What is an executed contract?
An executed contract is an agreement that has passed the signature stage and has been approved by all parties involved. It establishes a contractual and enforceable relationship.
What is the importance of an executed contract?
Improper execution of a contract can result in:
- Contract ambiguity: A successful contract execution uses clear language that is easy to understand by all parties. If contract terms are unclear, litigation may ensue or the agreement may not be enforceable. In addition, it could frustrate business partners or cause costly delays.
- Delays: When it comes to your business, time is money. It is costly to waste time during the contract execution stage. Effective contract management reduces the chance of unproductive delays by reducing unnecessary delays and speeding up the deal.
- Unenforceable contracts: Unfinalized contracts turn out to be ineffective. The agreement cannot be enforced in court if this is the case. If the contract isn’t properly executed, all the hard work will be for nothing. Costly litigation can result in severe financial losses, lost value, and lost resources.
What is an execution date?
Execution date refers to the date when all necessary parties have signed and finalized the contract. The agreement is complete once it has been signed and nothing else needs to be done.
The “effective date” is when the legally binding obligations of the contract begin, not the execution date. Despite the fact that many contracts become effective immediately after finalization, many others do not. The dates of contracts are often difficult to determine without submitting them to Legal for approval.
What to consider before executing an agreement.
Enforce required signatures: An enforceable agreement requires signatures from certain individuals within the organization. You need to identify the correct counterparty to sign the agreement both for the sake of your business and to protect your rights. A contract must be signed by authorized officers or agents in most deals with businesses. The person signing must be authorized to perform the action and have the legal authority to bind the business or themselves.
Understand all contract terms: The terms of an agreement are likely to be binding once you sign the contract, so it is important that you understand what they mean for your business. Make sure to revise all dates, prices, and specifications. If you expect your agreements to be enforced, make sure they are in writing.
An effective signature method: Different types of contracts require different ways to be signed. Signing an agreement with a wet signature involves putting pen to paper. It is often time-consuming and inefficient to handle situations this way in today’s fast-paced business world. High-volume agreements can be handled with click-to-accept methods, such as clickwrap agreements, without much negotiation. Improve your contract management processes by streamlining and accelerating online agreements.
After contract execution.
Business arrangements do not end with the execution of the contract. Once you’ve finalized your agreement, it’s time to implement. Ensure that the counterparty fulfills its obligations as well. By doing this, you ensure that you receive the full benefits of your executed contract and that your business continues to grow over the years.
- Analyzing executed contracts: Metadata from executed contracts can be collected and reviewed during the analysis stage. An agreement’s information can be accessed using a data repository. You can quickly find contracts and answer questions about them with one reliable search engine.
- Optimizing executed contracts: By analyzing the acquired data, you’ll be able to see where you’ve achieved success and where you need to improve. Your contracting processes can now be optimized to increase efficiency and revenue with these powerful tools.
- Renewing executed contracts: When the contract is up for renewal, you will decide whether or not to renew it. This decision will be based on the analysis you conducted. Maintaining efficiency and organization is important to contract renewal because many companies fail to renew due to lost contracts and loose depositories.
- Ask: It’s important to ask the right questions when exploring different solutions. Is the platform going to take a long time to integrate and would your team require training? How will your organization and partners access, share, and store data within the network? Are there updates coming to the platform? What changes can be expected? You need to understand the vendor’s services as clearly as possible, how they can be applied to your specific processes, and what support you can expect in the event of difficulties.