In August 2020, Epic Games added a direct payment option to its popular game Fortnite, which violated the App Store guidelines of Apple. As a result, Apple removed Fortnite from the App Store, leading to a legal battle between the two companies. During the trial, Epic Games argued that Apple’s App Store practices violated antitrust laws, while Apple argued that Epic Games breached its contract by violating its App Store guidelines. Ultimately, the court ruled in favor of Apple, stating that Epic Games breached its contract with Apple and ordered Epic Games to pay damages for violating Apple’s App Store guidelines.
Prevent breach of contract with effective implementation of contract compliance and obligation management. How?
Another example is the case of Wells Fargo, which was fined $1 billion by the Consumer Financial Protection Bureau (CFPB) for failing to meet certain contractual obligations related to its auto lending and mortgage practices. The company was found to have charged customers for insurance they did not need and failed to properly refund them, among other violations of its contractual obligations.
These cases highlight the importance of effective contract compliance and obligation management in avoiding costly penalties and protecting an organization’s reputation. It also emphasizes the need for businesses to carefully review and adhere to the terms of their contracts to avoid costly legal battles and penalties.
Tools & Tech for Effective Contract Compliance and Obligations Management
Managing contract compliance and obligations can be a daunting task for any organization, especially when dealing with a large number of contracts.
The average cost of regulatory compliance is 5.9% of annual revenue. (WorldCC, 2021)
Companies often struggle to keep track of their contractual obligations, leading to potential legal risks and financial losses. However, with the advent of advanced technology and tools, managing contract compliance and obligations has become more efficient and effective.
Contract Lifecycle Management (CLM) Software
With its features and capabilities, a CLM system can improve your contract management efficiency and easily ensure compliance. Check out some of the ways a CLM system can benefit your organization.
- Offers a centralized contract repository for effective tracking, searching, and organizing contracts
- Automates contract creation, approvals, and workflows
- Provides real-time visibility into contract status and compliance
- Allows for easy contract renewal and amendment management
AI-powered Contract Analysis Tools
Organizations can revolutionize their contract analysis with AI-powered tools that can extract and interpret data from the contracts, providing deep insights and analysis in seconds. See how it helps in maintaining effective contract compliance:
- Automatically extracts important contract data such as key terms, clauses, and obligations
- Provides analysis and risk assessment to identify potential compliance and obligation issues
- Enables quick and accurate contract review and analysis
Using AI to Extract Insights from Unstructured Third-party Contracts. Read More>>
Aavenir Unveils Avy AI, the Generative AI Assistant Tool for Connected Contract Management Solutions on ServiceNow. Learn More>>
Contract Compliance Tracking Tools
Contract compliance tracking tools are a part of the larger Contract Lifecycle Management (CLM) solutions. CLM solutions typically include a range of features and capabilities that help manage the entire lifecycle of a contract, from creation to execution and beyond. Contract compliance tracking is an essential component of CLM solutions. It helps organizations ensure that they meet their contractual obligations and stay in compliance with relevant laws and regulations. Here’s how they can help:
- Enables tracking of contract milestones, deadlines, and obligations
- Sends alerts and notifications for upcoming or missed obligations
- Provides real-time visibility into compliance status and issue resolution
E-signature and Document Management Tools
E-signature and document management tools help protect contracts from unauthorized access or modification. It can help improve contract compliance by reducing the risk of errors and executing contracts on time.
- Enables secure and efficient electronic signature and document sharing
- Provides centralized document storage and access for easy retrieval and management
- Streamlines contract review and approval process
Aavenir Contractflow vs DocuSign CLM at a glance! Check out now>>
Business Intelligence (BI) and Reporting Tools
Business Intelligence (BI) and Reporting Tools help boost contract compliance by providing real-time data insights, identifying compliance gaps, and highlighting areas for improvement in contract management processes.
- Provides real-time and detailed insights into contract performance, compliance, and risks
- Enables customized reporting and analytics to support strategic decision-making
- Provides data visualization tools for easy understanding and interpretation of contract data
Vendor and Supplier Management Tools
Supplier management tools help boost procurement contract compliance by providing real-time supplier monitoring, risk management, and contract performance tracking.
- Enables effective management of vendor/supplier relationships and contracts
- Provides real-time visibility into vendor/supplier performance, compliance, and risks
- Enables collaboration and communication with vendors/suppliers for effective issue resolution and risk mitigation
From Data Silos to Actionable Insights: Leveraging Connected Contract and Vendor Data. Read More>>
Closing Thought
By utilizing tools and technologies, organizations can enhance overall contract management efficiency, minimize risks, and improve contract compliance. Streamlining the contract management process and proactively monitoring contractual obligations can help identify areas for improvement, optimize performance, and turn regulatory compliance into a competitive advantage. This can help reduce legal risks, transforming contract management from a burden to a strategic asset.
