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