Contract management is an industry unto itself because contracts are enormously complex. Their assorted terms can make them seem like a foreign language to the unpracticed eye. Furthermore, there are separate contracts for each division of a company or organization. To name just several types, there are employee contracts, confidentiality contracts, intellectual-property contracts, vendor contracts, and financial contracts. Even after contract managers successfully interpret the meaning of a contract, they face the difficult process of enforcing them.
This contract-execution process creates the need for contract management jobs. A contract manager strives to interpret contracts to his or her staff and to abide by the contract's terms at all times. These managers are well-trained in a contract's specialized terminology for their field. For instance, a contract manager working in health insurance would know the meanings of words like ''per diem'' and ''case rate.'' The same is true for a labor-relations contract manager who is trained in labor-union contracts, payroll benefits, and conflicts arbitration. In fact, many contract managers are lawyers who have received intensive training in industry-specific contracts.
Contract managers recognize that contracts are tools for optimizing business function and organization. Contracts also act as risk-management tools because they attempt to realize company objectives while staying within budget parameters. While consulting with company managers, contract managers write contracts that stipulate operating costs, compliance regulations, and business restrictions. Once they finish writing contracts, they maintain them in easily accessible locations so they can be presented in case of business disputes. If, in response to a dispute, a business fails to locate a corresponding contract, the business may face litigation by clients or government authorities. This is especially commonplace for insurance claims processors, who discern true insurance claims from false ones. Therefore, it is equally important that contracts not only set clear policies, but that they are readily accessible to company managers in case of outside investigation.
Oftentimes, contract managers draft contracts relating to company vendors who supply equipment and goods to a company. These contracts are examples of purchasing contracts, which determine the supplier's selling of products and services to a customer. These contracts detail the terms of delivery and payment between the two parties. If either of these two parties fails to abide by these terms, the other party may sue them for breach of contract. This example illustrates how contract managers must draft contracts as clearly as possible to avoid litigation. Contracts are legally binding agreements, and the risks of ignoring contract stipulations or writing vague stipulations are serious.
Another common type of contract is a sales contract. For this contract, the sales representative and the customer sign a contract outlining the terms of a company's selling products or services to that customer. For instance, a car salesperson will present this contract to a car purchaser. The purchaser will examine the terms of payment that both he and the salesperson have agreed on, and will sign the contract. The purchaser is then legally bound to make the agreed-on payments to the car dealership in return for buying or leasing the car.
Contracts proliferate in global corporations. In fact, the average corporation has about 40,000 active contracts. The sheer number demonstrates why contract managers are so essential to sound contract processing. Moreover, a great number of companies are implementing contract-management software to organize each contract into a company-wide database. Examples of this software include Contract Logix, Contract Advantage, and Contract Assistant, This type of software is quickly becoming one of the most abundant on the market. Each program typically has an online filing system, contract templates, compliance information, deliverables tracking, contract calendars, and budget-analysis tools. These programs are usually operable on Microsoft programs and are quite simple to learn.
Contracts are essential to contract project management jobs. Contract project managers consult with project managers and write contracts stating a project's goals, employee duties, deadlines, budget allowance, and final objectives. The actual project managers refer to it time and again in order to remind themselves of the original goals and restrictions. They may refer to it many times during the typically long duration of a new project. Many industries use these project-management contracts, especially construction industries such as architecture, engineering, and general contracting. In these large-scale operations, project-management contracts prevent budgetary inflation's and confusion of job duties. As always, project managers stay attuned to any potential contract infringements that may trigger dire consequences for the company.
Many corporations directly employ contract managers as on-site workers, though many contract manager jobs are at contract-services firms. With either employer they often specialize in a certain type of contract and are one of many contract managers on staff. For instance, a corporation may hire sales, human-resources, and purchasing contract managers who have solid training in those respective fields. Contract managers also usually specialize in a certain industry such as construction, energy systems, healthcare, or law.
