying and addressing potential risks and liabilities is crucial to protecting the interests of all parties involved.

4. Contract approval

After review and revision, the next step is obtaining approval from all parties. It indicates that all parties have agreed to the contract's terms and conditions and are willing to abide by them. The formalization of contract approval usually occurs when all parties sign the document. Both parties agree to be bound by its terms by signing the contract.

What are the benefits of effective contract authoring?

Contract authoring is crucial in any business as it lays the groundwork for a successful and legally binding relationship. Organizations can clarify the expectations and responsibilities of each party. They can protect rights and interests during a breach or disagreement. Thus, efficiently drafted agreements reduce the risk of misunderstandings or disputes. 

1.  Clarity and precision

Contract authoring can ensure clarity and precision in the terms of the agreement. A well-drafted contract leaves no room for ambiguity or misunderstanding, reducing the risk of disputes or legal challenges down the line.

2.  Legal protection

Contracts are legally binding documents that can be used as evidence in court if a dispute arises. By engaging in thorough contract authoring, you can protect your rights and interests by clearly outlining the terms of the agreement and ensuring that all parties are aware of their responsibilities.

3. Risk mitigation

Effective contract authoring helps identify and address potential risks and liabilities that may arise during the agreement. By including relevant clauses and provisions in the contract, businesses can minimize the likelihood of unexpected issues and protect their businesses from costly legal battles.

What are the challenges of contract authoring?

Contract authoring involves ensuring legally sound and enforceable language. Using legal jargon, clauses, and terms can be complex and confusing for businesses without legal expertise. Contracts are not just about outlining the rights and obligations of the parties involved but also about managing risks and ensuring compliance with relevant laws and regulations. 

They must navigate legal requirements and potential liabilities to draft a contract that protects all parties involved. Contract ambiguities can lead to misunderstandings, disputes, and costly legal battles. Therefore, they must strive for clarity and precision in their writing, avoiding vague language and ambiguous terms. 

Moreover, authoring involves multiple stakeholders, including legal teams, business representatives, and external parties. Effective collaboration and communication are essential to ensure that all parties agree on contract terms. They must record any revisions or updates.

What are the best practices for contract authoring?

A clear understanding of needs, expectations, and goals is essential for the contract authoring process. That is why parties must openly communicate to ensure that everyone is on the same page. It will enable parties to tailor the contract to meet the specific requirements of each party and build trust.

Using clear and concise language

One of the most common pitfalls in contract authoring is using overly complex or ambiguous language. Remember, a contract is a legally binding document, and clarity is key to avoiding misunderstandings or disputes. That is why they must use simple language to outline rights, responsibilities, and obligations. Avoid legalese and jargon whenever possible, and consider using bullet points or subheadings to break down complex terms.

Incorporating appropriate clauses

Legal language is essential to ensure that the terms and conditions of the contract are clearly defined and understood by all parties involved. Here are some best practices for incorporating legal language into your contracts: Utilize standard legal terminology and clauses to ensure the contract is legally sound and enforceable. They must make sure to include essential clauses such as termination clauses, confidentiality clauses, indemnification clauses, and dispute resolution clauses. These clauses are crucial for protecting your interests and mitigating potential risks. It is always advisable to have your contracts reviewed by a legal professional to ensure compliance with relevant laws and regulations.

Communication & collaboration

When creating a contract, you’ll most likely have to receive inputs from internal and external parties to ensure all of the important details are properly relayed within the document. With streamlined communication pathways, you can improve response times between contract requestors and those authoring the contracts. Tracking versions of contract drafts is with communication and collaboration. At any point, if a contract is edited, businesses must monitor the changes, so everyone can work on the same iteration of the document.

Dock 365 contract management software for contract authoring

The contract authoring stage is one of the most critical stages of contract lifecycle management. At Dock, we provide a way to create contracts in the most efficient and compliant way possible. By centralizing all of your important contract information and requests for contracts, you can build accurate contracts within moments on any device. Built within your existing Microsoft 365 environment, our software can improve all communication during the contract authoring process. They can utilize Teams & Outlook to communicate in real-time during drafting, negotiation, and reviews. Dock 365 seamlessly integrates with CRM and ERP systems enabling users to import customer and vendor data for contract generation.

Contract Templates & Clause Library

An extensive contract template library enables companies to reduce turnaround times. They don't have to create competent agreements from scratch each time. They can standardize documents across the organization and automatically safeguard against contractual risks. It improves the overall efficiency and compliance.  When using a contract template, a user can insert various metadata and preapproved clauses into the document seamlessly. A clause library is also a major key to efficient contract generation. With access to numerous clauses, parties can rapidly build compliant contracts.

Manual contract creation takes a very long time, so with automated processes and the features of an electronic solution, you can develop an organized, rapid, and accurate approach to contract authoring. Furthermore, you can add an extra layer of security by enabling permissions-based access tools so only authorized users can review and retrieve contract templates.

Automated workflows

Reviews and approvals from internal and external stakeholders are an integral part of the authoring process. Businesses mostly depend on email chains or messaging to carry out these tasks. It can lead to unnecessary delays and misunderstandings. Dock 365 enables businesses to overcome these challenges by automating the review and approval workflows. These automated workflows route the essential documents to appropriate reviewers or approvers for instant results. The automated alerts and deadlines ensure that everything gets done on time.

Version Control

They can utilize audit trails to track all the changes throughout the contract lifecycle. Due to an electronic approach to contract management, businesses can easily import third-party contracts and build on them. In addition, automated alerts and email notifications provide updates on the status of contract drafts which proactively keeps everyone in the loop. Authoring and retrieving contracts is effortless and accessible for contributors, as they can use any device and find documents within a centralized contract repository at their convenience.

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Managing your organization’s contracts is easy with an all-in-one contract management platform, where you can store all of your contract templates, preapproved clauses, and versions. Share and collaborate on documents within your Outlook or Teams framework with ease. in various file formats so that relevant stakeholders can receive documents as needed. Once a document is drafted, you can use automated workflows for reviews and approval.

Our contract management system is built onto your existing SharePoint and Office 365 so you can use automated workflows to auto-populate data fields on contract templates. This helps to increase the speed and efficiency of contract creation. Avoid the pitfalls of a poor contract authoring stage by centralizing your organization’s clauses, using version tracking tools, and systematizing your contracts.  

Continue your exploration of Stages of Contract Lifecycle Management with Dock 365 - Contract Review & Approval

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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