What is Contract Authoring?

Whether it's for partnerships, service agreements, or procurement deals, understanding the ins and outs of contract authoring is critical for businesses seeking to mitigate risks and maintain strong, transparent partnerships.

Contract authoring is the first step in the contract creation process. When done right, it leads to mutually beneficial business relationships. When done wrong, it can lead to disastrous consequences, including legal disputes, lawsuits, and reputation loss.

In this article, we will cover the importance of contract authoring, steps in the process, associated challenges, and how good contract authoring software can help you create accurate and comprehensive contracts in an efficient, scalable, and cost-effective manner.

What is Contract Authoring?

Contract authoring refers to the process of drafting, creating, or writing a legal contract or agreement.

Lawyers, attorneys, contract specialists, or professionals with relevant experience author contracts. During authoring, they draft and create the clauses, terms, conditions, and provisions in clear legal language that outline the rights, responsibilities, and obligations of the contracting parties.

Goals of contract authoring

This process is a critical step in the creation of legal agreements. The authors must ensure that contracts are clear, enforceable, accurately represent the intentions of the parties, protect against legal liability, and hold up in court.

Why is Contract Authoring Important?

While some types of verbal contracts are valid and legally enforceable, the law requires most contracts to be in writing. In addition, most business agreements are in documented form because written contracts reduce the risk of misunderstandings, protect the rights of all parties, and provide a legal basis for resolving any conflicts that arise.

This is why authoring contracts is extremely important. This article takes a closer look at this topic in greater detail..

Clarifies expectations and responsibilities

All parties to a contract must be clear about their respective responsibilities, and their expectations must be grounded in reality.

Contract authoring plays a major role in this regard: the terms and clauses of a contract clearly define the rights and obligations of all parties. As a result, each party knows their obligations, in addition to what they can expect from the other party. This clarity goes a long way towards ensuring compliance with the terms of the contract, prevents misunderstandings, and serves as a benchmark during contract performance.

Creates documentary evidence for future reference

One of the main objectives of written contracts is a document that serves as a reference for the duration of the contract.

Contracts serve as an official record, providing evidence in case of disputes or legal challenges. They detail the terms under which agreements were made and, if necessary, can be used as proof in a court of law.

Provides a framework for mitigating and minimizing risk

Vague language, imprecise terms, and inaccurate information in contracts combine to form a minefield of confusion, conflicts, and risk.

Contract authors use clear and precise language, check and recheck information, and get contracts reviewed. They include liability clauses, indemnities, and insurance provisions to protect individuals and businesses against financial, operational, or reputational risk.

Extraordinary events such as natural disasters and pandemics are beyond control and can prevent the fulfillment of contractual obligations. Force majeure clauses in contracts provide protection from liabilities when such events prevent performance.

Steps to Contract Authoring

Contract authoring is a structured process that involves the following stages.

1. Information gathering

Before an author can create a contract, they must collect relevant information that helps them understand the requirements of involved parties and the purpose of the contract. Without this basic understanding, an author cannot create a relevant contract document.

Information gathered during this phase of the process also helps authors understand the type of agreement they need to create, potential risks, and what they need to include in the contract to create a comprehensive and legally binding document.

2. Contract drafting

Once authors have the required level of clarity, they can start creating the first draft.

The draft will include the necessary details of the parties involved, clauses, sub-clauses, and terms and conditions that are necessary for achieving the purpose and objectives of the agreement.

3. Review and editing

Once the draft is ready, it must be reviewed by relevant professionals for accuracy, and by legal experts for clarity and legal compliance.

Review and editing is often an iterative process, requiring multiple rounds of revisions before a contract becomes acceptable and the contract creation process can proceed to the next step.

4. Negotiation and revision

Once the contract document is ready, the parties can review and discuss its contents, which can again require modifications to address any concerns that arise.

5. Finalization

After the concerns of the parties are addressed and necessary modifications are made, the final version of the contract document can be signed, after which it becomes a legally binding agreement.

Challenges of Contract Authoring

The contract authoring process poses several challenges for authors, including:

Time and resource constraints

Creating lengthy and complex contracts is a time-intensive process that requires the engagement of multiple resources including contract authors, and professional and legal experts.

Moreover, authors must often work on multiple contracts at the same time and deal with internal pressure from colleagues and external pressure from clients to deliver contracts in the least possible time.

Scalability

For businesses needing to produce multiple contracts each month, time and resource constraints create another challenge i.e. scalability. To overcome this challenge, businesses must hire more resources, which increases expenditure, or transition to software-based contract automation solutions.

Errors and inaccuracies

Time and resource constraints and constant pressure can lead to errors and inaccuracies in contract documents. This is especially true for manual contract creation processes.

Legal complexity

Contracts involve nuanced legal language, multiple stakeholders with different interests, and the need for compliance with varying laws and regulations.

All contract authors are not legal experts and must consult with lawyers and attorneys to ensure contracts are clear, fair, enforceable, and legally sound.

Ambiguity and vagueness

A contract, like any other document, is open to interpretation. Ambiguous and vague language can lead to confusion, disputes, and unintended legal consequences.

Attention to detail and avoiding vague or unclear terms are critical to ensure that contracts serve their intended purpose and stand up to scrutiny in legal proceedings.

What is Contract Authoring Software?

Contract authoring software are tools you can use to streamline the contract creation process, reduce legal risk, improve compliance, and enhance efficiency. These software can help you overcome most of the challenges of manual contract authoring processes.

Some of the most important features of contract authoring tools are:

Pre-built templates

Pre-built contract templates are one of the main features that improve the efficiency and efficacy of the contract creation process.

Docupilot, a leading contract authoring solution, gives you multiple options for creating templates. You can

• Select a template from the library
• Create a template from scratch with the Online Builder
• Upload and use an existing template in PDF, Work, Excel, or Powerpoint format

Templates and content library

Templates and clause libraries are key ingredients of modern contract authoring processes.

Businesses might have to create hundreds of contracts each month. Moreover, they might need to create different types of contracts, each with its own purpose, structure, subject matter, terminology, dispute resolution mechanisms, payment terms, etc.

Creating each contract from scratch is not only impractical, it is also a waste of valuable time and resources.

Templates with relevant subject matter and clauses serve as the starting point for contract creation. Authors can make necessary changes, including adding or removing clauses and information before submitting the draft for approval.

AI-powered authoring

A new feature of contract authoring is the use of artificial intelligence (AI) for improving efficiency, accuracy, and consistency in drafting contracts.

AI can create drafts from pre-defined templates and modify them based on user input. Furthermore, based on the context and type of contract, AI can also suggest appropriate clauses for inclusion.

Third-party software integrations

Software tools are, by design, optimized for specific tasks and processes. For this reason, any single software tool cannot satisfy each and every requirement that a business may have.

To address this, software tools support integrations with other software. Docupilot, for example, integrates with 70+ apps, including Airtable, Excel, and Salesforce.

Conclusion

Contract authoring is a critical process that helps involved parties protect their interests, minimize risk of disputes, and benefit from business relationships.

Manual processes pose several challenges for contract authors, including time and resource constraints, errors and inaccuracies, legal complexity, and ambiguity and vagueness.

Contract authoring software, like Docupilot, provide a solution for these challenges and help you increase productivity and reduce costs at the same time.

Sign up for a 30-day free trial and take advantage of a full-featured contract authoring solution optimized for your business.