Contract Management Foundation

  Contract management refers to the process in which a contract is created, executed, and analyzed to maximize the operational and financial performance of a company. As business grow and develop, contract management can become increasingly complex, highlighting the need for effective strategies and solutions. An appropriate contract life cycle management is perhaps one of the most common challenges when running a company, as organizations of all sizes face the need to juggle multiple contract at the same time. One of the areas we need to observe carefully in contract management is negotiations, once the contract has being drafted, the parties involved negotiate the parameters established until the conditions are agreed upon by all stake holders involved, thus setting the expectations for the agreement. Contract negotiations may entail a back- and-forth collaboration, version control and redlining, to meet the expectations of all involved parties.

  Do not agree to anything or sign anything without first checking out the other party and its legal background. Everybody deserves the benefit of the doubt, but it is important to establish that the party is indeed legally able to enter a contractual relationship. If there are existing commitments, take the time to review those relationships and obligations and determine the impact that a new agreement would have on them. Time is money. If a contract falls apart or suffers delays, your company may have to incur additional cost or use additional man-hours. This jeopardizes your projections and budgets, not to mention other business opportunities. Make sure that the other  party is aware of the consequences that delays have on your company. Particularly, your scope statement should include specific clauses that provide details about change requests.