Contract templates – and their management – is not a topic about which much is written, yet it was the source of animated discussion at yesterday’s IACCM member meeting in Zurich.
The big issues seemed to be, first, the extent to which templates cause rigidity and second, whether there is any point having them if you typically deal with trading partners who impose their terms.
In both cases, I think the problem is a misunderstanding of the role of templates as part of a contract management strategy and process.
Just like any rule book, templates should not be a static imposition. They must reflect business realities and organizational goals. That means a need for regular adjustment and the recognition that they reflect principles, not absolutes. Good templates are embedded within a process that monitors shifts in market and business needs or circumstances and which are adjusted accordingly. They are also supported by relevant levels of guidance, training and empowerment, for example in the use of fall-backs and alternates or in negotiating on another party’s terms.
Templates exist to reflect a known base-line of capabilities. Without them, a business will be less efficient and more risky. But as with any business instrument, they must be developed collaboratively and remain flexible to changing needs.
IACCM will shortly run a webinar on ‘Best Practices in Contract Template Creation & Management’