No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe
Jump to a Section
  • At the Office
    • Ethics
    • HR Compliance
    • Leadership & Career
    • Well-Being at Work
  • Compliance & Risk
    • Compliance
    • FCPA
    • Fraud
    • Risk
  • Finserv & Audit
    • Financial Services
    • Internal Audit
  • Governance
    • ESG
    • Getting Governance Right
  • Infosec
    • Cybersecurity
    • Data Privacy
  • Opinion
    • Adam Balfour
    • Jim DeLoach
    • Mary Shirley
    • Yan Tougas
No Result
View All Result
Corporate Compliance Insights
Home Compliance

Contracts and Compliance: What You Don’t Know Might Hurt You

by Robin Snasdell
March 14, 2014
in Compliance
Contracts and Compliance: What You Don’t Know Might Hurt You

Do you remember your childhood fears of a monster in your closet? You were afraid because the closet was a dark, cavernous space and you did not know what might lurk within it. The monster in your contracts closet is the risk of compliance problems when you are unaware and not in control of what is there. For many organizations, their contracts situation is, well, a nightmare.

How many active contracts does your company have? Does anyone even know? Many organizations have an idea on the contracts related to the sale of their goods and services or those that go through the procurement process, but what about the numerous other “one-off” contracts that an organization may have? If you know how many there are, do you have a handle on the obligations in those contracts that may be impacted by legislation and regulations such as Safe Harbor, Sarbanes-Oxley, the FCPA or the UK Anti-Bribery Act, or on the record retention requirements related to the contracts? Are you confident that all the new contracts your organization enters into contain the appropriate statutory or regulatory language, and do you have a way of tracking that? Many organizations’ systems and processes simply do not provide the necessary visibility into contractual obligations.

In these days of increased regulatory scrutiny, expansive litigation and regulatory investigations, it is imperative to make sure that your organization’s contracts are in compliance and are being managed effectively. There are two challenges to this effort: locating and evaluating legacy contracts and having a plan for keeping them organized and standardized going forward. Many companies have legacy contracts that may pre-date existing regulations or may have simply slipped through the cracks, and many are not adequately managing their new contracts to ensure they include appropriate clauses and are administered accordingly. This article will discuss the proactive steps an organization can take to get its contracts in order – looking back and going forward: in other words, how to clean out and organize the contracts closet.

Looking Back – Legacy Contracts

The first step in taking control of your contracts is to address your legacy contracts. You will need to identify, collect and usably store legacy agreements and gain insight into their content relating to compliance.

Identifying and collecting contracts can be difficult for some organizations. For many, not all contracts are housed centrally. To continue the analogy, their closet contents may be wedged in a back corner, may have been removed and not rehung or, for some, may even be under the bed. In other words, contracts may be in a variety of departments or locations, even in individuals’ files. They may be stored on hard drives, network drives, software solutions, file shares, etc., and may be stored as text, Word documents, PDFs, images or other formats. There may be multiple versions of a contract in existence and difficulty in identifying the “official” record.

Identification and collection of contracts can be done manually, through painstaking inventories of files and interviews with business units and individuals. This inventory can be done in conjunction with the records and information management (RIM) department. Fortunately, there are also technology solutions that can assist with and accelerate the process of identification and collection.

Once you have confirmed that all active contracts have been identified and collected, you can review them for insight into the relevant obligations as well as the presence and conformity or absence of language required for compliance. At the same time, you can also review for pertinent information such as compliance obligations, expiration or renewal dates, payment terms, volume discounts, etc. In other words, sorting for size and style before storing them in your contracts closet. Depending on the volume of contracts at issue, it can be cost-effective and more efficient to outsource this review, although not all document review providers have the technology-enabled processes and infrastructure exclusively focused on contracts that will allow them to achieve the best outcome. From a compliance perspective, this review will provide knowledge of the overarching standards contained in your contracts as well as any deviations from those standards.

Looking Forward – Contract Management and Contract Creation

To avoid the necessity of repeating this process on a regular basis, you will want a searchable contract repository not only for the legacy contracts, but also for new agreements going forward, and you will want to ensure that the new contracts that are generated meet the organization’s applicable compliance standards.

Contract management technology can provide the ultimate in closet organization for your contracts. Today’s systems and technologies  not only organize and store  contracts in a searchable way, they also  manage the complete life cycle of contract processes – creating, negotiating, drafting, executing and administering the obligations within the contracts. Contract management systems can be integrated into enterprise-wide systems such as email (offering email notices of various triggering events, for example), with document management and records management systems, customer relationship software and, importantly for these purposes, with governance, risk management and compliance (GRC) systems.

In order to prevent having to go through the entire closet-cleaning exercise repeatedly, it is important to create new contracts that comply with the appropriate conventions and to incorporate them into the contracts management program. Drafting can be done through the use of templates, which can be part of the contract management system, or through the use of innovative technology solutions that can create dynamic, custom-built contracts that adhere to the organization’s standards, even for complex agreements.

Conclusion

A holistic contracts management program that includes both legacy and new contracts will banish the compliance monster from your contracts closet. Businesses should expect to have complete visibility of, and control over, the commitments they make – not simply hope that this is the case. A comprehensive program will not only provide peace of mind from a compliance perspective, but also add value to the business as a whole. The ability to effectively manage contracts’ obligations and commitments will allow an organization to extract maximum value from its contracted relationships by avoiding unnecessary costs, maximizing revenue, reducing risk and ensuring effective delivery of contractual obligations.

_____________________________

About the Authors

Jeff Catanzaro’s expertise is in providing legal process outsourcing solutions to corporations and law firms relating to litigation, corporate transactions, contract management, and due diligence. He also has business development, supply chain management and experience building LPO centers in Asia and India.


Tags: Contract Management
Previous Post

Workplace Bullying: From the Playground to the Office and Beyond

Next Post

Machiavelli for Chief Compliance Officers

Robin Snasdell

Robin Snasdell

About the Author Robin Snasdell has a dynamic blend of practical experience in law, business and technology. At Huron Legal, Robin focuses on assisting global companies improve their business performance by providing strategic consulting, process improvement, change management and technology-related solutions to the General Counsel and Chief Compliance Officer.

Related Posts

overwhelming stacks of documents

Why Contract Management Is No Longer Legal’s Problem

by Matt Lhoumeau
June 6, 2025

As companies eliminate dedicated legal departments, contract ownership is shifting to teams that view agreements as business processes, not just...

stacks of papers

Advent of New State Data Privacy Laws Is the Perfect Time to Revisit Your Contracts

by Sarah McAvoy
October 9, 2023

Complying with patchwork of laws creates continual burden

bundle of papers with binder clips

Managing Contracts Good First Step Under EU’s New Sustainability Directive

by Jim Leason and Ossian Nilsson
September 12, 2023

The EU’s updated Corporate Sustainability Reporting Directive (CSRD) went into effect this year, and the first wave of companies covered...

theater marquee showing covid shutdown

Was Covid Pandemic an Act of God? Depends on the Contract.

by Gretchen L. Jankowski and Jacqueline M. Weyand
September 4, 2023

Force majeure provisions in contracts haven’t garnered much attention over the years. But the Covid-19 pandemic appears to have changed...

Next Post
Machiavelli for Chief Compliance Officers

Machiavelli for Chief Compliance Officers

No Result
View All Result

Privacy Policy | AI Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Research
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2025 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
No Result
View All Result
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe

© 2025 Corporate Compliance Insights