Key Takeaways

  • The contract execution process goes beyond signing—it involves implementing, monitoring, and managing contractual obligations.
  • Poor post-execution practices (e.g., scattered storage or no renewal process) lead to lost opportunities, compliance issues, and higher costs.
  • Performance measurement is crucial to evaluate contract success, mitigate risks, and align with business goals.
  • Centralized tools and CLM platforms improve visibility, automate renewals, track obligations, and provide actionable insights.
  • Emerging best practices include using digital signatures, maintaining detailed execution records, and integrating compliance checks.
  • In-house legal teams benefit from structured workflows, role-based responsibilities, and automation that streamline execution.
  • Execution types vary: manual, electronic, or hybrid, depending on the contract type and regulatory requirements.

Contract execution process refers to the activities involved in implementing the terms of a contract. Signing a contract is not the end of the agreement, what follows is usually far more important for its success.

What Happens after a Contract Is Executed?

While much effort is required to prepare a contract, the execution of the contract is the crucial work to be done. The contract is merely an agreement between two parties who are trying to protect their interests. Despite the tremendous amount of resources companies dedicate to drafting contracts, it comes as a shock to see many organizations handle the post-execution process of their contracts with levity.

Common Methods of Contract Execution

Contracts may be executed in different ways depending on the nature of the agreement and applicable laws:

  • Wet-ink signatures: Traditional signing by hand on paper.
  • Electronic signatures: Widely accepted under laws like the ESIGN Act and eIDAS, providing faster, more secure execution.
  • Hybrid execution: A mix of physical and electronic signing, often used for multi-jurisdictional contracts.
  • Clickwrap agreements: Common in online transactions, where a party accepts terms by clicking “I Agree.”
    Choosing the right method depends on enforceability, industry standards, and the parties’ needs.

What Happens When Contracts Are Stored in Disparate Systems?

Several problems can arise if the post-execution of the contract is not handled properly. These problems include fragmented visibility, where the storing of contracts in disparate systems reduces visibility. This can result in:

  • Loss of opportunities.
  • Revenue Loss.
  • Compliance problems, among others.

Importance of Recordkeeping in Execution

During execution, it is essential to maintain accurate records of when, how, and by whom a contract was signed. This recordkeeping:

  • Strengthens enforceability in case of disputes.
  • Provides audit trails for compliance reviews.
  • Reduces risks of unauthorized changes.
    Modern CLM tools automatically log execution details, ensuring transparency and legal defensibility.

What Is the Consequence of Having No Standard Process for Managing Renewals and Expirations?

The result is a lack of consistent process for the management of expirations and renewals of contracts. Often, lack of visibility of contracts and their expiry and renewal date results in the contracts being renewed or expiring automatically without the terms being renegotiated. If there is no standard process for managing the relevant dates of contracts and the necessary actions that need to be taken, it is often too late to act when the dates are due.

New Heading: Role of Legal and Business Teams in Execution

The contract execution process is rarely handled by one department alone. Legal teams ensure enforceability and compliance, while business stakeholders confirm that operational and financial terms align with goals. Assigning clear roles and responsibilities prevents errors, avoids bottlenecks, and ensures timely performance of obligations.

Are Contract Performance Measurements Needed?

Lack of contract performance measurements makes it difficult for companies to identify the benefits, opportunities, and risks facing their contracts. You need to have current information about the performance of your contracts, how they are helping you reach your targets or otherwise, and a set of standards against which you compare them relative to your targets.

Best Practices for Effective Contract Execution

To strengthen execution, organizations should:

  • Define workflows: Set a standardized process from drafting to post-signature management.
  • Use automation: Automate reminders for signatures, renewals, and compliance dates.
  • Ensure version control: Prevent multiple conflicting contract versions.
  • Establish compliance checks: Validate that execution meets internal policies and external regulations.
  • Train stakeholders: Educate staff on execution procedures to minimize errors.

What Is the Consequence of Having No Well-Organized and Well-Managed Contract Management Process After Contracts Have Been Signed?

Some of the consequences of not having a well-coordinated and standard contract management process after execution include increased operating costs, reduced productivity and lower efficiency.

Is a Contract Lifecycle Management (CLM) Software Important?

Yes. A contract lifecycle management software package can significantly enhance the post-execution success of a contract, although the performance and overall success of the agreement depend on the conduct of the parties involved.

Advantages of Using a Central Contracting Tool

A central contracting tool can provide effective solutions to many issues that hinder the success of contract post-execution as they can increase visibility and greater control over an organization's contracts.

Advantages of CLM Platforms

CLMs offer some of the following benefits:

  • Provide greater contract visibility so that decision makers can have access to relevant information as at when due, thus lowering the risk of making wrong decisions.
  • Promotes effective collaboration among stakeholders by providing a standard management process as well as relevant clauses, terms, and conditions of contracts.
  • Prevents misunderstandings by keeping everybody updated on current issues. Offers a seamless post-execution contract handoff, especially when hosted on a cloud-based system.
  • Provides regular updates and notices for key stakeholders on specific important details and actions such as expiry and renewal dates, thus reducing the likelihood of missed deadlines.
  • CLM software provides critical information about your organization's contracts such as risk assessment of individual and contract portfolios, strategies for adding value, tracking contract performance and other insights which promote excellent contract management post-execution.

Signing the contract is not the end of the contracting process, rather, it is the start. With an excellent contract management platform, not only will your post-execution be well managed, but your organization will also have access to vital information and insights that can enhance your company's decision-making process

Future Trends in Contract Execution

The contract execution process continues to evolve with technology. Future trends include:

  • AI-assisted review and execution that identifies risks before signing.
  • Blockchain contracts to ensure tamper-proof execution records.
  • Greater integration with enterprise systems (CRM, ERP) for real-time obligation tracking.
  • Global standardization of e-signatures, making cross-border execution more seamless.

Frequently Asked Questions

  1. What does contract execution mean?
    It refers to the process of signing and implementing a contract so that its terms become legally binding.
  2. Are electronic signatures legally valid?
    Yes. Under laws like the ESIGN Act and eIDAS, electronic signatures are generally enforceable, provided certain requirements are met.
  3. Who is responsible for contract execution?
    Execution usually involves legal teams for enforceability, business teams for operations, and executives for approvals.
  4. What are common risks during contract execution?
    Risks include missed deadlines, non-compliance, unauthorized changes, and lack of visibility due to poor recordkeeping.
  5. How can companies improve their contract execution process?
    By adopting CLM software, defining clear workflows, automating key steps, and ensuring performance measurement and compliance monitoring.

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