General Counsels spend significant time and effort in drafting, and negotiating a complete, error-free, protective, and safest legal contract to protect the interests of the organization. In the process, all contracts have various obligations, which are to be adhered to by all the parties to the contract. While the agreement is drafted, negotiated, and signed most efficiently, however, once it is signed and stored in physical storage times Obligation Management is missed by all the parties.
Every legal contract, whether it is signed, with customers, vendors, or service providers always contains various obligations. These obligations are well documented in the executed agreement and have defined roles and responsibilities.
These obligations are related to various security standards, certifications, changes in management, profitability, senior management, etc. Any possible deviation from obligation can result in :
- Cancellation of the contract OR
- Can impact deliverables.
Every obligation is a legal commitment by the respective party and any deviation from the obligation may result in the cancellation of the contract, penalties, fines, or legal suits.
Every contract be it for supplies, services, software purchase, software support, raw material purchase, or having consultants on board, obligations are integral parts of all agreements. While day-to-day purchase contracts may not have too many obligations, however, large customer contracts, strategic alliance contracts, and M&A contracts always consist of many obligations and constant compliance is a must to ensure the smooth running of the business.
When we have physically signed contracts it is not usual that all obligations of executed contracts are listed and tracked regularly. With smart Contract Lifecycle Management software having a specific module for obligation management module, it has become so easy to manage all the obligations regularly and ensure that all obligations whether concerning the own organization or concerning counter-party organization, are complied with and documented.
Volody`s Contract Lifecycle Management has excellent features and it automatically captures obligations at the time of drafting the contract hence you do not need to read contracts again, build a list of obligations, and make an obligation management report for each contract. All these activities are done during the drafting of the contract and immediately upon execution of the contract, an Obligation Management module is updated and respective people within or outside the organization get alerts and notifications well before the deadline to ensure all obligations are reviewed and addressed. A smart dashboard gives you a perspective of all obligations information (contract-wise, counter-party-wise, or period-wise) to allow you to focus on Obligation Management and ensure complete compliance with Obligations Management of all the executed contracts.
