Every contract signed by a company constitutes a valuable legal record: obligations, responsibilities, deadlines, penalties… Yet most legal departments have fragmented knowledge of their contractual portfolio. And with good reason: this information is often stored in unstructured files, scattered between departments… The good news is that there is a way of countering these difficulties, and it all hinges on a well-structured, well-worked contract database. We tell you all about it.
Definition
Contracts are not just legal documents; they also contain information that is critical to business management. Contractual data refers to all the elements extracted from a contract in a structured form: key dates, legal clauses, mutual obligations, parties involved, amounts, durations, applicable jurisdictions, and so on.
When extracted, centralized and structured in a contract database, these data become usable. It enables you to :
Why is having a contract database essential?
In short, a contract database transforms contracts into living assets. It is a strategic lever for securing operations, improving governance and reinforcing the position of the legal department as a partner in performance.
From archiving to contract strategy
Too often, contract management is reduced to an administrative function: finding a contract, checking a clause, responding to an emergency. This reactive approach prevents us from seeing the big picture.
Setting up a contract database means transforming this approach.
By structuring contracts in the form of usable data (clauses, dates, obligations, parties, jurisdictions, etc.), the legal department gains immediate, up-to-date global visibility of its contractual environment. It can then :
The benefits of a good contract database
Reducing legal risks
The creation of a contract database is first and foremost a means of ensuring legal certainty.
Let’s take a simple example: the automatic termination clause. Without a centralized warning system, a company can find itself tied to a disadvantageous contract for several years if it fails to give notice in good time.
Thanks to a contract database, these clauses are identified, categorized and monitored. The legal department can set up alerts, establish criticality thresholds, and regain control of its commitments.
Another frequent case is that of applicable law or jurisdiction clauses. In the event of cross-border litigation, their rapid identification via the contractual database can immediately guide the defense strategy.
Strengthening regulatory compliance
Faced with growing compliance requirements (RGPD, anti-corruption, ESG…), companies need to be able to keep good track of their contracts. With a contract database this is possible, as it makes it possible to record:
- Data protection clauses
- Suppliers’ ethical commitments
- Contractual reporting and auditing obligations
It then becomes an essential tool for Compliance, CSR or Legal teams in managing audits, ESG assessments or internal investigations.
Going further: some solutions link the contract database to the management of legal entities, to ensure consistency between contractual structure and governance.
Better management of disputes and litigation
Litigation is often based on a contract at one time or another. That’s why opting for a nice, clean and tidy contract database will enable you to quickly navigate the documentation and find the relevant clauses that will make all the difference.
Legal teams can :
By cross-referencing contractual data with data from legal file management, the legal department strengthens its capacity for analysis and anticipation.
How to build a contract database
Thanks to advances in artificial intelligence, you no longer need to manually enter information, clauses, etc. to build up your database. Artificial intelligence will be able to read the contract, recognize key information (dates, durations, amounts, etc.) and convert it into usable data.
Summary sheets, statistical dashboards, excel audits… all these tools are at your disposal to enable you to make decisions based on your data.
Start building your contract database
Today, contract management tools powered by artificial intelligence, such as those integrated into the DiliTrust Governance suite, enable :
With the right choice of tools, your teams can save time and work better together. Want to find out more? Contact a DiliTrust expert today.
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