When can you use a digital contract?
In the past decade, businesses have undergone a digital transformation. Teams got Slack, Zoom and collaborative tools, and Sales and Procurement got CRM and cloud ERP, respectively. Due to this adoption of new technology, business moves faster than ever.
However, contracts haven’t undergone this same transformation. For the most part, they’re still slow, opaque, and often the source of frustration for organizations that need agility more than ever. Luckily, things are beginning to change.
Powerful contract management tools like Ironclad have transformed contracts forever, turning them from barriers to enablers. By digitizing contracts, Ironclad unlocks operational efficiency, streamlines cross-department collaboration, and empowers organizations to reach their goals.
Read on to learn more about digital contracts and how Ironclad can help you launch contracts for any use case within minutes, and when to use digital contracts.
What are digital contracts?
Digital contracts are contracts that are managed through a digitized contract management system. Compared to traditional contract management systems, digital contracting streamlines contract creation and organization. It digitizes all the steps of the contract management lifecycle (CLM) and works with other platforms in your contracting workflow, such as SAP, point of sale, and Oracle.
Most digital contracting software will give you the following:
- A centralized hub for storing contracts and capturing metadata
- A workflow designer that allows you to automate contract generation through templatable workflows
- A negotiation-friendly platform or editor
- Workflow and communication notifications
- Clickwrap solutions that allow signers to indicate consent by simply clicking a box or button
Digital contracting offers many benefits. By implementing a digital contracting app into your contract workflow, you can:
Many digital contracting apps have templates that contain guardrails to ensure 100% automatic compliance.
Ironclad, for instance, gives you up-to-date templates and empowers you to comply with legal requirements and organizational policies without the need for manual review.
Break down contract silos
One of the reasons contracting can be difficult is that Legal usually works separately from other departments. With digital contracting apps, you can break down contract silos and connect team members from different departments and systems.
For example, you can use Ironclad’s <Data Repository to store all of your contracts in one source of truth. You can also use our Data Repository to build reports and give team members the ability to access as much or as little of the contract data as is necessary. This means that Sales, Procurement, Legal, and other teams can work together on projects that interest more than one department.
Increase contract transparency and visibility
By storing all of your contracts and contract metadata in a centralized hub that anyone—with the proper permissions—can access, you’ll quickly be able to answer questions about agreements.
Accelerate the CLM process
With answers at your fingertips, you’ll be able to meet deadlines more quickly and create drafts, agendas, and other important documents much faster. Say goodbye to spending hours or days trying to find the answer to a simple contract question.
How to use digital contracts
As you can see, digital contracts can bring a lot to your organization. Here are a few ways you can use digital contracts to your advantage:
In an embedded checkout flow
Firstly, you can use digital contracts in an embedded checkout flow. Instead of sending clunky Word or PDF contracts to customers every time they buy a product or sign up for a service, you can just embed an HTML-native clickwrap contract into every transaction point. All the customer has to do is click on a button or a box to indicate consent and that’s it.
Customers will greatly appreciate this low-touch experience. Not only does clickwrap make it easier for them to indicate consent, but it also makes it easier for them to use your services on the go, as Word and PDF docs often fail to work properly on mobile devices.
Embedded clickwrap contracts also make it easier for organizations to:
- Manage and access a digital audit trail showing who signed what and when
- Present agreements to many signers at the same time
What’s more, clickwrap contracts are fully enforceable in court. Clickwrap is legal under the Uniform Electronic Transactions Act (UETA) and the Electronic Signatures in Global National Commerce (ESIGN) Act.
The UETA has been adopted by every state except New York and the ESIGN Act is federal legislation in the U.S. Clickwrap also gives you excellent back-end records that you can use to prove someone accepted your contract.
In business deals
You can also use digital contracts in business deals, including:
Using digital contracts in business deals will allow you to speed up the negotiation process since you can use your digital contracting software’s negotiation platform to instantly loop in colleagues for their opinion.
In contrast, if you use analog CLM software, you may have to save your business deal contract as a DOCX or PDF file, email it to your colleagues for redlining, and wait for their response. This convoluted method of negotiating contracts can lead to a lot of errors since you can never ensure that the other parties are looking at the latest version of the contract. If your colleague has fallen behind on their emails, they may confuse a version of the contract that you emailed them five days ago with the latest version, leading to delays and miscommunication.
Hosted through links
Instead of hosting contracts on your site or emailing them to signers, you can use your CLM software to share contracts through links. Think Google Docs, but with enterprise-grade functionalities.
If you use Ironclad, you can use our Public Workflow feature to generate publicly hosted contracts through launch forms to customize contract fields and language. This can help you cut down on the time and energy spent on organizing and writing hundreds of different contracts for signers.
Here’s how it works:
- Signer arrives on your site and clicks on a launch form.
- They fill in the form.
- They are redirected to accept an automatically generated agreement on that same webpage.
This powerful feature has helped many companies unlock their potential. For example, DoorDash uses Ironclad to create the right agreement for each merchant to accept based on the information they give on the DoorDash website instead of getting Legal to write and manage hundreds of different contracts. This gives Legal more time and energy to negotiate, draft, and manage contracts that require human ingenuity and legal know-how.
For both standardized and personalized contracts
Finally, you can use digital contracts for both standardized and personalized contracts.
Standardized contracts require little to no negotiation and can be presented to many signers at once. Since they typically use the same or similar language for every signer, they don’t need to be individually edited or reviewed by Legal.
Common standardized contracts include:
- Master service agreements (MSAs)
- Statements of work (SOWs)
- Non-disclosure agreements (NDAs)
- Employment agreements
- Non-compete agreements
- Software license agreements
- Terms of Service agreements
- Rental property agreements
- Influencer agreements.
We highly recommend using clickwrap for standardized contracts. Although you can use clickwrap for any kind of agreement, clickwrap is a particularly great fit for standard, high-volume, and low-negotiation agreements.
On the other hand, personalized contracts require negotiation. They are often presented to only one or a few signers at once and don’t use the same or similar language for every signer.
- Enterprise agreements, such as partnership agreements, construction contracts, and bills of sale
- Joint marketing agreements
- Commercial contracts
- Content licensing agreements.
Personalized contracts have many unique details, including deadlines, contract-specific definitions, milestones, and more. As such, they can be hard to keep track of if you’re still using analog CLM software that doesn’t prioritize contract visibility and transparency.
That’s why you should use modern digital contracting software like Ironclad to create, manage, and deploy personalized contracts. By creating, storing, and managing personalized contracts in a digital contracting system like Ironclad, you’ll be able to locate questions to answers, deadlines, and more within seconds.
Clunky, slow, and difficult to manage, contracts are challenging for every business.
Luckily, they don’t have to stay that way. Employing enterprise-grade digital contracting software like Ironclad, you can speed up the process without sacrificing control, transforming contracts from blockers to enablers.
Unlike traditional CLM software, Ironclad has everything you need to create and launch digital contracts and workflows in minutes. Powerful, sleek, and intuitive, our software comes with a gamut of tools that will help you minimize risk exposure, break down contract silos, increase contract transparency, and accelerate the CLM process.
You can also use Ironclad’s digital contracting capabilities for any kind of contract or situation, including embedded checkout flows, business deals, links, standardized contracts, and personalized contracts.
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Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.