The Contract Expert feature enables organizations to define rules for creating contracts and reporting policy deviations.
Contract Creation Rules: These rules assist users in authoring complex contracts with minimal legal supervision. Using Contract Expert, companies can centrally define and enforce their business policy rules that govern the contract clauses to be included in a contract document. Rules can be applicable to specific templates or applied globally for all contracts that are authored in the organization.
After rules are defined, you can invoke Contract Expert while authoring a business document like Sales Agreement, Sales Order, Blanket Purchase Agreement, or Purchase Order. Contract Expert leads you through a contract creation questionnaire and automatically adds required clauses based on the responses that you provided. In addition to the responses to these questions, rules can also be based on the terms that are negotiated on a business document, such as payment or shipment terms, and item category. For example, contracting organizations may require additional clauses in contracts involving hazardous materials, or in contracts for which the supplier or customer is located in a specific foreign country.
Contract administrators can choose to remove the clauses that are brought in by Contract Expert or select alternates during negotiation. However, these changes are flagged as deviations during the approval process, ensuring proper scrutiny of all nonstandard terms.
Policy Deviation Rules: These rules can capture and report changes in business terms on business documents as deviations from corporate policy. As a result of negotiations on business documents, organizations may negotiate terms that exceed preapproved company policies and regulatory limits. For example, as a policy, all customers are allowed payment terms of Net 45. However, the contract administrator may agree to payment terms of Net 60 on a specific business document. This deviation should be brought to the attention of contract approvers to ensure that all deviations from corporate standards are approved in accordance with the approval policies. The Policy Deviation Rules feature helps you define all such corporate policies and identify any variations from these policies on contracts.
The sections in this chapter include: