2Creating a Procurement Contract

This chapter contains the following:

Oracle Enterprise Contracts provides the most complete solution for managing sales, procurement, and other contracts. It is a comprehensive offering for standardizing corporate contract policies, improving internal controls, and complying with all contractual obligations and regulatory requirements.

Summary of Features

The key features of Enterprise Contracts include the following:

  • Standardize the contract process

  • Accelerate contract renewal cycles

  • Improve visibility and drive contract compliance

Standardize the Contract Process

With Enterprise Contracts, companies can implement contract best practices with standard templates, clauses, and contract policy rules that can be enforced enterprise-wide. Global organizations can establish company-wide standards that can be adopted and tailored by regional administrators to comply with local or country-specific regulations.

Contract administrators and legal personnel may author and negotiate many complex contracts each year. Oracle Enterprise Contracts simplifies the process by allowing contract administrators to maintain a central library of standard clauses, contract templates, and policy rules across the enterprise. Contract templates enable rapid assembly and creation of contracts by providing standard contract boilerplate language for each type of sale or procurement. Policy rules specify which clauses are mandatory for a contract or protected against updates during negotiation.

Accelerate Contract and Renewal Cycles

The Contract Expert feature guides users through a questionnaire. Based on the user's responses and other negotiated business terms, such as products, prices, and contract amount, Contract Expert adds any required clauses. Standards-based contracts can be generated, reviewed, and approved with little or no legal supervision. Users can print the contract as a PDF document for signature. The application also enforces contract policy controls to prevent unauthorized modifications. Contract collaboration and negotiation is streamlined using the two-way integration with Microsoft Word. The change tracking in Microsoft Word enables the contract administrator, legal department, or the external party to make changes offline. The document is synchronized with the structured contract terms stored in the application.

Improve Visibility and Drive Contract Compliance

A single view of all enterprise contracts is essential for effective management of contract activities and for reporting and analysis of outstanding supplier, customer, and partner commitments. Contracts enables contract professionals to search and view all contracts from a single location. The text-based search engine can combine keyword searches with structured information like contract dates or amounts. Therefore, the text-based search engine provides unprecedented access to contracts for all key stakeholders. The Contracts Dashboard provides a snapshot of all contract-related activities, including deliverables progress, approvals, and contracts that need attention.

How You Author a Procurement Contract

This topic explains the process of authoring a supplier contract by selecting the Create Contract task in the Contracts work area.

The following figure outlines the process described in the sections of this topic.

  1. In the Create Contract window, you enter the basic information required to create the supplier contract.

    Selecting the contract type determines what additional information you can enter.

  2. The application creates the enterprise contract and displays it for you to edit.

  3. Enter additional contract details.

  4. Depending on the contract type, you can:

    • Add contract lines.

    • Author contract terms and review contract deviations..

    • Create contract fulfillment.

    • Select the determinant level for autonumbering a contract.

    • Designate contacts as signers on the contract.

  5. Validate the contract and correct any errors.

  6. Submit contract for approval.

This figure outlines the process for authoring a supplier
contract.

Entering Basic Contract Information

In the Create Contract window, you enter the basic information required by the application to create the contract. This includes:

  • Business Unit

    The business unit where you are creating the contract. Selecting the business unit determines what contract types you can select. If your contract is not project-based, you can also select a business unit with no assigned ledger or legal entity.

  • Legal Entity

    The internal legal entity entering into the contract. This is required only for project-based contracts.

  • Type

    Contract type.

  • Primary Party

    The primary supplier entering into the contract.

  • Contract start and end dates

  • Contract Currency

  • Authoring Party

    Select Internal if your organization is authoring the contract. Select External if the supplier is providing the contract which you want to attach.

Depending on the business unit and contract type you selected, you may also be asked to enter:

  • Number

    This field appears only if you are required to enter the contract number manually. The number you enter can include any alphanumeric characters and must be unique.

  • Item Master

    If your contract includes contract lines then you may be asked to enter the item master inventory organization that will be used to select the items you are purchasing.

Note: You cannot change the business unit, the legal entity, the contract type, and the contract number after the contract is created.

Adding Contract Information to the Contract Header

On the contract Header tab, add additional information depending on the contract type you selected. This may include:

  • Additional contract parties and contacts

  • Information about possible contract risks and their probability

  • Contract documents

  • List of related contracts

  • Notes

Adding Contract Lines

If the Lines tab is visible, add contract lines to specify the items you are purchasing. Depending on the contract type, you may be able to enter one or both of the following types of lines:

  • Item

    For purchasing items tracked in inventory based on the item master entered in the contract.

  • Free form

    For purchasing items that are not tracked in inventory.

Authoring Contract Terms

If the Contract Terms tab is visible, you can add and edit contract terms and conditions.

Just what actions you can take during contract terms authoring depends on your implementation, your privileges, and contract type. Some contracts may have their contract terms already populated from a contract terms template and permit you only to add and delete clauses from the Contract Terms Library. Other contracts may allow you to create nonstandard clauses or require you to answer questions to determine if additional clauses are required. For some contracts, you may attach the contract terms in a separate document and not use the authoring capabilities of the application at all.

If you do author contract terms for your contract, select the Review Contract Deviations action on the Contract Terms tab to determine if your contract deviates from your company standards. You can add any explanations for the deviations in the report which can be attached to the notification sent to the contract approvers.

Creating Contract Fulfillment Lines

You can create contract fulfillment lines if the Fulfillment tab is visible.

Contract fulfillment lines make it possible for you to track goods, services, reports, and other fulfillment items you are purchasing. Depending on the type of contract you are creating, you can use contract fulfillment lines to initiate the creation purchase orders or purchase agreements within Oracle Fusion Purchasing or in other integrated purchasing applications and monitor their execution from within the contract. The contract must be active before you can initiate the creation of the purchasing documents.

You can create contract fulfillment lines on the Fulfillment tab or you can automatically create fulfillment lines prepopulated with the information in the contract by selecting the Autocreate Fulfillment Lines action from the Actions menu at the contract level or on the Lines tab. See related topics for more details.

Validating and Submitting the Contract for Approval

The contract must pass validation before it is sent for approval. To validate the contract, select Validate from the Actions menu. Clicking the Submit button to submit the contract for approval also triggers the same validation process. You must fix all errors for the contract to pass validation. Resolving warnings is optional.

A contract typically moves through a variety of states throughout its life cycle, from initial drafting to negotiation to active management and eventually to contract closeout. A contract status indicates where a contract is in its life cycle, and also determines what actions and operations are permitted for the contract.

Some of the actions available for a contract have no effect on the status of the contract. These actions are:

  • Preview: Displays contract with terms and conditions in PDF format.

  • Validate: Displays errors and warnings, if any.

  • Duplicate: Creates a new contract in Draft status with a new number for which you can select to retain dates, primary and other party information, contract terms, notes, and contract line information from the original contract.

  • Save as Contract Template: Creates a new contract template in Draft status with the same attributes as that of the contract.

  • Delete: Removes the contract.

  • Edit Contract in Wizard: Enables you to use the Wizard to upload documents and enter contract details such as contract terms template, variable values, and answers to questions before approving and signing the contract. This action is therefore available only in Draft and Under Amendment contracts.

  • Autocreate Fulfillment Lines: Creates fulfillment lines for buy intent contracts.

  • Track Completion: For sell intent contracts with lines, tracks percent complete for the project at line level.

Note: Contract statuses are predefined and you cannot define new statuses. However, you can define user statuses and their transitions and use them, for example, to pass the contract from one team to another for review before submitting the contract for approval.

The following table describes the available contract statuses and lists those permitted actions for each status that cause a change in contract status:

Status Description Available Actions and Resulting Statuses

Draft

The initial status of a contract

  • Cancel

    Resulting status: Canceled

  • Submit for Approval

    Resulting status: Pending approval

  • Create New Version

    Resulting status: Draft

    When a contract is in Draft status and a new version of it is created, this new version will also be in Draft status.

Canceled

The status of a contract changes to Canceled when the draft is canceled.

There is no action available that changes the status of the contract.

Pending approval

The status of a contract changes to Pending approval when it is submitted for internal approval.

  • Stop Approval

    Resulting Status: Draft

    The contract is withdrawn from approval. You can now make corrections to the contract and resubmit it for approval.

  • Stop Approval

    Resulting Status: Under amendment

    The current contract is in Under amendment status if it has an earlier active version.

  • Approve

    Resulting status: Active

    If, based on the contract type, signature is not required for acceptance, and all approvers have approved.

  • Approve

    Resulting status: Pending signature

    If, based on the contract type, signature is required for acceptance.

  • Approve

    Resulting status: Hold

    When a contract is approved, if there is an existing Hold on it with Hold date later than the system date, its status changes to Hold.

  • Reject

    Resulting status: Draft

    When one or more approvers do not approve the contract.

  • Reject

    Resulting status: Under amendment

    This status results when one or more approvers do not approve the contract and the contract has a previous active version.

Note: The Approve and Reject actions are available from the approval workflow notification.

Pending signature

The status of a contract changes to Pending signature when it is internally approved by all approvers but is pending customer or supplier acceptance. Acceptance can be by manual or electronic signature.

  • Sign Contract

    Resulting status: Active

    If manual signature is required for acceptance, then clicking on this action displays the Accept Contract page where designated signers enter their name and date of acceptance.

  • Sign Contract

    Resulting status: Sent for signature

    If electronic signature is required for acceptance, then this action displays the integrated Sign Contract page. On this page, the sender must click on Send to send the contract for electronic signature to the designated signers.

  • Sign Contract

    Resulting status: Hold

    When a contract is accepted, if there is an existing Hold on it with Hold date later than system date, its status changes to Hold.

  • Sign Contract

    Resulting status: Expired

    Sign Contract can go straight to Expired if the end date has been reached.

  • Create New Version

    • Resulting status: Draft

      When a contract is pending signature, if a new version of it is created, this new version is in Draft status.

    • Resulting status: Under amendment

      If the original contract pending signature was under amendment, the new version will also be in Under amendment status.

  • Cancel

    Resulting status: Canceled

Sent for signature

The status of a contract changes to Sent for signature when the contract is sent for signature using the integrated electronic signature solution.

  • Manage Signatures

  • No resulting status

    If the sender corrects the envelope and resends it for signature.

  • Resulting status: Pending signature

    If the signer declines to sign or the sender voids the envelope.

  • Resulting status: Active

    If all the signers sign the contract.

Active

If the contract does not require signature for acceptance, then the status of the contract changes to Active when it is approved by all the approvers. If the contract requires signature for acceptance, then the status of the contract changes to Active only when it is approved by all the approvers and signed by all the signers.

  • Amend

    Resulting status: Under amendment

    Enables you to make changes to the contract and resubmit it for approval.

  • Apply Hold

    Resulting status: Hold

  • Close (Terminate)

    Resulting status: Closed

    This contract is no longer available except from contract history.

Hold

The status of a contract changes to Hold when a hold is applied.

  • The Update Contract Status process will ignore contracts or contract lines on hold and will not change them to the Expired status.

  • Amend

    Resulting status: Under amendment

    Enables you to make changes to the contract and resubmit it for approval.

  • Remove Hold

    Resulting status: Active if prior to end date. otherwise the status will be Expired.

  • Close (Terminate)

    Resulting status: Closed

    This contract is no longer available except from contract history.

Under amendment

The status of a contract changes to Under amendment when it is amended.

  • Submit for Approval

    Resulting status: Pending approval

  • Revert

    Resulting status: Active

    The status of a contract under amendment changes to Active if the latest changes are canceled by reverting. The contract returns to its state prior to its amendment.

  • Create New Version

    Resulting status: Under amendment

    When a contract is in Under amendment status and a new version of it is created, this new version will also be in Under amendment status.

Closed

The status of a contract changes to Closed when you close (terminate) it. Closed status implies either a foreclosure or a closeout after expiration.

  • Reopen

    Resulting status: Draft

    Makes this contract available for corrections and resubmission for approval.

Expired

The status of a contract changes to Expired when its end date is reached.

  • Amend

    Resulting status: Under amendment

    Opens the contract for corrections and before resubmitting for approval.

  • Apply Hold

    Resulting status: Hold

  • Close

    Resulting status: Closed

    Resulting status: Closed This contract is no longer available except from contract history.

Tip: When the contract end date is reached and the contract status is Active, the Update Contract Status concurrent program changes the contract status to Expired.

The following figure shows a contract flow from draft to approval to acceptance.

Contract approval and acceptance flow

The following figure shows contract amendment, contract delete, and contract hold flows.

Contract amendment, contract delete, and contract
hold flows

You can select the Create Contract in Wizard and Edit Contract in Wizard tasks to quickly author enterprise contracts using a guided process.

The Contract Wizard guided process is based on the origin of the contract terms. If the contract terms originate internally in your organization, then you add the contract terms by applying a contract terms template. If the contract terms originate from an external party such as a supplier, then you upload the file containing the contract terms because the contract terms are authored outside the application.

The following figure outlines how Contract Wizard guides you to create a contract where the contract terms originate with an internal party:

  1. You select Internal as the authoring party and enter basic contract information on the Create Contract window.

  2. The application displays the page of the Contract Wizard where you can select and preview the contract terms template you want to use. Depending on the setup, the application may recommend the template or let you select one of your own.

  3. Depending on the business rules set up for the selected template, you may be required to enter values for contract variables (Step 3) and to answer questions (Step 4). These steps are the equivalent of running the Contract Expert. On this figure, they are outlined in dashed lines.

  4. Based on your entries in Steps 3 and 4, the application may insert additional clauses into the contract terms.

  5. You may upload supporting documents.

  6. You may preview the contract terms, including any additional clauses inserted by the application.

  7. If you are satisfied, click Submit on the Review Contract page to validate the contract. If there are no validation errors, the contract is submitted for approval.

  8. If you want to make changes, instead of submitting, save and do one of the following: select the Edit Contract in Wizard action to revise what you entered in the wizard or select the Edit Contract action if you want to add contract lines and other details or edit the contract terms.

    The following figure outlines the contract authoring process using the Contract Wizard for an internal party.

This figure outlines the contract authoring process using
the Contract Wizard for an internal party.

Here is how Contract Wizard guides you to create a contract with contract terms that an external party supplies in a file:

  1. You select External as the authoring party and enter basic contract information on the Create Contract window.

  2. You upload the file containing the contract terms as the primary contract document and any other supporting documents.

  3. You review the contract information.

  4. If you are satisfied, you click Submit on the Review Contract page to validate the contract. If there are no validation errors, the contract is submitted for approval.

  5. If you want to make changes, save the contract and either select the Edit Contract in Wizard action to revise what you entered in the wizard or select the Edit Contract action if you need to add contract lines and other details.

    The following figure outlines the contract authoring process using the Contract Wizard for an external party.

This figure outlines the contract authoring process using
the Contract Wizard for an external party.

Entering Basic Contract Information

To create the contract, you select the contract type and enter basic contract information, including the contract party and the contract amount. If you set the Authoring Party field to External, then the contract terms are being authored outside the application in a separate document which you upload in the Upload Documents page.

Selecting and Previewing the Contract Terms Template

If the Authoring Party is Internal, depending on the setup, the application recommends a contract terms template or lets you select one of your own. You can preview templates by clicking the Preview Contract button. The preview does not appear in the same format as the final contract and does not include the clauses that may be inserted by the application in later steps.

Entering Variable Values

Depending on the business rules for the selected template, you may need to enter variable values. The application substitutes the values in the contract and may use them to determine if additional clauses are required. This step is the equivalent to entering variable values using the Editing Variable Values action or running the Contract Expert feature during authoring without the wizard.

Answering Questions

You may also need to answer a few questions. Based on your answers, the application inserts additional clauses into the contract. This step is equivalent to running Contract Expert during authoring when you do not use the wizard.

Uploading Documents

You can upload files as contract attachments. If you selected External as the Authoring Party, then you must upload the file with the contract terms as the primary contract document. If the contract terms are taken from the template, then the primary contract document is generated by the application automatically when you submit the contract for approval.

Reviewing the Contract

You can review the final contract terms, including any additional clauses inserted by the application. The displayed contract terms are formatted for HTML, but not in final format yet. If you want to view the contract in the final format, select the Preview Contract button. The PDF version is sent to approvers when you submit the contract for approval.

Editing the Contract and the Contract Terms

You can edit basic contract information using the Edit Contract in the Wizard action. Using the Edit Contract action, you can edit both the contract and the contract terms, and also add contract lines and other contract details.

You can create a contract by duplicating an existing contract or by creating an entirely new one either with or without the Contract Wizard. You can also create a contract from a contract template or using file-based import or web services. This topic outlines when you should use each method.

Duplicating an Existing Contract

To create a contract that is similar to an existing contract, select the Duplicate action either from within an existing contract or from the contract search page. When you duplicate an existing contract, you can select what to copy to the new contract.

Creating a Contract Using the Contract Wizard

Select the Create Contract in Wizard task in the Contracts work area to use a quick and simple method for creating a contract without lines and without party information. You can later edit this to add additional details. With the Contract Wizard:

  • You are guided through a set of steps to create contracts

  • You are not required to run Contract Expert separately

  • You are not required to preview any clauses that Contract Expert automatically inserts into the contract terms

Creating a Contract Without the Contract Wizard

Select the Create Contract task in the Contract work area to create complex contracts. Using this task you can:

  • Add and edit parties and party contacts.

  • Add and edit contract lines.

  • Edit the contract terms.

  • Export the contract terms for editing in Microsoft Word.

  • Add notes and view contract history.

  • Run Contract Expert, when required.

  • Preview any clauses recommended by Contract Expert before they are inserted.

  • Create and manage contract fulfillment lines in buy-intent or supplier contracts.

  • View and enter contract risk management and projects billing information for sell-intent or customer contracts.

  • Create contracts of contract types with no contract terms.

Creating a Contract from a Contract Template

Select the Manage Contract Template task in the Contract work area and search for an active contract template. You can then open the template in edit mode or select the template in the search results area and click on the Create Contract from Template action menu item to create a contract quickly.

Using this method, you can create a contract for the default system date, or choose any other date as the start date of the contract. You can also choose to retain party and line information from the template, if available. If you enabled the contract type for terms, then the template inserts the latest terms from the Contract Terms Library. You can also create a contract for a different party, or one with retaining lines, billing information, associated projects and tasks, and notes. These contracts will be in Draft status.

Creating a Contract Using Web Services

You can use Web services to create many contracts in one go in an integrated application such as partner management or projects.

Use the ContractService endpoint URL and select the createContract operation and the required source, if HTML or XML. To create a contract in integrated applications, select and enter the following required parameters to be included in the message:

  • Contract header information

  • Party information,

  • Amounts and currency

  • Contract lines

  • Bill and revenue plans

  • Labor and non-labor rates and rate overrides

  • Labor multipliers

  • Job title and assignment details

Contract validation performs a series of checks that determine if your contract can be submitted for approval. You must correct all errors. Fixing the warnings is optional.

You can validate your contract at any time during contract authoring by selecting the Validate Contract action. The same validation is performed automatically when you submit the contract for approval.

Required Information

The application checks the contract for the following:

  • The selected contract type and line type must be active.

  • A contract must have at least one of its contacts as its owner. The owner role is defined in the contract type set up.

  • The contract must have at least one contract line if the contract types allows contract lines.

Date Validations

Date validations include the following checks:

  • The contract must have a start date.

  • Line start and end dates must be within the header start and end date.

  • Line due date must be equal to or later than the line start date, and must be equal to or earlier than the line end date.

Validations for Supplier Contracts

Validations for supplier contracts include:

  • The purchasing category must be valid.

  • For a supplier contract, the supplier site must be valid and active.

  • If line type is Item, Item must be valid for the purchase category.

  • Payment terms, freight terms, FOB, and ship-to-location must be valid.

  • Supplier site must be valid for Supplier.

  • The selected carrier must be active and valid for ship-to-organization.

Validations for Customer Contracts

Validations for customer contracts include:

  • Ship-to site must be entered if the contract is billable.

  • Days to expiration must be less than the contract duration.

  • At least one contact must be entered for the contract expiration notification.

  • If the contract requires expiration information, then you must enter a contract end date and a contact for the expiration notification.

  • Ship-to account must be active for the line.

  • Supplier at the line level must be one of the suppliers entered as a party for the contract.

  • The sum of all sales credits must equal 100.

Validation of Parties, Accounts, and Sites

Validations of parties, accounts, and sites include checks such as:

  • A contract must have at least two parties: a buyer, and a seller.

  • For a contract that is enabled for electronic signature, all contacts marked as signers must have a valid e-mail address.

  • Billing control effective dates on a contract header must be within contract effective dates.

  • Billing control effective dates on a contract line must be within contract line effective dates.

  • Billing control start date for a contract or its line must be earlier than its end date.

  • For project billing, the contract must have a bill plan and a revenue plan. Select a bill plan and a revenue plan for each contract line that has a contract line type source of project-based.

  • For project billing, when a contract line is associated with a percent complete or percent spent bill or revenue plan, and the calculation level is associated project, a funded amount must exist for at least one active associated project.

  • For project billing, when a contract line is associated with a rate based, percent spent, or percent complete bill plan or revenue plan, at least one active associated project must exist for that contract line.

  • For project billing, when a billing resource is specified for an active billing control, the billing resource must be active in the resource breakdown structure.

  • For project billing, the bill-to contact must be currently valid for the bill-to account.

  • For project billing, the bill-to account, bill-to site, and bill-to contact values must be entered.

  • For project billing, when revenue is fixed price, invoicing must be in the contract currency.

  • For project billing, a contribution percentage between zero and 100 must be entered.

  • For project billing, a contract organization must be entered.

  • For interproject billing, the associated project must be different to the receiver project.

  • Billing control hard limit amount must be between 0 and the contract amount or the contract line amount, depending on whether the billing control is at the header or the line level, when the contract type limit type is hard.

  • The bill plans and revenue plans for contract lines must have valid combinations of invoice and revenue method classifications.

Contracts FAQs

If you're creating a contract without project information, you can select a business unit that has no assigned ledger or legal entity. To enable autonumbering for such a contract, you must enable the contract type for the different global numbering levels and business unit. In this case, the numbering levels of the ledger and the legal entity are don't apply. In addition, you must have created document sequences for the document categories of the global and business unit.

Note: The currency on such a contract is the currency of the business unit of the contract.

The Fulfillment tab of the supplier contract displays a conversion rate if a ledger is assigned to the business unit of the contract. If you created the contract without setting up a ledger, then the cost of executing the fulfilment is based on the ledger assigned to the purchasing business unit.

The conversion rate is required only when the ledger assigned to the business unit of the contract is different from that assigned to the purchasing business unit. In this case, the conversion rate calculates the fulfilment cost by converting the currencies of the ledgers.

Select the risk type, probability of such risk occurring, impact of such a risk, and any other relevant comments. You can record the occurrence of any of these contracts risks by entering the date of occurrence for the contract risk, at any point of time.

Recording contract risks helps your organization prepare for potential problems. It doesn't affect contract processing.

Note: Entering or editing contract risk information doesn't require you to amend the contract.

You select the Manage Contract Risks task from the Setup and Maintenance work area, as part of the Enterprise Contracts offering in the Enterprise Contracts Base functional area. Contract authors use this list during contract authoring to record contract risks.

Recording contract risks helps your organization prepare for potential problems. It doesn't affect contract processing.

Note: Risk names must be unique.

You can attach any kind of file, including images, to a contract in the Documents region of the contract Header tab. Files or URLs added in the Contract Document region can only be updated when the contract is in the Draft or Under Amendment statuses.

You can classify the documents you attach in this region as:

  • Contract: For documents describing the contract

  • Approval Abstract: For comments and notes made by approvers

  • Contract Image: For scanned copies of the contract

The files or URLs you add to the Supporting Document region can be updated at any time. The files you attach are automatically submitted for indexing so they are available for text searches.

Note: If you create a new version of a contract, the application automatically carries the attachments forward to the new contract version.

When it's in Draft, Under Amendment, or Pending Signature status. Create a new version when a customer or supplier requests changes in a contract that is internally approved and pending signature. The new version is in Draft or Under Amendment status based on whether it was created for a Draft contract or an Under Amendment contract that is Pending Signature.

Note: You cannot create a new version after you submit the contract for approval and the contract is in Pending Approval status.

This new version will be in Draft status if the original contract was in Draft or Pending Signature status. For a contract in Under Amendment status, the new version that you create is also created in the Under Amendment status. You can also create a new version of an active contract using the Amend action. This new version will be in Under Amendment status. Once a new version is created, the original version retains the status it was in when the new version was created and is only accessible from the Contracts History page.

The application carries the attached documents forward to the new contract version.

Select the Delete action. You can delete either all versions or only the current draft. You can delete a version of a contract only if the contract has more than one version.

Selecting the Delete action when there are multiple versions provides two options: Delete Current Version Only, and Delete All Versions. Deleting the current version reverts the contract to its previous version while deleting all versions removes the contract and all its versions. If there is only one version for a contract, selecting the Delete action asks for a confirmation, and deletes the contract.

To be notified about the contract end date in advance, you must specify certain criteria during the contract type set up.

  • Number of days before the contract end date by when the renewal notification should be sent.

  • Who should receive the notification: contract administrator, seller, or buyer.

Note: Note the following while setting up renewal notifications:
  • Setting up of renewal notification in contract type setup is optional.

  • Renewal notifications set up for a contract type are applicable to all contracts created using such a contract type.

  • Renewal notifications are sent only for contracts that have an end date specified.

Searching for a Contract

This topic describes the two ways that you can search for enterprise contracts: either by using contract attributes, or by searching for specific words or phrases in the text of the contract's attachments. Searching by contract attributes is the quickest way of searching for an enterprise contract.

Note: The application has to index the text of a contract before performing a text search so you cannot search by text for several hours after you create or edit a contract.

Searching by Enterprise Contract Attributes

You can search for enterprise contracts using one attribute, such as the party name or contact number, or by using multiple attributes.

  • To search using a single attribute, enter your search term in the Search: Contract pane.

  • To search using multiple attributes, use the advanced search available in the Search regions of the Manage Contract page and Contracts work area.

You can use the advanced search to find all the contracts that list you as an owner, and to save your most common searches for reuse.

Searching Contract Text

You can search for specific text within a contract or its attachments using the Search Contract Text page. The text can be a word or a phrase. You can enter additional search criteria, such as status or dates, to narrow the search results. By default, your search returns only the latest versions of documents, but you can expand the search to all versions by selecting the Include All Versions option.

You can use the same text search to also search for the following documents with contract terms authored in the Oracle Purchasing and Oracle Sourcing applications:

  • Standard purchase orders

  • Blanket purchase agreements

  • Contract purchase agreements

  • Requests for information

  • Requests for quotation

  • Quotations

Select the contract or document name link in the search results to view the contract or the purchasing document in its native application.

Global Search

You can also search enterprise contracts and documents from other applications using the Search field. This search, which also searches the text of attachments, lets you search for documents in a broader variety of applications, including Oracle Fusion Projects and Oracle Fusion financial applications, depending on your level of access. While you can use this search to find and display enterprise contracts, you cannot narrow your searches or include all versions in your search.

Search FAQ

The worklist only lists contracts that require your approval.

Contract Amendment

Update an active contract by selecting the Amend action. When you amend a contract, you change it. This can include the terms and conditions of a contract. Cancel the changes and return to the original active contract by selecting the Revert action.

Amend a Contract

If you amend a contract, its status as well as the status of its contract lines change to Under Amendment For a procurement contract that is under amendment, you can change all contract details except fulfillment. However, you can process fulfillment lines on the latest active version of the contract under amendment. You can also amend a contract when its status is On Hold or Expired. Amendments are effective after the amended contract is approved or rejected.

If the amendments are approved, the contract status changes as follows:

  • If the contract was active before amendment, its status returns to Active.

  • If the contract was On Hold, its status returns to On Hold.

You can print a summary of the amendments made with or without the amended terms and conditions of the contract if you selected the appropriate terms layout template for the contract type. For example, for contract types with extensive terms and conditions, such as public sector contracts, recipients of the contract may prefer to see just a summary of changes annotated with sections added and deleted, clauses added, deleted, and updated, and amendment description instead of the full terms and conditions.

Note: You can create a new version of a contract that is under amendment.

You can edit some information in an active contract without amending it. This includes the contract description, name, and party information. For customer contracts related to projects, you can place a hold on the billing and revenue plans.

View Amendment Summary

When a contract is in the amendment process you can view a summary of the amendments made to the contract by selecting View Amendment Summary from the Terms Actions list on the Contract Terms panel. This summary provides visibility to updates to sections, clauses, variables, contract documents, and deliverables made during the current revision process.

Revert a Contract

When you revert a contract, changes made in the latest amendment and changes made through Create New Version are canceled. The contract returns to its state prior to the amendment.

You can revert contract changes only when it is Under Amendment. You cannot revert after the contract is approved.

Note: Reverting does not affect the contract information that you edit without amending the contract.

Amendment FAQs

Revert a contract to its previous active version by selecting Revert action when the contract is under amendment. You cannot revert a contract after the amendment is approved.

Yes, you can modify the contract attributes, listed in the following table, that do not impact the legal agreement between the parties, without putting the contract under amendment.

Tab/Page Region Attributes

Overview

Description, Name

Parties

All fields of Contacts table

Risks

All attributes

Notes

All attributes

Bill Plan

Manual Hold

Revenue Plan

Manual Hold

In cases where a customer requests changes in a contract that is internally approved and pending signature, you can create a new version for that contract to make the required changes.

If you create a new version of a contract, this new version is in Draft status, and the original version is no longer available for approval or acceptance.

Note: You cannot create a new version once a contract is signed and accepted. You can create a new version only for a draft, under amendment, or pending signature contract. Once the contract is signed and active, if you still need to make changes, you can amend the contract. Amending a contract creates a new version of the contract in Under Amendment status.

For contract types with extensive terms and conditions such as public sector contracts, where contract terms may often be amended, you can select a terms layout template that enables you to print a summary of the amendments made to contract terms with or without the full list of amended contract terms and conditions. In such cases, recipients of contracts prefer to see just a summary of the amendments instead of the entire terms and conditions, especially as the summary is annotated with sections and clauses added and deleted, and clauses updated.

You can then use the Preview action on the Edit Contract page to view the contract and contract terms or amendment summary before you print it to send it to the recipients of the contract. Alternatively, you can also control the printing of the amendment summary without adjusting the terms layout template for each contract in the Contract Terms tab.

Note: The View Amendment Summary action in the Contract Terms tab of the Edit Contract page displays a tabular view of amendments made to contract terms and conditions and also to contract documents.

How can I track updates to the variables when a contract is amended?

You can view updates to the values of variables as well as updates to sections, clauses, contract documents, and deliverables in the contract amendment summary. Use the View Amendment Summary action in the Contract Terms tab of the Edit Contract page to display a tabular view of amendments made to contract terms and conditions.

How can I use social collaboration to communicate a contract change?

Use the Social link on the Edit Contract page to invite a contract manager to a conversation regarding recent changes.

  • Click Social to open the Oracle Social Network window and share or join the contract.

  • Click New Conversation and add the contract manager as a member.

  • Post your concerns and ask for a preference.

The contract manager can see certain attributes of the contract, such as Status and Name, and your action. The contract manager responds, you complete any changes to the contract, and move on.

Contract Templates

The Manage Contract Templates task in the Contracts work area provides several ways to create a contract template. The following examples illustrate these options.

Scenario

Duplicating an Existing Contract Template

You can duplicate a contract template from an existing contract template. The duplicate template will be for the same business unit, legal entity, contract type, and currency as the original template. In addition, you can choose to retain party and line information from the existing contract template.

To duplicate an existing contract template, select the Duplicate action either from within an existing contract template on the Edit Contract Template page or from the Contract Template search area on the Manage Contract Templates page. The contract template that you are duplicating can be in Draft, Active, or Expired status. Specify the new template number in the Duplicate Contract Template window. This action creates a new contract template in Draft status.

Scenario

Creating a New Contract Template

Select the Create Contract Template action from the contract template search area on the Manage Contract Templates page. Specify the business unit, legal entity, contract type, template number, and currency on the Create Contract Template window. To create contract templates with lines and line items, you must have selected the required item master. This action creates a new contract template in Draft status for which you can perform the following tasks:

  • Add and edit parties and party contacts

  • Add and edit contract lines

Scenario

Saving a Contract as a Contract Template

You can select the Save as Contract Template action either from within an existing contract on the Edit Contract page or from the contract search area on the Manage Contracts page. This creates a new contract template with the existing contract attributes for business unit, legal entity, contract type, contract intent, amount, and name. If you also chose to retain party and line information from the contract, the item master is copied over to the contract template from the contract. You can then edit most of these attributes on the template; the exceptions are business unit, legal entity and contract type.

The new contract template is created in Draft status and is effective from the date of creation. In this new version of the contract template, you can make the standard edits including edits to the following information:

  • Effective and expiration dates

  • Item master

  • Party and party contacts

  • Lines

Scenario

Creating a New Version of a Contract Template

You can create a new version of an existing contract template by selecting one of the following:

  • The Create New Revision action from within an expired or active contract template on the Edit Contract Template page or from the Contracts Search area on the Manage Contract Templates

  • The Create a New Version action from within a draft contract on the Edit Contract Template page or from the contract search area on the Manage Contract Templates

This action creates a new version of the existing contract template in Draft status that is displayed along with the original contract template in the Contract Template History page. All the original contract template attributes are copied over to the new version.

In the new version, you can then edit the following, if required

  • The effective and expiration dates

  • The item master

  • The committed amount

  • Party information

  • Line information

You must then activate the new version or revision to make the template available for creating contracts.

A contract template typically moves through a variety of states throughout its life cycle, from initial drafting to active management and eventually to template expiry. A contract template status indicates where the template is in its life cycle, and it also determines what actions and operations are permitted for the template.

Note: Contract template statuses are predefined.

The following table describes the available contract statuses and lists the permitted actions for each status.

Status Description Available Actions and Resulting Action and Statuses

Draft

The initial status of a contract template

  • Duplicate

    Resulting action and status: Creates a new contract template in Draft status that you can edit.

  • Edit

    Resulting action and status: Enables you to save changes to the template and maintains its Draft status.

  • Create New Version

    Resulting action and status: Creates a new version of the template in Draft status that you can edit.

  • Activate

    Resulting action and status: Changes the status of the template to Active and makes it available for use in creating contracts.

  • Delete

    Resulting action and status: Removes the contract template from display.

  • Preview

    Resulting action and status: Opens a PDF version of the template.

Active

The status that a contract template changes to when you activate the draft template

  • Duplicate

    Resulting action and status: Creates a new template in Draft status. The original template stays in its Active status and is available for use in creating contracts.

  • Create Revision

    Resulting action and status: Creates a new version in Draft status that you can edit. The original template, although it is still in Active status, is unavailable for use in creating contracts.

  • Create Contract from Template

    Resulting action and status: Creates a new contract in Draft status for which you can choose the items you want copied over before you make further edits to the new contract.

  • Preview

    Resulting action and status: Opens a PDF version of the template.

Expired

The status that a contract template changes to when its expiration date is reached

  • Duplicate

    Resulting action and status: Creates a new template in Draft status and leaves the original template in its Expired status.

  • Create Revision

    Resulting action and status: Creates a new version in Draft status and leaves the original template in its Expired status.

Note: When a contract template is in Draft or Active status and the contract template expiration date is reached, the application automatically changes the contract template status to Expired. When a new version of a template is created, you can see the earlier versions only in the History tab.

The following figure shows the flow of a contract template.

The figure shows all the actions that can be performed
on contract templates based on their status, and the effect of these
actions.

Contract Template FAQs

What's the difference between a contract template and a contract terms template?

A contract template is like a contract. The contract template provides a boilerplate for common contract attributes that the organization can use in creating multiple contracts quickly. For example, a contract template can help create multiple contracts for a particular customer, or multiple contracts with the same contract line information for different customers. However, a contract template has no fulfillment lines, terms, or financial summary. You can make the contract template available for use by activating it directly after you create it without validation or approval. In addition, you cannot close a contract template or place it on hold. Just as you amend an active contract to make changes to it, so you must revise an active contract template to make changes to the template. Revising a contract template creates a new version of the template in Draft status.

You create acontract terms template in the Terms Library. The terms template is a boilerplate for contract terms and conditions relevant to the business of the contract. This includes standard clauses and sections that are applied to the contract using the template selection default rules that you set up. However, before a terms template can be used to apply terms to a contract, the terms template must clear the automated validation check and must be approved by the contract terms author. You can place contract terms templates on hold and edit, revise, approve and reject terms templates. If you need to make changes after the template is approved and in use, you can create a new version of the terms template and submitting it for approval. The revision once approved, automatically replaces the current version in the Terms Library. The application does not save previous versions of templates.

You might not be able to create a contract from the selected contract templatefor the following reasons:

  • The contract template is in a status that does not permit this action. For instance, it is in Draft status pending activation or it has expired.

  • The contract template might be an active template that is under revision which means a newer version of the template is in Draft status pending activation. When you are creating a contract from a template, the application uses the latest active version of the template.