What is a Clause Library

What is a Clause Library?

Contract management software is typically equipped with a contract template library and a clause library. In this blog, we discuss the many purposes of a clause library and how this incredible tool can boost efficiency and productivity in contract management.

A clause library is simply the collection of preapproved clauses used by your organization in the building of contracts. By having a comprehensive and well-designed library of clauses, you can greatly reduce the time it takes to send a contract through its lifecycle. Oftentimes, businesses with implement contract lifecycle management software to improve the speed and efficiency of their contract management systems.


A contract clause library will improve the accuracy, consistency, and compliance of your business. By having well-organized preapproved clauses, you can easily search, find, and insert select clauses into contracts and associated documents.

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How does a contract management clause library work?

In a contract management software system, a contract clause library serves as a storage place of preapproved clauses that are used to be built into contracts. In this way, having the library creates a faster process in finding appropriate clauses and then assembling the contracts that they belong in. A clause library can also increase visibility for all parties, which can create clearer expectations and communication to follow.

Because your contract clause library will be saturated with preapproved and prebuilt clauses, your contract management team and legal department will have an easier time finding clauses that fit various criteria while being legally compliant. A contract clause library is an easy way to improve speed, efficiency, and accuracy within your contract management system.

There are different functions that a clause library offers, such as version control, automated workflows, and metadata features. Due to the tagging feature of the clause library, your legal team is offered a significantly streamlined auditing process. As a result, your legal department can easily identify risks and then manage them effectively.

How do preapproved clauses work when building contracts?

A clause functions as a critical building block to a contract. Clauses contain essential legal terms and information. Various “tags” in a contract clause library may differentiate between various terms, services, and information. Clauses can be used in many ways in the construction of different types of contracts.

What’s great about a clause library is once you set preapproved clauses and associate them with specific contract types that your company regularly builds, is that your contract management team will decrease time spent building contracts dramatically. For example, if your team narrows-in on a key contract type and sets standardized preapproved clauses based on building that type of contract, they can increase the value and return on investment of their contract management system by generating more contracts in less time.

Components of a Clause Library

A contract management clause library includes the following:

  • Clause types with definitions and an association to types of contracts that each type belongs to
  • Preapproved clauses to help build and customize contracts while reducing negotiation times
  • Tags that differentiate clause types and purposes
  • Clause groups for clauses that are consistently used together
  • Modified clauses with the contracts they are inserted in (helps ensure fulfillment aligns with contractual commitments and terms)
  • Alternative clauses paired with clause substitution options
  • Sub-clauses (related to master clauses)

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Create More Contracts in Less Time

By having readily available, preapproved clauses, you can quickly add commonly used clauses to regularly built contract types and speed up the entire process. A clause library is a time-saver. Your team will free-up a significant amount of time due to the simplification of finding clauses that a contract clause library provides.

Gone are the days of copying and pasting clauses into a contract after spending forever searching for the clause manually. Preapproved clauses will also increase accuracy and consistency of contracts created.

A contract clause library creates cohesiveness and uniformity in the contracts you build, delivering a sophisticated, professional, and well-designed picture to your business partners of how your contract management system operates. All these items will greatly increase the optimization of your contract management system.

Risk Mitigation

Due to the legal nature of contracts, it’s important that risk mitigation is considered. A clause library does just that. With preapproved clauses, you don’t have to worry about vague or poor word choice in contracts that could lead to potential damage of your company or of a working relationship with a client or vendor. Leveraging the capabilities of a contract clause library will help decrease risk by creating a standardized contract drafting system that indirectly mitigates the potential for drafting discrepancies.

Contracts can greatly impact your business’s revenue both positively and negatively. By adopting a clause library, you can improve the contract building process while increasing efficiency, accuracy, and compliance. A subpar contract management process will only lead to subpar growth and subpar returns on your investment. However, an optimized contract management system will only maximize results and keep clients returning to your business.

Reduce Human Error

Human error is inevitable in any business – however, being prepared of for human error and taking preventative steps to mitigate it can set you apart from your competitors. A contract clause library allows your contract management team to stay compliant and follow specific contract terms while using an efficient and accurate tool.

If you consistently build and modify a high-volume of complex contracts, it can be difficult to save time spent searching for specific clauses that belong to particular contract types. With high contract loads, it’s hard to avoid the minor (or major) mistakes. Despite your best efforts, having a strong contract management team, and strong legal team, mistakes will likely be made. Use a contract clause library to reduce the potential for human error and to increase accuracy.

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Optimize the performance and productivity of your contract management system by implementing a contract clause library. Maximize results and streamline contract building for your management and legal teams with the help of a well-organized the Dock 365 Contract Management System – complete with a contract clause library. Contract clauses are crucial building blocks for creating contracts, so having a clause library can help offer protection and risk mitigation while increasing productivity, accuracy, and compliance.

Today’s industry and business leaders are implementing contract management software, complete with automated workflows, as well as contract template and clause libraries to boost their productivity and reach objectives. Have all of your preapproved clauses at your fingertips and streamline contract lifecycle management for your entire team simply by using a clause library. Maximize your contract lifecycle management strategy today with our Dock 365 Contract Management System

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.

Written by Lindsey Paulk

Lindsey Paulk is a Content Writer in Jacksonville, Florida that specializes in digitally communicating all-things contract management.
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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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