There’s no way around it – hard working, conscientious professionals despise mistakes. But there’s also no way around the fact that mistakes are a part of the human experience, both personal and professional. In fact, quotation dictionaries are full of great sayings from famous scientists, coaches, philosophers, and regular Joes, explaining that failure is a great teacher and that success often includes a series of failings. But while it may be true that mistakes cannot be totally avoided, it’s just as important to learn from them, and hopefully not to repeat our mistakes.
This is certainly true in the world of contract management, where simple errors can create lasting consequences. And we would further argue that it’s even more efficient when we can learn from someone else’s mistakes. With that in mind, this article will share some common contracting mistakes and how to avoid them.
Relying on Paper Contracts
If you reminisce about the good old days when you held a book in your hand instead of an electronic device, we completely understand. After all, we still enjoy the touch and smell of a fresh newspaper. But continuing to rely on paper contracts in a business setting is another story, and incredibly inefficient when dealing with large numbers of contracts.
For example, to best plan for a sales call, a salesperson may need to review both the current contract and a prior contract with a customer. Having to contact the home office, where someone digs around for the paper copy, creates delay and wasted time. Or maybe someone in a production department wants to double check some manufacturing specifications, but the relevant contract is stored in a filing cabinet in the legal department. Again, inefficient. We could cite hundreds of examples, but you get the point.
With ContractSafe's contract management software, all of the company’s contracts are digitally uploaded and safely stored electronically in a single repository. Management can grant access to any contract to as many or as few people as considered appropriate. OCR technology allows the user to speed search the document for relevant terms or information using Google-type searches. That way, your salesman or production guru in the examples above can simply review the contracts at any time, from any computer with an internet connection, as long as they have permissions. They don’t even have to bother the people in legal (or any other traditional keepers of the documents). And where security concerns exist, permissions can be limited to “no-delete,” or “read only,” which prevents printing or downloading.
Maintaining Documents on Too Many Drives
While keeping things on paper creates its own problems, storing things electronically can open its own can of worms. In an era where every employee has a computer and multiple shared drives exist, documents get saved multiple times on multiple devices and drives. Normally, those involved know who is responsible for the final document. But after time passes, people may forget or use an old draft (which did not contain important changes) as a template, or the contract renews but old versions are still available
At ContractSafe, this problem is resolved through centralized storage in the cloud. The document is housed in one location but can be worked on collaboratively by everyone that the company gives permission.
Spending Money for Unneeded Bells and Whistles
While it is tremendously important to implement technologically-sound contract management solutions, it is a fact that some contract management software is designed for the entire contract life cycle with huge corporations in mind. Thus, it includes functionality that is not needed for most businesses. The problem is that you pay for it whether you use it or not. It’s like paying extra for an SUV with four-wheel-drive but never taking it off the road. All it really does is add cost, reduce gas mileage, and cost more for maintenance!
But at ContractSafe, we offer easy-to-use solutions for businesses of any size. By offering multiple levels of service, you purchase only what you need. This makes it easy for everyone to use, easy for you to manage the account, and it’s super affordable. Now, that’s watching out for the bottom line!
Failure to Properly Manage Renewal Contracts
One of the most common, and vexing, contracting mistakes stems from an understandable need for convenience: the automatic renewal clause. Automatic renewal clauses, such as employment agreements and commercial leases, are especially popular with parties who expect to have a long-term relationship. At the end of a specified term, if everyone is happy with the relationship, they simply do nothing and the contract renews for another term. If either party wants out of the agreement, or believes that changes are appropriate, there is a window of time before the contract term expires during which the party must give notice.
There’s nothing wrong with such clauses. In fact, they can save time and money when used properly. The problem is that on many occasions one or both of the parties have forgotten about the clause and the contract. This can lead to totally unintended consequences, such as a long extension of a relationship with a party to whom you really no longer want to be associated! This happens a lot with service or IT contracts--if you work in these industries you probably already know it can cost tens of thousands of dollars (or more!)
Luckily, ContractSafe has your back. Our contract management software keeps up with every single renewal clause in every single contract you have uploaded. We’ll even scan through your contracts when you upload them, and alert you if there’s auto-renew language! The system automatically sends email notices to anyone you choose (and as many people as you like) long before the automatic renewal occurs. This gives management time to refresh themselves as to the terms of the contract and to make an informed decision on whether to opt out, renegotiate, or let it renew.
Now that you've informed yourself, get a leg up on these pesky contracting mistakes by starting your free ContractSafe trial today!