Contract Execution And Approval

Contract execution is a critical stage of the contract negotiation process. At this point in the process, you will have decided on a final agreement. Now it is time to sign and finalize the contract, meaning you want to ensure you caught everything, that nothing is missing, and that all necessary parties have approved the agreement. Contract execution is the most important step in the contract management process.

What Is an Executed Contract?

An executed contract is a legally binding agreement that has been signed by all the necessary parties involved. The agreement is now effective and enforceable. Think of it as the official green light, signifying that both sides have agreed to the terms and conditions outlined in the contract. The executed agreement creates a contractual relationship between two or more parties, and each must now fulfill the legal obligations they agreed upon in the written agreement. Once executed, the contract becomes enforceable by law, holding each party accountable for their specified obligations.

Key Characteristics of an Executed Contract

Signatures: 

All relevant parties must have signed the contract. This typically includes authorized representatives from each company or individual.

Finalization: 

Any negotiations or revisions to the contract have been completed, and the final version has been approved.

Enforceability:

The contract is now legally binding, meaning a court can be used to enforce its terms if necessary.

Improve contract execution and orchestrate approvals with dynamic workflows that comply with all company policies. Robust, highly configurable rules increase flexibility while driving approvals and executed contracts.

Executed vs. Executory Contract

It's important to distinguish between an executed contract and an executory contract. An executory contract is an agreement that has been signed but not yet fulfilled. In simpler terms, both parties have committed to their roles but haven't completed the actions outlined in the agreement yet.

For example, a legal SOW contract is executory until the work is finished. Once the project is complete, the contract becomes executed.

The Importance of Executed Contracts

Executed contracts play a crucial role in safeguarding the interests of all parties involved in a business agreement.

Clarity and Certainty: 

A well-defined and executed contract clarifies each party's rights, responsibilities, and expectations, minimizing misunderstandings and potential disputes down the line.

Risk Management: 

Executed contracts establish a legal framework for resolving disagreements. If a party fails to uphold its obligations, the other party can seek legal recourse based on the terms of the contract.

Peace of Mind:

Knowing that a signed and enforceable agreement is in place enables trust for all parties involved in a business deal.

Dynamic Approval Workflow

The contract review process can be lengthy, and most organizations still manage the back-and-forths manually. Contract redlines get lost in email chains, and at times, the negotiating parties aren't sure which version of the agreement is the most up-to-date. There is a better way! Leverage all the data associated with a contract using rule-based workflow definitions. The Icertis platform automatically assembles workflows and orchestrates the approval process, supporting sequential and parallel approvals. Workflows are changed dynamically based on negotiation updates to ensure governance. Business users can easily manage the intuitive rules, definitions, and updates and intervene manually to influence a workflow with ad hoc steps.

Contract Execution

Ensure quick and secure contract execution with the Icertis platform’s out-of-box integrations with DocuSign, Adobe Sign (formerly EchoSign), and other electronic signature platforms. These secure integrations help orchestrate the signature process based on user-defined workflows while seamlessly updating the document and data back to the central repository after execution. Manual signature workflows are also supported, using QR codes to validate incoming signed documents.