Contract Playbook: What is it and Why is it important

In this guide, we'll learn what are contract playbooks, why they are important, and how they are created.

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A contract playbook is a type of manual for contract review and negotiation and sets out the important terms, processes, and exception definitions per contract type for a company. In its simplest form, a playbook can be a single document outlining all policies related to commercial negotiations for a company

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Playbooks drive consistency and speed of outcomes in contract negotiations

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It defines the scope of action per contract topic and provides the “must haves” and “deal breakers”. There is clear guidance on risk thresholds acceptable for each area. Organizations also add explanations for each clause, which can be used as argumentation in contract negotiations. Consistency during negotiations drives down the contract risks of arbitrary or half-baked approaches.

There are two key components of a playbook - a Clause Library and a Review Checklist, which deserve a separate post of their own each (coming soon). The process of creating a playbook usually begins with gathering all key stakeholders in a short workshop, focused on starting with 1 or 2 frequently negotiated areas. A rich discussion requires a diversity of participants, the use of company templates, and a case study style of workshop. Once the initial discovery and design are done, it is usually a good practice to perform a dry run on 3rd party paper. Change management and implementation of technology, so that the playbooks are well integrated into your process and adopted by staff.

Which teams use these playbooks?

• Legal (Internal and external teams)
• Contract Management / Administration
• Sales
• Operations / Project Management
• Sourcing / Procurement
• Compliance

What is a Digital Playbook?

Digitizing a playbook broadly refers to adding playbook templates, rules, exceptions, and other details to an online system. A centralized system to host your playbook is very effective, as it can be constantly updated as the org learns from new experiences every day.

Most importantly, a digital playbook can be well integrated with your contract review, negotiations, and post-signature management systems effectively.

How can ContractKen help you in designing contract playbooks?

At ContractKen, our experts have conducted these workshops with several clients and helped them assess, design, implement and enforce robust playbooks.

Do you wish to assess and evaluate your playbooks against industry benchmarks?

Email us at hello@contractken.com to set up a remote assessment of your contract playbook or better learn from industry best practices.

Further Readings:

• https://www.contractken.com/post/clause-library
• https://www.contractken.com/post/contract-language
• https://www.contractken.com/playbooks