Camila Vieira Guimarães
Lawyer at Marcos Martins Advogados
Good business management practices are essential for the satisfactory management of a company’s activities, optimizing processes and mitigating liabilities. In this context, the efficient management of corporate contracts has taken on an important role in the current business scenario, especially in times when it is essential to reduce costs and risks.
CLM (Contract Lifecycle Management)[1], translated as “contract lifecycle management”, is a North American methodology proposed by the National Contract Management Association (NCMA), which saw the need to monitor the lifecycle of contracts for success in corporate business. Brazil has imported this model, but its use in business management is timid, although highly effective.
The contract is the instrument used to make business deals positive, through which the company can avoid conflicts and delimit risks by monitoring the history of the legal relationship. However, in order to do this, it is essential to establish a strategic plan for monitoring contracts in a business environment.
Correctly managing the entire process of commercial relations has become a decisive and differential element when it comes to competition, administration and governance in the market, allowing companies to maximize their activity, mitigating losses and costs, as well as ensuring compliance in commercial transactions.
It is important to manage contracts from the moment they are signed, at the risk of the company taking on unfeasible conditions in the medium and long term, subjecting itself to contractual fines for non-compliance, excessive adjustments and various other factors that can jeopardize the success of the business.
To this end, it is not enough to document a negotiation, but it is essential to analyze the technical, commercial and legal conditions so that the contract is implemented safely and effectively.
A clear example of what often happens in the business world is that, by not managing the expiration date or automatic renewal of contracts, the company is forced to submit to unfavorable prices and conditions because it has not expressed its disinterest in renewing the term or because it does not have time to quote on the market for other contracts.
It is clear, therefore, that contract management makes it possible for the company to plan strategically and, successively, to reduce costs and negotiating power, and that it should cover monitoring of the contract’s life cycle, including the history of negotiations, control of deadlines, financial conditions, as well as any changes that give rise to the drafting of additional terms.
Implementing efficient contract management facilitates choices and parameterizes procedures, generating greater security, viability and efficiency in a company’s commercial relations.
The Marcos Martins Law Firm is able to assist companies in structuring operations by adopting safe and efficient contractual solutions, including the management of corporate contracts.
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[1] National Contract Management Association (NCMA). Available at: . Accessed November 3, 2017.
