When the interested stake holders come together in agreement and sign on the dotted lines, it sets in motion the execution and the actual responsibility from both the sides in fulfilling various obligations.
Digital signature kick-starts the very beginning of the contract execution in the contract lifecycle management. It’s from this point of a contract thereon is considered for the way ahead as post-contract management activities.
Post contract management follows a series ofa mandatory and vital set of post-contract activities like obligations, compliance, and Amendments& Renewals.
At the start of the contract execution, both the parties to the contract, and all the concerned stakeholderswho need to perform the purposes of the contract, must accomplish to discharge the contractual obligations, terms, and conditions. Non-performance of a contract entails a variety of legislative actions that are carefully designed to undertake in the contract itself.
Contract execution is overseen in terms of financial or other transactional output saturation limits mentioned in the contracts. This can be between two individuals or one business to another or one individual to a complete business entity or at times within inter departments of the organization itself who are obligated to complete and adhere to the contractual terms.
It makes better sense when the actual stakeholders or the ones responsible for the contract execution process are validated with every term of the contract,and thus have complete transparency in carrying out a successful performance to the said terms.
The term of the contract key decider is the date of execution until the termination date. The period in between therein lies the obligations, value, and business.
Next, we have the compliances, which are both standard and evolving with time. Rules, regulations may find itself, changed, updated, or become completely irrelevant with time. The second part of success in the execution of the contracts is staying abreast of the compliance and the latest relevant rules and regulations framework. The contract needs to be fine-tuned for any changes in the existing compliances and geared to work further towards enhancing the value of the contract in deeming the obligations.
Amendments & Renewals is the gateway in the execution of the contract and deciding the future conceptualization of every existing contract and their lifecycle. Consider, for instance, the COVID-19 pandemic had completely overhauled the performance of contracts. Many new amendments for non-performance of the contracts were considered in terms of force majeure, material adverse effects, a new outlook in business continuity plans, to say a few.
Contracts were either closing out prematurely due to extreme non-performance, the pandemic-pushed business in the beginning and mid of the lockdown time frames. Individuals and businesses are looking up now for alternate strategies and building them up. The initial dated terms of the contracts were extended or in severe cases were made void. But the change and restructuring of the contracts became inevitable.
Contract execution is not the signing in itself, the terms of performance lie beyond that. A carefully planned, supervised and updated contract is a journey that begins with contract execution.
AEREN LPO’s Contract Lifecycle Management experts provide full-fledged contract management support for each phase of a contract. Call us today to learn more.