In the US, Texas or New York are largely considered "neutral territory" whereas in Europe, until very recently UK law was considered neutral. I think that may change with the recent political upheaval.

Or try international trade law?

www.jus.uio.no/lm/index.html

In the case of one party proposing Indian law and the other proposing Singapore law, the parties may well choose the law of England and Wales as both Indian law and Singapore law are based upon English and Welsh common law. (Note that there is no such concept as "UK law" as one commentator has suggested below).

However, a party should consider a wide range of factors before proposing a particular governing law and should weigh up the legal and commercial advantages and disadvantages of all the options.

One factor may be the degree of certainty that a contract will be interpreted in a particular way. English law adheres to the doctrine of binding precedence. Some legal systems do not. This could lead to significant uncertainty as to how the law will be applied.

In English law, it may be perceived that the courts allow a greater degree of freedom of contract. Subject to certain exceptions, freedom of contract in English law means that commercial parties are completely free to make disastrous bargains. This illustrates the comparative reluctance of the English courts to interfere on policy or other grounds to rewrite the parties' contracts for them.

For example, in English law it is possible, provided very clear wording is used, to include an exclusion clause that excludes any and all liability whatsoever, even for a deliberate breach of contract. And there is still no recognition of a duty of good faith being applied generally to commercial agreements (but watch this space!). This may or may not be an advantage to you but it remains the case that the courts are likely to give effect to the wording of the contract without imposing their opinions as to what does or does not amount to good faith.


And you may wish to consider the approach of a particular legal system to particular clauses.

For example, in English law, a liquidated damages clause will be subject to the clarification set out recently by the Supreme Court with a subsequent judgment, applying that test, indicating that a freely-negotiated LD clause is likely to be upheld subject to the requirements set out by the Supreme Court. Under UAE law, such a provision would be subject to Article 390(2) of the Civil Code and either party may apply to the court to adjust the agreed amount of compensation so it is equal to the loss. If Indian law were to apply, we would have to consider the effect of section 74 of the Indian Contracts Act 1872.

English law will also recognise an asymmetric jurisdiction clause.

And it may be that the choice of law clause will be reflected in the choice of jurisdiction. So, English law and the English courts. If the choice of courts is to reflect the choice of law, it may well be the consideration should be given to the efficacy of the court system and the technical expertise and other qualities of the judges.

Lots to consider.

In terms of the 8 different payment schemes I was specifically referring to what we call 'payment curves' (see attached graphic) as opposed to payment regimes such as cost+ (time and material), fixed price, cost + fixed fee, etc. In this light these are grouped into 5 main families with a couple of variations inside each. These are as follows:

- 'all or none' payment curves
- Linear payment curves
- Non-linear payment curves
- Alternative payment such as demerit point and visual payment curves
- Matrix payment curves

The intent of this discussion is to simply highlight that the choice of payment curve, similar to the choice of performance measure and level, can have a significant impact on the success (or otherwise) of the overall performance management framework. My blog (www.performancebasedcontracting.com) has 3 posts specifically on this topic including the graphics.

I hope this helps and answers your questions. However, please let me know if you have any further questions.

Hi Mark, Happy to discuss. Send me an email via marie.cullen@medibank.com.au and I can talk about the principles I use.

In my view I don't believe, as a community, we have fully bottomed out all the risks associated with these types of engagement.

M

Hi Mark
For a very good, concise review of the principles and issues of cloud agreements generally, covering most of your points above (my view anyway), you might also check out David W. Tollen's book "The Tech Contracts Handbook" online or via this website:

techcontracts.com/2018/06/01/dont-use-licenses-saas-contracts/

I did buy his book, and think highly of it. Notably good balance between concept and practical drafting approaches, not just for cloud matters either.


NB: Personal opinion only, not necessarily that of my employer.

kind regards
Andrew

Hi Greg,

Having co-led the introduction of Relational Contracting into the Australian Department of Defence, where it is known as Collaborative Contracting, since mid 2013 with the help of IACCM I wanted to add my thoughts on your question. For the record we were lucky enough to have Jim Bergman help us on our journey!

In terms of 'Does Relational Contracting require long term commitment over multiple contracts for the parties to realize the benefits?'. Simply put, no it does not. A single contract can absolutely benefit from a relational approach, especially where there is a high level of uncertainty about main elements of the contract such as scope, performance, schedule and of course price. A relational approach allows both parties to work together collaboratively to evolve the solution, noting it could be a novel solution that has not been used before. For example, in the Australian Department of Defence we have a number of contracts where we are either the largest user in the world or the first user, which necessitates a degree of flexibility in the commercial structure since the uncertainty and risk is high. Both parties have to work in good faith to deliver the enterprise outcome to Defence. The relational contracting approach provides a commercial architecture within the contract to allow both buyer and seller to have these discussions without reverting to tightly fought commercial structures.

That said, I do believe that in large organisations such as the Australian Department of Defence, there should be levels of a relational contracting approach. For example, at the contract level, even for multi-party contracts, we'll use a Collaborative Contracting approach. However, when we combine multiple contracts with a single seller, we can then combine these relationships as a part of a Supplier Relationship Management (SRM) approach to vendor management across a program or portfolio of contracts. Again, Jim assisted us with this, although we are still on the SRM journey.

In terms of 'How do we ensure that the benefits (price competitiveness, quality of service, innovation etc.) that can also accrue from competitive sourcing are not lost?'. The Australian Department of Defence has been using Performance Based Contracts (PBCs) since 2005 to ensure both short-term and long-term benefits are being realised. In 2012 we started using what we refer to as Generation 3 PBCs which includes enterprise performance and enterprise behaviours (relational) within the performance measurement framework linked to both commercial consequences, both positive and negative. In this case, we typically use incentives such as contact extensions, sometimes known as rolling wave or award term contracts, to ensure the seller is maintaining the long-term behaviours you described. You can get more information on these type of performance based contracts at my blog at www.performancebasedcontracting.com.

Finally, to assist with the successful implementation of Collaborative Contracting into our commercial functions we developed and released on 28 September 2018 a Collaborative Contracting Better Practice Guide a copy of which you can get from the following link www.defence.gov.au/casg/Multimedia/Collaborative_Contracting_Better_Practice_Guide-9-8860.pdf.

Anyway, I hope this helps. And of course, as part of the IACCM Australia New Zealand Advisory board and an IACCM Fellow I would be happy to answer any further questions.

Hi Alexander, can you explain what you are looking for with a little more detail? Which report are you looking for?

Hi Eileen, happy to share some evaluation work we did with one of the big 4 consultancy firms here in the UK. Essentially the evaluation was based on the idea of core CLM and its functionality, not being able to capture in real time through dashboards how a contract is performing, and how you could capture contract specific data from IoT sensors, mobile devices and tablets and to what extent this could then drive operational performance of those contracts during their lifetime. We are contract data specialists and have built a data driven contract intelligence platform but the work was based on experiences working with complex contracts in global supply chains and is a relatively good read

Hi Eileen, have you heard of Seal Software? Seal can find and centrilize all your contracts for you, bringing them all together in one repository. It can then analyse and extract necessary information and key terms from the document, identify standard and non standard clauses, and alert you to important information such as contract end dates. See www.seal-software.com for some more info or give us a call on 1 650 938 7325 if you want to learn more. Good luck in your search!

Eileen, Hi there. Did you manage to get your spreadsheet? If so I would be keen to see, or hear from you as to your experience. Matt

Eileen,

When you go to the conference you will be able to talk with a lot of the software providers. You will find that they specialize in various aspects of contracting. Sorry providers but, Eileen, remember you are talking to sales people.

Over the course of my career (I'm now semi-retired) I have selected, configured and implemented 5 software CM systems. Picking your system provider is no different than picking any other contractor/vendor for your company. The difficulty for a lot of CM people in this particular process is they have trouble taking on the usual client role. What is your scope of work/services you want. In my last system acquisition we spent 3 months developing our needs criteria. We wound up with over 250 system requirements and developed 9 application cases. We evaluated what we're wants and what we're musts. These musts (~15) formed the basis of our EOI/RFI which we sent out to ~22 system providers. The results of this gave us a bidders slate of 8 system providers. For our RFX we also had 22 process flows done.
One very important question for your company ...... do you want your processes to change to what the system will do or do you want the system to be configurable to your processes? Very key question.
If you want to know more let me know.

Jim

It is a good topic to talk about. I struggle with what metrics to report on. It only takes one bad contract to cost the organization lots of money but it is hard for people to grasp it. How do you report on that? Currently, I report on the number of contracts the organization has and the amount of money expected to spend under a contract. Cost savings and cost avoidance is reported by my department through our category managers. I believe the category managers take the first offer from a vendor and then subtract the final number after negotiations to calculate cost avoidance. Cost savings is calculated if the organization will contractually pay less under this contract than it historically has for that same commodity. These definitions were agreed to by both our CFO and our Director.

Patrick, are you familiar with IACCM's "10 Pitfalls" research? This study looks at the top value erosion areas. Flip the erosion perspective and you'll quickly find key areas where by improving your capabilities you will improve ROI. Please reach out to me if you wish to discuss this in detail.

Regards,
Katherine

Katherine,

Thank you for the excellent recommendation. I've reviewed the research in the "10 Pitfalls" and it has provided me with concepts that I will research further internally.

Patrick, in addition to this first part of the "ROI of Contract Management", I'd also recommend to continue reading Tim's part two of that blog: blog.iaccm.com/commitment-matters-tim-cummins-blog/the-roi-of-contract-management-part-2
You may have already read how the article describes how the Contract Management role has evolved. Now, in this new section, you will have the chance to identify the benefits that can be achieved when creating and demonstrating value from such a role.
Regards,
Pablo

This is a very hot current topic amongst members around the world. I am looking forward to seeing what members have to say. I agree with the comment below about starting by having a clear understanding of the performance and outcome you are wanting. That will not always be obvious. A system that captures data that demonstrates the value delivered by the CM/Legal Functions might be a good discussion topic.

Depending on your desired functionality, you may want to look at DealSafe.co - it's a newer solution, but is quite flexible and also comes with experts to extract key terms from your contract right into their databases. They are invite only right now, apply at DealSafe.co

Your choice of solution really depends on what you are looking for. Merrill DataSite offers a flexible and customisable solution - feel free to get in touch if you would like to learn more.

I would concur with the other comments about first understanding what your needs are before talking to any of the CLM providers in the marketplace. You will find that the 20 CLM providers (including my employer, Symfact Inc.) on the IACCM website are a pretty good representation of what's available in the marketplace. However, you need to be aware that each of these vendors-including Symfact-perform certain functions better than other functions. So it is important for you to do some screening based on your corporate and organizational needs. I have provided a list items below that you may want to consider as functional/operational requirements for your organization. This certainly may not be an all-encompassing list, they are just the ones that off the top of my head, but it certainly is good start for you to perhaps use.
You could consider sending out this list to the vendors that are in the IACCM Service Directory list and get them to provide you with a sentence or two on each item. Also ask them to list the top five items that they do best and then compare their top five items to the top five requirements (don't initially disclose this to the vendors) that you have/need. By taking this approach you will be better able to create a shortlist of vendors that are geared toward your needs. From there you can these shortlisted vendors have them provide a demonstration of their system so that you can see it in action performing the tasks that you need to effectively manage your contracting process.
List of requirements to consider:
- Contract authoring: do you use a library of clauses and templates as well as third party paper or do you simply want to attach a completed agreement onto a Contract Record? Also, look at what version of MS Word is used internally by contract authors.
- Version control: is it important to maintain the versions of the contract as you go through the internal collaboration and the external negotiation of the agreement?
- Workflow: do you have approval workflows that are based corporate policies and procedures or perhaps based specific business rules such as monetary value, contract type, location, etc.?
- Infrastructure: are you looking for hosted or an on-premise installation?
- Technology: do you have any corporate architectural standards (i.e. database or platforms) that need to be adhered to?
- Integrations: do you need to integrate to your CRM, ERP, AD, SSO, or other line of business system?
- Licensing: do you have a preference or need for an annual license (operational expense) versus a perpetual license (capital expense)?
- E-Signature: is this something you may need now or want to have available for the future?
- Data conversion: do you want to migrate you existing contracts (data and documents) to the new system?
- Request forms or wizards: is this something you need to start the contract process?
- Contract Types: what types of contracts do you want to manage: buy-side, sell-side, non-monetary, etc.? For data you wish to track, how much does it vary by Contract Type?
- Tracking: do you need to track financials (spend and/or revenue), commitments, performance or KPI's, etc.?
- System configurability: are you looking for an out of the box tool or one that can adapt to your needs over time?
- Users: Based on your various system users, how much control do you need over who can read and/or modify information across the system?
- Obligations: do you need to link specific text in the contract to an identifiable obligation that is actively managed during the life of the contract?
- Clause Tracking: is there a desire to track the degree of change that you standard clauses undergo?
- Related agreements: is there a need to see what amendments, SOW's, Task Orders, or other types of subcontracts are linked or related to an agreement?
- Searching: what are your searching and reporting needs? Do you need full-text searching?
- Repository only: are you looking for a simple repository that contracts can be loaded into?
- Remote access: do you need to access contract data via mobile devices? If so, what kind of data would need to be accessed?
- Multi-language/multi-currency: will the system be used in different parts of the world?
- Security: what type of user access and permission controls do you need?
- Governance: are there other governance or compliance items that are important to your organization?

Important point to consider is why you are in the market for an external solution. Is the focus primarily for the professional's benefit, are you trying to manage teams or processes, performance of data analysis, compliance, etc. As a user of Selectica, I find the data input a bit time consuming, burdensome, and of pretty limited value in the creation of terms that are often somewhat standardized for many services. From a management view, it is a rare organization that has the time to carefully analyze and assess data, so there may be value, but time is the limiting factor. Anyway, it depends on what you think you want to achieve.

I'll throw it out there again, but DealSafe.co automatically uploads key terms for you. Let's you create very flexible reports, so you can manage the large number of demands you have from your deals.

Hi,

I trust you are doing fine.We would be happy,if you could share your email & we would be glad to demonstrate our solution.

Regards,
Rashid

Hi Rashid, I would be interested. Best. John
jmfoxjr [at] gmail .com

Thank you for all the responses. Dan - very helpful in articulating and dialing in on some of our requirements.

SAP (Ariba); IBM (Emptoris), Upside, 8over8 (Procon); Contiki... all other alternatives. Depending on the main drivers each of these or other solutions may be the best for your need. It's critical that you understand the pros/cons of each solution. There are a lot of offerings in this space; the right fit for one company/industry may be a horrible choice for a different company.

Hi all,
Do anyone knows which software has a good authoring and clause library functionality? We are looking for a pretty robust system, which we are able to work with legacy contract and manages complex clauses conditions.

Thanks,
Liane

Hello Liane, Symfact does have a very robust tool for contract authoring. Directly from MS Word you can easily search for clauses contained in the Clause Library, Template Library, or in legacy contracts and copy them into a new contract. Symfact also has some very configurable tools to tag and track specific components of a clause (i.e. textual, compliance, financial, obligations, etc.)that you need to manage. If you would like to learn more about what we have to offer please contact me at dan.townsend@symfact.com.
Thank you.

In 2015, Agiloft won the Editors' Choice award for best contract management software from PC Magazine.
Read pros and cons at blog.whatasoftware.com/contract-management-software-agiloft-contract-management-suite/

Dan's comments below are on the mark. With a clear understanding of your own needs, you can align with the provider that delivers the most value. I was involved with a detailed selection process, then followed through with the implementation on Selectica. Aptus was a close second. Getting the right support team in place (internal and vendor) will prove invaluable in the long run.

Implemented DealSafe.co - very easy to use, lots of reporting functionality, they even provide paralegals to do the contract data extraction and metadata work. Highly recommend

The suppliers on your list offer quite varied solutions, so I wonder what your real requirements are? From my experience, Selectica and Novatus are probably the most 'sophisticated' in terms of functionality, which is good if you see your requirements expanding over time.