What is a Contract Clause Library?
A contract clause library is a centralized repository or collection of predefined contract clauses that can be easily accessed and utilized in contract management processes. It provides a comprehensive set of standardized clauses that can be incorporated into contracts, saving time and ensuring consistency in contractual agreements.
Utilizing standard legal and compliance-approved template language allows organizations to reduce the time legal and compliance departments spend reviewing contracts.
Having a contract clause library in your CLM solution offers multiple benefits, such as:
- Enables accurate and legal compliant contract creation in a correct sequence with a properly formatted layout
- Reduces over-dependency on the legal team for contract creation
- Populates each contract with the metadata that is already available in the system
- Controls the creation of clauses, templates, rules, and logic from a single location
Understanding Contract Clause Library
Clause libraries are repositories filled with standardized template clauses that have been pre-constructed and pre-approved. Clause libraries also boast a wide range of additional features that can be built on top of this repository functionality, like version control, metadata, access rights, workflow approval, etc.
Contract clause libraries have several benefits, including increased department efficiency. If your organization has several contracts that are in frequent use, it helps manage the application of business rules to various clauses and timing. Many CLM systems also allow variations to the specific language used throughout negotiations and other contract creation processes.
Read More: How to make the most use of clause library?
The benefits of clause libraries are numerous:
Save time
Reduce time spent manually searching for a clause and then copying and pasting that clause into a contract. Intelligent clauses (included) can limit or outright eliminate time spent “cleaning up” a clause to be consistent with the rest of the contract. In addition, with a clause library, your contract process, from draft to revisions, is more consistent and efficient.
Reduce risk
Non-standardized contract drafting is a lot more susceptible to drafting errors. Having a clause library can streamline the content layout and usage of terminologies across the contracts. And hence, a clause library can help with risk mitigation and safeguards while also improving efficiency, accuracy, and compliance.
Standardize obligations
Clause libraries make it easier to keep track of and fulfill your contractual obligations while identifying and managing them when you are negotiating beyond the structured methodology.
In a nutshell
Maintaining a library of approved templates, accessed with a single click from within your contract management software application saves time searching for the right folder and eliminates the guesswork about which templates are appropriate to use.
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