A contract playbook sets out your company’s position on contract clauses.
A contract playbook is a single place where you set out your organization’s position on common contract clause categories such as indemnities, confidentiality, and warranties. It sets out what clauses can be accepted, rejected or amended and who has the authority to accept, reject or amend different types of clauses.
Your playbook should include:
- A description of your contract processes and contact roles and responsibilities
- Your organization’s risk profile
- Your negotiation strategy – goods, services or both? What are important deal terms to focus on? Where are you comfortable compromising? Who handles negotiations?
- Decision making authority levels – who can sign off on what decisions?
- A list of standard clauses (accepted/rejected/amended) included in your template contracts
A contract playbook allows you to review contracts quickly and to remove bottlenecks in contract review.
A Contract Playbook allows you to review contracts quickly, and it helps remove bottlenecks in contract review. A contract playbook allows you to identify the areas of a contract that your sales team does not always know. You can then figure out how to make those parts of the contract easy for your sales team to understand by providing guidance on how they should respond when faced with those items in a contract.
Additionally, you can use your understanding of common items in contracts to structure your playbooks so that they automatically move contracts forward based on completed actions. For example, if all issues have been addressed and approved for a given section of the contract, your playbook could start the final approval phase automatically instead of requiring someone to manually do this step every time.
Your company needs to have a standardised approach to reviewing contracts.
A standardised approach is particularly important when you have several people reviewing contracts. It means you’re more likely to achieve consistent outcomes, which reduces the risk that the company will be in breach of a contract.
It also helps protect against commercial risks. For example, if your company enters into contracts under which it will pay a software vendor for its services on an ongoing basis and that vendor has a clause entitling them to early termination for convenience (i.e. without cause), then this may create a risk that the vendor could terminate the contract and effectively walk away from any long-term commitment to your company. This can be mitigated by agreeing upfront that the vendor won’t be able to terminate for convenience unless it’s prepared to pay compensation to your company for any costs incurred as a result of early termination.
When dealing with vendors who have standard template agreements (for example, software vendors or banks), it’s beneficial to prepare a set of comments or even suggested amended clauses so there’s less back and forth during negotiations over each individual contract.
Your contract playbook can be used to inform sales-people what clauses will be accepted, rejected or amended.
A contract playbook can be used to inform your salespeople what clauses will be accepted, rejected or amended.
Your sales teams can use the playbook to negotiate better deals and to get contracts signed faster.
A contract playbook is a good way to increase the speed at which contracts can be reviewed.
Contract playbooks are a great way to increase the speed at which your contracts can be reviewed. They include a list of clauses that your sales teams can accept, reject or amend as standard, which makes them much quicker to review than going through each clause from scratch.
A contract playbook allows you to standardise the approach taken when reviewing contracts and means that your sales people will know what clauses are acceptable without having to change their pitch for each new customer.