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Today, many companies still rely on the manual preparation of contracts, which is problematic for the following reasons:
- Outdated contract management is based on the fact that you have to call or email several people in different departments to get the latest version of a contract.
- Some employees don't understand the legal jargon that appears in every contract, which can lead to additional complications, misunderstandings, and potential errors.
- If you set up a contract manually, you are almost likely to increase the risk of using incorrect and inefficient clauses, which can prove disadvantageous once the contract is signed.
In addition, the entire process becomes significantly more difficult when you have to insert all contract components at the exact positions required to create an enforceable contract. To make this tedious process more enjoyable, switching to automated contract templates is the smartest decision for you and your company.
What is a contract template?
A Contract template is a set of standard provisions that are adapted to a specific use case or type of contract. Ready-made contract templates enable both legal and business users to...
- a simple way to fill out important information
- adapt certain clauses to the respective counterparty or order
- to roll out the contract for rapid execution
Most people think of contract templates as simple, pre-made Word documents, which companies can change and adapt to their personal circumstances. However, this is not the only way contract templates can be used. With the help of special CLM software predefined contract clauses can be seamlessly retrieved from a contract clause library and used when drafting contracts.
Benefits of using contract templates
Consider this another reason to make the contract creation process shorter and more efficient. According to information from World Commerce and Contracting A simple contract costs 6,900$ when you include all salaries. More complicated contracts, on the other hand, can cost up to 49,000 dollars!
Tip: Calculate your ROI, to determine how beneficial it would be to introduce a contract template.
Contract templates help improve the process and take agreements to the next level. So let's see how optimized templates can help you:
1. Save time and resources (> 55,000€ savings per year)
When you centralize your contracts using templates, you don't have to create them from scratch every time. Instead, you can make business arrangements with numerous parties using a standard contract form. Using contract templates shortens the contract process and allows you to create contracts within hours instead of days or weeks.
2. Ensuring the consistency of all contracts
A contract writer is not a novelist. Instead, this must be consistent with the Constitution.
Contract templates provide consistency by providing a consistent form and structure and making it easy for your team to quickly find important parts within a template. Standard contract terms can be easily updated to adapt to changing business or customer requirements.
Coordination plays a crucial role throughout the contract life cycle. Without standardized clauses, there is a risk that contract authors will create contracts based on their individual ideas about the company's regulations and legal requirements. This leads to various legal discrepancies in business relationships, which can ultimately damage the company's reputation.
3. Streamlining the contract negotiation process
Even though the specific contract terms vary depending on your needs and those of your customers, you can reduce the time spent on discussions by creating contract templates. By creating company-specific terminology, promoting common clauses, and standardizing legal jargon, you can focus on the specifics of each transaction while maintaining the consistency of your agreements.
4. Enable easy collaboration
Contract templates allow teams to work on a contract from anywhere. With traditional methods, the team member who created the document would have to send the finished draft via email to the colleague, who in turn is responsible for the review. However, with the help of a contract template, authorized persons can quickly contribute to the document via a central system.
5. Minimize errors
Contract templates put an end to duplicates in your system, especially when multiple people are involved. This is done by the word processing algorithm capturing the respective text passage. In addition, it points to grammatical problems that even the most experienced eyes would escape.
Examples of commonly used contract templates
There are many different types of contracts, just a few examples of which will be mentioned here.
