Contracts are a part of every adult’s life, formal or not, so even if you haven’t heard of the term “contract management” you’ve probably done it yourself (and many others have, too). Contract management is a combination of the processes of monitoring contract formations, legal validity, and offerings by making sure that they conform to the terms of delivery and pricing-verbally (and arguably, informally) or in writing. In other words, it’s essentially the way we keep contracts with employers, landlords, businesses, etc. organized, and make sure that those terms are agreed to and upheld.
The instant impact of poor contract management is obvious-ever had an HOA unexpectedly raise fees? Or, gotten into other types of miscommunication over perks of employment? These types of issues can be easily avoided by confirming the details of contracts in writing and doing the necessary research to establish the risks of poor contract management. In the short term, missed communication or lack of communication with all parties involved can cause frustration and uncertainty.
Over time, however, the downward spiral continues. Failure to sign valid contracts with third-party service providers can lead to unexpected expenses down the line, for example, after a wedding when someone thought they would receive a refund and didn’t. Communicating these dealings verbally compromises the value of the agreement due to the inability to confirm that the terms were agreed upon as intended. Also, signing blank contracts in which the terms are to be filled in later can lead to a situation where there is no signature or confirmation at all, and the contract can become invalid altogether.
Contract management is often a poorly-noticed area of concern for small businesses, and this carries heavy consequences for larger businesses as well. Leaving it to just one person, or delegating a pile of paperwork to an underqualified assistant or intern results in missed opportunities that could have been used to negotiate better deals with vendors or business partners. Without meeting with them in person to review the record, it can be difficult to gauge the risk factors for each, and it can become a guessing game that could result in significant setbacks. It’s this omnipresent issue that U.S.-based restaurant franchises with hundreds of locations are aware of as the cost of their faulty legal agreements begins racking up. By setting aside time to do real research, communication and documentation, the scope and impact of contract management shrinks as agreements can be confirmed and fulfilled.
Everyone signs a contract when they obtain a smartphone, for example, and the goals and uses of that development evolve tremendously from the front end of an arrangement to the back. Additionally, your phone may come with an extended warranty and other services that require a signature, and without ever thinking to question whether or not the terms have been fulfilled, it’s easy to pass off the responsibility of management to the next person or entity. For more mild cases, this could be as simple as committing to paying extra fees for third-party services that weren’t explicitly defined as mandatory when you purchased the phone, but for more complex cases where the device falls short of the promised value, it’s all the more important to contact customer service and to consider pursuing your claims through small claims courts.
In fact, just learning to be aware of the existence of free legal assistance websites like Legal Shield can make it easier to backtrack and follow up on contract management mistakes after the damage is already done. Expenses from mismanaged contracts can be substantial, and tend to compound. For more information on contract management, you can visit Wikipedia.
