CLM 365 Glossary
From the first draft to final approval, this simple guide helps you understand all the key terms in contract lifecycle management.
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Amendment – A small but official change or update made to an existing contract to correct, add, or modify its terms.
Approval Workflow – A structured, step-by-step process that routes a contract through the right people to review and approve it.
Audit Trail – A detailed record that shows who accessed a contract, what actions they took, and when each action occurred.
Assignment – The act of transferring your contractual rights or obligations to another person or company with proper consent.
Authorized Signer – A person who has the legal permission and authority to sign a contract on behalf of an individual or organization.
Auto-Renewal – A contract feature where the agreement renews itself automatically for the next term unless someone cancels it beforehand.
Addendum – An additional document attached to a contract that provides extra information or modifies specific sections without rewriting the entire agreement.
Agreement – A written and mutually accepted understanding between two or more parties outlining their responsibilities and obligations.
Acceptance – The act of formally agreeing to the terms of a contract, usually by signing or confirming approval.
Authoring – The process of creating, drafting, and structuring a contract or document from scratch using standardized templates, clauses, and business rules.
Audit Log – A list that shows every action done in a contract system, in the order of which they happen.
Breach of Contract – When someone does not follow the rules or promises written in a contract.
Benchmarking – Comparing a contract’s performance or process against the best standards or similar contracts.
Binding Agreement – A contract that the law requires all parties to follow once they accept the terms.
Budget Allocation – Deciding how much money will be set aside or approved for a contract or project.
Business Terms – The simple rules in a contract that explain money, timelines, tasks, and responsibilities.
Balance Sheet Impact – How a contract changes or affects a company’s financial statements.
Bid Proposal – A formal written offer to provide goods or services at a specific price.
Buyer – The person or company that is purchasing goods or services under the contract.
Baseline – The starting plan or numbers used to measure progress or compare future results.
Benefits Realization – Checking whether a contract actually delivered the results or value that was expected.
Bilateral Action – An action or decision in a contract that requires agreement or participation from two parties.
Contract – A legal document that explains what each party must do and agree to.
Clause – A small section of a contract that explains one specific rule or condition.
Compliance – Following all the laws, rules, and terms mentioned in a contract.
Counterparty – The other person or company involved in a contract.
Contract Lifecycle – All the steps a contract goes through, from creation to completion or closure.
Contract Repository – A secure digital place where all contracts are stored and managed.
Contract Renewal – Extending a contract for an additional period after the original term ends.
Contract Termination – Officially ending a contract before or at its agreed end date.
Contract Manager – A person responsible for overseeing, managing, and tracking the entire contract process.
Contract Value – The total financial worth or monetary amount of a contract.
Confidentiality Clause – A contract rule that requires certain information to be kept private and secure.
Change Order – A formal request to modify, add, or remove something in an existing contract.
Deliverables – The specific items, services, or results that a party must provide under a contract.
Digital Signature – A secure online method to sign contracts electronically.
Dispute Resolution – The process or method used to solve disagreements between parties in a contract.
Due Diligence – Carefully checking all details and information before signing or approving a contract.
Duration – The total length of time a contract is valid or active.
Draft Contract – The first written version of a contract prepared before final approval or signing.
Delegation – Assigning someone else the responsibility to handle a contract task or duty.
Data Security – Measures taken to protect contract information from unauthorized access or misuse.
Dashboard – A visual screen that shows key contract information and metrics at a glance.
Disclosure – The act of sharing important information as required or allowed by a contract.
Execution – The moment a contract is signed and officially becomes active.
Expiration Date – The specific day when a contract ends.
Escalation Clause – A contract rule that allows prices or fees to increase under certain conditions.
Extension – Adding extra time to a contract beyond its original end date.
Electronic Contract – A contract that is created, signed, and stored digitally.
Engagement Letter – A simple contract that outlines the services to be provided and the responsibilities of each party.
End User – The person or entity that ultimately uses the product or service.
Exclusions – Specific items, services, or responsibilities that are not included in a contract.
Encryption – A way to protect contract data by converting it into unreadable code for security.
Enterprise Contract – A contract designed for the use of an entire company, covering large-scale business needs.
Enterprise Service Agreement (ESA) – A type of enterprise contract that defines the services a company will provide and the terms for delivery.
Enterprise CLM – A Contract Lifecycle Management system designed for large organizations to manage all stages of enterprise contracts digitally.
Force Majeure – A contract rule that protects both parties if something unexpected or uncontrollable happens, like a natural disaster.
Fulfillment – Completing all tasks, deliverables, or obligations promised in a contract.
Financial Terms – The section of a contract that explains all money-related details, such as payments, fees, and costs.
Forecasting – Predicting future needs, costs, or performance related to a contract.
Framework Agreement – A large overarching contract that sets general rules and terms for smaller, related contracts.
Fee Structure – The arrangement or method of how payments will be made under a contract.
Final Approval – The last official sign-off required before a contract becomes fully valid and active.
Franchise Agreement – A contract that allows a franchisee to operate a business using the franchisor’s brand, system, and rules.
Indemnity – A contract rule where one party agrees to protect or compensate the other for certain losses or damages.
Invoice – A bill sent to request payment for goods or services provided under a contract.
Internal Review – A check or evaluation done within a company before approving or signing a contract.
Intellectual Property (IP) – Creative work, inventions, or ideas that are legally owned and protected.
Initial Term – The first agreed-upon time during which a contract is valid.
Implementation Plan – A detailed plan describing how the obligations in a contract will be carried out.
Inspection Clause – A contract section that allows the buyer or party to check the goods or services before acceptance.
Jurisdiction – The place or legal system whose laws will govern and apply to the contract.
Joint Venture Agreement – A contract where two or more companies agree to work together on a specific business project.
Joint Liability Clause – A contract rule stating that two or more parties are equally responsible for certain obligations or losses.
Key Terms – The most important rules, obligations, or clauses inside a contract.
Key Milestones – Specific important events or dates in a contract that must be completed on time.
KPI Clause – A contract section that defines the key performance indicators to measure success.
Liability – The legal responsibility for losses, damages, or obligations under a contract.
License Agreement – A contract that gives permission to use intellectual property, software, or other assets.
Lifecycle Management – The process of handling a contract through all stages, from creation to closure.
Letter of Intent – A preliminary document that shows interest or intent before signing a full contract.
Legal Review – An examination of a contract by lawyers to ensure it meets laws and company policies.
Lease Agreement – A contract that allows one party to rent property, equipment, or other assets from another.
Limitation of Liability – A contract rule that caps the amount a party may have to pay for losses or damages.
Linked Documents – Additional files or documents that are attached to or associated with a contract.
Log History – A record showing all changes, edits, or actions taken on a contract over time.
Master Service Agreement (MSA) – A contract that sets the general rules and terms for future smaller contracts between the same parties.
Milestones – Key steps or events in a contract that indicate progress or completion of work.
Mutual Agreement – When all parties involved formally agree to the same contract terms.
Multi-Year Contract – A contract that remains active and enforceable for several years.
Material Breach – A serious violation of contract terms that can allow the other party to end the contract or seek remedies.
Monitoring and Compliance – The ongoing process of checking that all parties follow contract rules and legal requirements.
Metadata and Tagging – Using labels or data to organize, classify, and track contracts efficiently.
Memorandum of Understanding (MOU) – A non-binding document that outlines mutual intentions before a formal contract is signed.
Negotiation – The process of discussing contract terms until all parties reach agreement.
Non-Disclosure Agreement (NDA) – A contract that requires parties to keep certain information confidential.
Non-Compete Clause – A contract rule that prevents someone from working with competitors for a specified time.
Non-Compliance – Failing to follow the rules or obligations stated in a contract.
Net Payment Terms – The specific timeframe within which payment is due under a contract.
New Supplier Setup – The process of registering a new vendor before signing a contract.
Non-Solicitation Agreement – A contract rule preventing one party from trying to hire or solicit the other party’s employees or clients.
Obligation – A duty or responsibility that a party must fulfill under a contract.
Outsourcing Agreement – A contract where one company hires another to perform work or services.
Offer – A formal proposal made by one party to start a contract.
Operational Risk – Potential problems or issues that may occur while executing a contract.
Order Form – A simple document used to request or purchase goods or services under a contract.
Ownership Rights – The legal rights to control, use, or sell property, work, or assets mentioned in a contract.
Offset Clause – A contract rule that allows payments or debts to be adjusted or balanced between parties.
Order Start Date – The date when the contract or order officially begins and obligations start.
Parties – The people, companies, or groups that enter into and are bound by a contract.
Pricing Model – The method or structure used to calculate payments under a contract.
Performance Review – The process of checking how well a contract is being executed and whether goals are met.
Procurement – The process of buying goods or services using contracts.
Payment Schedule – The plan that shows when and how payments will be made under a contract.
Purchase Order (PO) – A document or small contract used to request or buy specific goods or services.
Platform Access – Permission given to users to access contract management software or systems.
Policy Compliance – Following all company rules, standards, and procedures when executing a contract.
Portfolio Management – Managing multiple contracts together to track performance, risk, and value.
Project Scope – A clear description of all tasks, deliverables, and responsibilities covered by a contract.
Post-Execution Review – The process of checking results, performance, and compliance after a contract has been signed.
Privacy Policy – A document that explains how contract-related data and information will be collected, used, and protected.
Purchasing Contracts – Contracts specifically used for buying goods or services from vendors.
Purpose of Disclosure – The reason for sharing information as required by a contract or legal obligation.
Payment Terms – The conditions in a contract that define when and how payments must be made.
Quote – A price offer given by a supplier or service provider before signing a contract.
Quality Standards – Rules or requirements that define how good the product or service must be under a contract.
Quantifiable Terms – Contract terms that can be measured, tracked, or evaluated objectively.
Qualified Vendor – A supplier or service provider that meets all the requirements and criteria to enter a contract.
Quorum Clause – A contract rule that sets the minimum number of members who must be present for decisions to be valid.
Renewal – Extending a contract to continue for additional time beyond its original end date.
Risk Management – Identifying, assessing, and reducing potential risks in a contract.
Repository – A secure digital storage system where contracts are kept and managed.
Redlining – Marking or tracking changes when editing or reviewing a contract.
Retention Period – The length of time contract records must be stored before disposal.
Request for Proposal (RFP) – A document sent to vendors asking them to submit formal offers for goods or services.
Remediation – Fixing issues or problems found during the contract process.
Responsibilities – The duties or tasks each party must perform under a contract.
Refund Terms – Rules that explain when and how money can be returned under a contract.
Rights & Permissions – The actions or access that each party is allowed under a contract.
Review Cycle – The process or steps followed to check, approve, and finalize a contract.
Risk Assessment – The process of evaluating potential risks associated with a contract.
Request for Information (RFI) – A document sent to vendors to gather information before creating a contract or issuing a proposal.
Signature – Signing a contract to make it legally official and binding.
Service-Level Agreement (SLA) – A contract section that defines the quality and standards of services to be provided.
Scope of Work (SOW) – A detailed list of tasks, responsibilities, and deliverables covered by a contract.
Supplier – The company or party providing goods or services under a contract.
Summary Sheet – A short document that gives an overview of key contract details.
Status Tracker – A tool or system used to monitor and show the progress of contract activities.
Subcontractor – A person or company hired to perform part of the work outlined in a contract.
Standard Terms – General rules and clauses that apply to most contracts.
Security Requirements – Rules or measures to protect contract data and information.
Settlement – An agreement reached to resolve a dispute between parties in a contract.
Special Conditions – Additional rules added to a contract for specific situations or cases.
Signature Workflow – The steps and approvals required to complete contract signing.
Simple Contracts – Basic contracts with minimal clauses used for straightforward agreements.
Subcontractor Agreement – A contract between a main contractor and a subcontractor outlining work and responsibilities.
Sustainability Clause – A contract rule that sets environmental or social responsibility standards for the parties.
Termination – Ending a contract either before its end date or when it naturally expires.
Terms & Conditions – The rules, obligations, and rights written in a contract.
Template – A ready-made contract format that can be reused for similar agreements.
Third-Party Agreement – A contract involving an outside company or organization.
Timeline – The schedule showing important dates and deadlines in a contract.
Transfer of Rights – The act of giving your contractual rights or benefits to another party.
Trigger Event – A specific event that activates a clause or rule in a contract.
Task Assignment – The process of giving specific contract-related tasks to responsible individuals.
Trade Agreement – A contract governing the buying, selling, or exchange of goods or services.
Two-Party Agreement – A contract entered into and binding between only two parties.
Term Sheet – A simple document that summarizes the key points and conditions of a contract.
Third-Party Contracts – Contracts that involve one or more parties outside the main contracting entities.
Urgent Request – A contract task or action that needs to be completed quickly.
Understanding Clause – A contract rule confirming that all parties fully understand and agree to the terms.
Unit Price – The cost assigned to one individual item or service in a contract.
Unilateral Contract – A contract where only one party makes a promise, which the other party accepts by performing an action.
Vendor – A company or party that provides goods or services under a contract.
Version Control – The process of tracking and managing all versions and changes of a contract document.
Virtual Signature – A digital method of signing a contract electronically.
Vendor Evaluation – Assessing a vendor’s performance, reliability, and suitability before or during a contract.
Verification – Confirming that contract information, data, or documents are true and accurate.
Vendor Portal – A digital platform where vendors can access, manage, and track contracts.
Vendor Contracts – Agreements made between a company and its vendors for goods or services.
Vendor Reputation – How reliable and trustworthy a vendor is based on past performance and feedback.
Vendor Management – The process of overseeing, evaluating, and coordinating all vendor relationships and contracts.
Vendor Onboarding – The process of registering, approving, and integrating a new vendor into the company’s systems and contract processes.
Warranty – A promise that a product or service will perform as expected under the contract.
Witness Signature – A person’s signature that confirms other parties have signed a contract correctly.
Work Statement – A clear description of the tasks, responsibilities, and deliverables in a contract.
Written Notice – Important information or communication provided in writing under a contract.
Wet Signature – A handwritten signature made on a physical contract to make it official.
Warranty Types – Different forms of guarantees provided for products or services in a contract.
Warranty Validation – The process of checking and confirming that warranty terms are being met.
Year-End Obligation – Tasks that must be finished before the year ends.
