Enterprise Contracts: What to Know Before Executing

Enterprise contracts form the backbone of every organization. Essential for conducting business, enterprise contracts come in many varieties, ranging from bills of sale to construction contracts and more.

To make the most out of your enterprise contracts, you need to make sure they express the desires of both parties, comply with relevant laws and regulations, and—most importantly—are legally enforceable. Since drafting, negotiating, editing, and executing your enterprise contract requires a lot of time and energy, meeting all of these goals can be difficult. This is why you and your team should adopt advanced contract management tools like Ironclad Editor to streamline the enterprise contract creation and execution process.

Read on to learn more about enterprise contracts and how to create and manage them. By the end of this article, you’ll also learn how to use Ironclad to manage and simplify the enterprise contract lifecycle.

An enterprise or business contract is a legal document created between two or more parties to establish the terms and conditions of a business deal. It can be written or oral, but it should be recorded on paper or in digital form so both sides know what they’re getting into.

Like all contracts, an enterprise contract is a promise where one party agrees to do something in exchange for payment, products, services, or other benefits. However, unlike simpler contracts like eCommerce checkouts, enterprise contracts require a high degree of personalization, terms of service, and mutual NDAs. In other words, if you decide to use a template to start drafting your enterprise contract, you’ll have to change much of the standard language and draft many of the terms from scratch. This is because each enterprise contract is modeled specifically for a specific business deal.

‌Enterprise contracts are encountered every time two or more parties agree to exchange a product or service. As such, enterprise contracts can come in any shape and form, including:

• Bills of sale
• Construction contracts
• Promissory notes
• Equipment and property leases 
• Partnership agreements
• Employment contracts, including contractor agreements

Due to their diverse nature, there’s a lot of variation between each enterprise contract. Despite these differences, every enterprise contract must have the following components to be legally enforceable:

• The date typically appears in at least two parts of the contract. The first time it appears, it should be at the top or beginning of the contract, to indicate when the contract was created. The date should also be at the bottom of the contract, next to each party’s signatures to indicate when they signed the contract.
• You then need to list out who the parties to the agreement are. Mention whether they are corporations or individuals and which party is the seller or buyer.
• Consideration is a general statement of what the product or service provider is doing for the buyer. For instance, if the buyer is paying $5,000 for a used car, the consideration is the used car.
• Terms are highly personalized, present detailed information about the business deal, and are the most important part of the enterprise contract.   
  • The terms of your enterprise contract will vary from contract to contract since it outlines what the deal is all about, but you would typically include the following:  
    • How much the buyer is paying and what the service provider will be doing for the buyer in return
    • The length of the contract
    • Whether the contract can be canceled and how it can be canceled
    • What happens if a party dies or is unable to complete their side of the agreement
    • Whether the parties will use arbitration, mediation, or a mix of both to resolve any potential issues down the line

To create an enterprise contract, create a basic outline answering the points above. After you’ve finished your outline, check for the following features.

• Legality: Is there anything in your contract that may not be legal? Check the laws, rules, and regulations of your jurisdiction or the chosen jurisdiction of the transaction to make sure.
• Enforceability: Is your contract enforceable? For your contract to be legally enforceable in court, it needs to have a legal purpose, establish mutual agreement between the parties, have valid consideration, and involve legally competent parties that came to an agreement of their own will.
• Acceptance: How will your contract be accepted? Will you be using traditional eSignature, clickwrap, or embedded signing? Think about which form of acceptance best fits your contract. For most enterprise contracts, you’ll probably use traditional eSignatures, since enterprise contracts are non-standard, negotiated agreements that require a level of customization.

Once you’ve touched on all of these features in your notes, it’s time to start writing the first draft of your enterprise contract. Be as detailed as possible without being overly wordy—contracts are meant to be easily understood by all parties. Look over your draft a couple of times before moving on to the next stage of the contract management lifecycle— contract negotiation.

With so many things to look out for, enterprise contracts can be difficult to write, draft, and execute, particularly if you’re dealing with hundreds or thousands of active contracts at the same time, making locating important contract information a seemingly impossible task.‌

In such a situation, a contract can seem more like a hindrance than an enabler. If your organization has yet to digitize all of its contracts, it will be even more difficult for you to keep track of important deadlines, IP clauses, and other small details that can expose your company to risk. Imagine having to look through stacks of paper contracts in storerooms and physical cabinets just to locate a deadline for a deal—you’ll end up wasting at least half a day just to locate this tiny detail.

That’s why you need to invest in modern contract management software. Good contract management software is inclusive, streamlined, and intuitive and gives you all of the functions you need to contain these risks. Ironclad does this and more—it’s an all-in-one solution that gives you full transparency into the whole contract management lifecycle. 

‌Sleek and powerful, Ironclad transforms contract lifecycle management from a stressful, time-consuming mess to a scalable, predictable process by storing and tracking relevant metadata on all of your contracts in a searchable centralized repository.

Ironclad comes with many tools that simplify the enterprise contract management process. Here are some of them.

Workflow Designer

Codeless and easy-to-use, Workflow Designer allows you to create a contract with just a few clicks of your mouse. 

Creating and approving enterprise contracts only takes a couple of minutes in Workflow Designer. All you have to do is upload a template, tag fields as needed, and add approvers and signers to create the first draft of your enterprise contract

Workflow Designer also allows you to turn templates into automated workflows that anyone from your organization can access. This allows you to ensure that your contracts are consistent across departments, so everyone will be on the same page when working on certain deals or types of contracts, whether they’re from Legal, Marketing, HR, or another department. 

While most other contract management software have steep learning curves, anyone can use Workflow Designer’s click-and-drag interface to add automated guardrails for review. This automation will help you and your colleagues save a lot of time, particularly for standardized, low-risk enterprise contracts that don’t require a great deal of redlining or negotiation. ‌

Our Workflow Designer also allows you to: 

• Cut down on training time by assigning active contract management roles to employees and departments with specialized knowledge
• Boost business agility by sending updates instantly

Dynamic data repository‌

Ironclad’s Dynamic Repository is another codeless tool that empowers you to make the most out of your contract metadata.

Our data repository gathers all of your contracts into one searchable hub. With everything in one place, you’ll be able to locate mission-critical data about your deals. Say goodbye to unanswered questions and long afternoons spent looking for paper contracts in the storeroom—with Dynamic Repository’s advanced search functions, all you have to do is key in search terms to locate the information you’re looking for.

Dynamic Repository also allows you to create intelligent alerts, reports, and process automation that make things much easier for your Legal team. For example, you can automate weekly emails about upcoming key dates, which will empower you and your team to work together to meet all deadlines and achieve the best outcome.

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Enterprise contracts play an essential role in day-to-day business transactions. As such, it’s vital to know how to draft them properly. Otherwise, your enterprise contract may not be an accurate representation of the deal you and the other party want to enter into. Worse yet, your contract may be legally unenforceable in court.

We know how tough it can be to make sure all of your contracts are up to snuff, especially when you have hundreds, if not thousands, of active contracts. That’s why you should consider Ironclad. A premier contract management platform, Ironclad will make the contract management lifecycle quick and efficient. With our Workflow Designer’s templatable workflows and our Dynamic Repository’s searchable hub and intelligent alerts, working with enterprise contracts will be more productive and streamlined than ever before.

Interested in trying Ironclad out? Request a sandbox demo here.