Contract generation: what is it, and how on earth does it work?
At Contractbook, we are passionate about contract generation and how our contract generation tool can support businesses establish legally binding agreements with other parties. We have created an outstanding piece of contract generation and management software to ensure that our clients can make the most of the contracts they create.
Contracts should not be seen, and do not have to be, a laborious, administrative exercise that takes months and months. Instead, creating a contract where both sides have legal protection, given their obligations and duties are clearly outlined, means that that contract is an asset instead of a liability. It is effective and efficient contract generation which achieves that.
What is contract generation?
Before we delve into why we think contract generation is so key for so many businesses, it is good to know what exactly it really is in the first place. Otherwise, it can sound a bit like tech spiel.
Contract generation is creating a legally binding agreement to be signed by the relevant parties. That generation will require the writing of the contract as well as contract negotiations and contract approvals. Manual contract generation will involve legal teams and IT teams working together to generate and format the contract. That contract also needs to be distributed to all relevant parties and stored safely.
However, contract generation can be so much more than that if the proper contract generation software is used. Effective contract generation software should take out much of what holds up the entire contract generation process. For example, sending contracts between parties each time a new version is created is time-consuming. Or starting a contract from scratch which simply regurgitates all the same information as a previous agreement for a different party.
What are the stages of a contract?
At Contractbook, we believe there are six stages in the lifecycle of a contract. They are all vital to remember when generating a contract. Without putting equal emphasis on all parts of the contract management lifecycle, there is a danger that a contract will not be as strong as it could be. Hitting all the following stages are the real success factors for contract generation.
Bearing that in mind, the fundamental six stages in a contract’s lifecyle are:
1. Contract Creation
Creating a contract is the first step in contract generation. Start with a draft, or better yet, one of our templates from our extensive library, that will then be edited to include or delete clauses as required from the negotiations with the other party. Our technology helps from the first step in the process, therefore. Our templates are fantastic starting points for so many commonly used contract types. Plus, our flexible editor or automated contract drafter makes creating a first draft contract straightforward. And now, our software can even autogenerate contracts with external data input.
2. Contract Review
Negotiating and collaborating on a contract is at the heart of creating a robust contract and protects both parties. Yet, it can be challenging to do quickly when there are many individuals involved across many different teams. Productive collaboration and negotiation are considerably improved through our contract generation software. Our contract management software allows you to review your contracts in seamless collaboration as draft contracts can be easily shared with all parties. So you can invite both your team and external guests to negotiate contracts directly on the platform. Comments and amendments are recorded. Follow the contract progress and track changes to maintain a transparent process. Work is reviewed more quickly so that the final product can be agreed upon in substantially less time than without a contract generation tool.
Signing contracts, historically, was another time-consuming element to the entire contract generation process. Needing to send hard copies of the documents to all parties meant that this stage could materially extend how long getting a final document signed - and therefore then in use - was. Contract generation software can use technology to send documents electronically - safely and securely. Plus, what is more, the digital signatures used are just as legally binding as a signature made in ink. Date and time stamps with digital signatures are yet just one more benefit to contract generation software. And, without all that printing, a lot of trees are saved too, sparing our ever battered environment.
Contracts are so often forgotten about or at least hard to find due to inefficient storage processes. Yet, organizing contracts and storing them effectively is such a critical way that that contract’s power can really be harnessed. If a company can find an agreement quickly, it can use the data within it far more readily. No time is lost, and instead, real value can be added from what is included within a contract. Contract generation software will consist of storing the agreement so that it is easy to find within online files. Plus, with our software, you can import legacy contracts, control the access and gain a complete overview of your legal situation.
The best contract generation software will now make use of the latest developments at hand (like ours does!) to trigger events automatically. The result? You can make sure that you never miss an obligation. In fact, our trigger functionality means that you can make use of automated tasks and reminders as well as build self-executing contracts. You and your business stay well ahead of the curve, helping you be a dynamic company that does not put a legal foot wrong.
Contracts do not stop their lives after being stored - or they should not anyway, especially if you use good contract generation software like Contractbook. The analyze stage can help ensure that any work needed after a contract is signed is completed so your company’s performance is improved. We store contracts in a dynamic format that enables you to unlock all the business intelligence in your contracts.
Contractbook’s software ensures that each step of the lifecycle of a contract is optimized. But there is more, along the way, Contractbook can automate every single step in your contract's lifecycle and integrate with more than 3000 other apps.
Why automating a contract is effective - overall takeaways
Automating contracts, to us, is the future. Contract generation software can create contracts faster. It simplifies the creation of high-frequency, low complexity contracts. Plus, importantly, it reduces legal errors that may arise from human mistakes. And contract automation enables people to work smarter. Documents can be generated with dynamic data-rich formats so that AI can help create contracts. That leaves personnel with the time to direct their efforts into tasks that add real value to a firm.