Every organization has business relationships with Vendors, Partners, Customers, and contracts are the most important instruments establishing the business relationship and establishing the performance obligations of the parties involved. Depending on the type of business an organization is into, there can be outbound contracts (to the market) and inbound contracts (from the market). In most circumstances, if any organization is entering into a business relationship with a customer and selling its products or services then standard legally vetted agreement or contract templates are used to forge the relationship. Similarly, when an organization is buying services or products from another vendor then the organization enters into an agreement with the vendor based on vendors’ standard agreement. In some cases, even when you are selling products or services to another customer there are chances that you are accepting the customer’s standard agreement terms in which case you are considered as accepting a third-party paper.
In the majority of the cases, before getting to the final stages of the agreements there is a back and forth between both parties in terms of reviewing the terms of the agreement, going over the clarifications, negotiating agreement terms, and finally signing off on the agreement. Once the agreement is executed it is safely stored in emails or network drives or FTP locations or any cloud repositories (for example, Dropbox, Box, Google Drive, AWS, etc).
According to PC Magazine, it is estimated that across the world around 60% of the companies still use email to manage their contracts while 35% are using digital contract management tools and around 5% of the companies do not follow any contracting process yet.
There are a lot of data visibility issues within the contracts even after organizations adopt digital contract management systems. Most of the tools concentrate on automating the business process like drafting the contract with the appropriate clause language, helping with redlining, enabling workflows to automate the flow of information between different stakeholders, helping with signing the contract digitally using e-signature and finally creating a contract repository. But there is not much focus on how to handle legacy contracts executed away from the contract management system or understand what is inside the third party contracts every organization accepts.
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