Contract Execution

Definition of Contract Execution / Signature

Contract execution (or contract signature) is the stage of the contract lifecycle where all parties formally agree to and sign the finalized contract, making it legally binding. Execution may occur through physical signatures or—more commonly today—via electronic signature platforms integrated into CLM software.

This step finalizes the negotiation phase and transitions the contract into active status, where obligations and performance tracking begin.

Why Contract Execution / Signature Matters

Proper contract execution ensures enforceability and establishes a definitive record of mutual consent. Delayed or disorganized signing processes can stall projects, delay revenue recognition, or even invalidate an agreement.

When integrated with digital signature tools, CLM systems:

• Accelerate execution timelines.
• Eliminate manual tracking.
• Maintain a secure, time-stamped record of signatures.
• Automatically store executed versions in a central repository.

Best Practices for Contract Execution / Signature

1. Use secure, compliant e-signature solutions (e.g., DocuSign or Adobe Sign).
2. Define signature order and roles before sending documents.
3. Store executed versions in the contract repository immediately after completion.
4. Set automated notifications for completion or pending signatures.
5. Validate identity and ensure correct signatory authorization.

Example of Contract Execution / Signature in Practice

A vendor MSA is routed through the CLM platform for electronic signature. Each authorized party signs digitally, and the system automatically files the executed document in the contract repository with an audit trail.