Regardless of the nature of the transaction, a contract plays a crucial role as the legal foundation for both parties involved. A well-constructed document not only protects the interests of the parties but also clearly defines the terms of collaboration. Learn about the essential elements that every contract should contain and how to manage the flow of these documents within the company.
From this article, you will learn:
Contract – an agreement between two or more parties
According to the definition, a contract or agreement is, under civil law, a mutual understanding between two or more parties that establishes their mutual rights and obligations.
The document should include several important elements that will regulate common issues for the parties entering into the agreement, such as mutual declarations, the responsibility of the parties, the duration of the agreement, and the method of termination.
Key elements of a contract – what must the document contain?
Although not every contract needs to be in writing, this form is still one of the most popular. In the case of written agreements, it is important to remember a few key elements that should be included:
Contract Type – Defining the type of contract is crucial as it determines its content and scope of provisions. This should be stated at the top of the first page of the document.
Date and Place of Agreement – These help in determining the requirements for any potential claims and the statute of limitations for those claims.
Parties to the Contract – This section identifies the entities that are entering into the contract. For individuals, it should include their first name, surname, PESEL number, ID card number, home address, and, if applicable, their role as a representative. For legal entities, the contract should specify the NIP or KRS number, registered office address, method of representation, and the personal details of the representatives.
Declarations of the Parties – This defines the subject of the contract, the obligations, and the rights of the parties. It is a crucial section that should be carefully drafted to avoid any ambiguity regarding the interpretation of the statements and potential issues in enforcing the terms.
Duration of the Contract – The contract may be concluded for a specific period or an indefinite one.
Method of Terminating the Contract – The document should specify how the contract can be terminated, other than by mutual agreement of the parties.
Liability of the Parties – This section outlines the consequences if either party fails to meet the terms of the agreement, allowing the injured party to seek compensation.
Legal Provisions – Relevant legal provisions that apply to the contract can be included in this section.
Final Provisions – These may include the format for submitting statements by the parties, procedures for making changes to the contract, dispute resolution methods, and, in case of legal disputes, the competent court’s jurisdiction, along with other important provisions.
What are the most common problems in managing contracts in a company?
In businesses, a large number of contracts are made. With traditional methods, there is a risk of problems in managing them:
- Excessive time for contract approval – The process of reviewing and approving contracts can take longer than necessary, slowing down operations.
- Loss of contract records – Paper-based or unorganized storage increases the risk of losing important contract details.
- Manual search for information – Searching for specific details within contracts stored in physical files or folders can delay the process.
- Failure to monitor deadlines or conditions – Missing important dates, deadlines, or conditions specified in the contract can lead to penalties or breaches.
- Lack of ability to track the current status of the contract – Without a centralized system, it is difficult to keep track of where a contract stands in terms of execution, approvals, or amendments.
- Loss or damage of the document – Physical documents are prone to being misplaced, lost, or destroyed.
- Low security standards – Paper or poorly secured digital contracts may expose sensitive information to unauthorized access or tampering.
Digital contract management in the V-Desk system
An effective solution to eliminate the above risks is digital contract management within a company.
The contract module in the V-Desk system supports the entire process, from contract preparation, through finalizing agreements and approvals, to the organized storage, registration, and archiving of the document.
Introducing the V-Desk contract flow and archiving allows for more efficient and automated contract management, offering easy access to documents and real-time updates on changes to terms and deadlines. The user gains continuous oversight of the contract status, with the ability to quickly verify information, also thanks to notifications and alerts that can be set for each document.
Additionally, the contract module in the V-Desk system streamlines the work of various departments – such as project teams, legal, and sales – while ensuring a high standard of information security at every stage and protection against accidental damage, loss, or deletion of the document, as well as unauthorized access by third parties.
Safe sharing of contracts in V-Room
V-Room allows the creation of a virtual space for collaboration and document sharing, while maintaining the highest security standards.
This solution is perfect for businesses, offering secure communication between parties who can share confidential documents, make corrections or comments in real-time, track changes in documents, and sign with an electronic certificate.
V-Room is a useful tool in situations such as providing an employee with an employment contract, sending orders to suppliers, dispatching offers or contracts to clients, conducting audits, investor transactions, restructurings, transferring important company documentation, and many others.
