How Contract Approval Works

A contract needs approval before it's executed. You can use a single application to approve all types of contracts.

Before you submit a contract for approval, you must complete these tasks:

Review contract deviations, if any.
Validate the contract.
Review approvers, and add viewers and approvers as required with a note to additional approvers.
Use the user statuses and transitions to pass the contract between teams for review, such as legal, finance, and accounts.
Preview a printable version of the contract.

Note: Based on the contract deviation, an application administrator can configure additional approval rules.

Here's the sequence that explains the complete flow of contract approval, from approval policy setup to contract approval to contract acceptance:

The contract administrator sets up approval policies and approver groups.
You submit a contract for approval.
The next approvers can view the approval task in their My Worklist area.
The contract is reviewed for approval. A contract review may include the following:
- The approver requests more information for their approval.
- The application sends the approval request to the next approver in the hierarchy.
- The approver delegates contract approval.
- The approver transfers the contract to another approver.
The approver approves or rejects the contract.
The customer or supplier accepts the contract or requests changes.
The contract is available to view approval status and history.

Set Up Approval Policies and Approver Groups

The business analyst or contract administrator sets up approval policies, and defines the following categories of approvers:

A single or chain of approvers based on a set of rules
Parallel approvers
Additional approvers based on any contract deviations

Send Automatic Notifications to Approvers

The application automatically sends a notification to the approver when a contract is submitted for approval. If you included a note while adding an approver, then the application displays the note along with the approval notification. Contracts pending approval appear on My Worklist.

Submit a Contract for Approval

Attach the following documents to the contract and submit for approval:

The primary contract document with the terms and conditions.
Any contract documents such as state of work, drawings, and so on.
The contract deviation, if any, and deviation justification.

Use one of the following work areas to submit a contract for approval:

Contract authoring page
Contracts search results
Pending Approvals bin in the Contracts work area
Dashboard

Validate the contract before submission or the application automatically validates the contract when you submit it, listing any errors and warnings. You must fix the errors but you can ignore the warnings and continue with the submission. If you submit the contract for approval without errors, then the application takes it to the next step and enables you to review approvers before you submit the contract for approval. You can add viewers and approvers to the approval hierarchy and add notes to approvers that they receive along with the approval notification. When you click Submit, the status of the contract changes to Pending Approval.

Note: Withdraw a contract from approval to make any changes before it's approved. If you withdraw a contract from approval, the contract status changes to Draft or Under Amendment so that you can make changes and resubmit.

Review a Contract for Approval

You must review a contract in detail to approve or reject it. Alternatively, use the History tab to view approval or rejection details in the approval region and comments in the snapshot view for the version and approval submission date and time. You can also ask the contract author for more information if required, or ask an approver to re-examine and reapprove the contract. Optionally, delegate or transfer the approval task to another approver. If you delegate the approval task to another approver, the assignee approves or rejects the contract on your behalf. If you transfer the approval task, you are no longer associated with the approval or rejection.

Note: Get a complete view of the contract from the approval task details page.

Approve or Reject a Contract

Approve or reject a contract after a complete review of the contract. Optionally, add comments to explain why you approved or rejected a contract. If this contract version is submitted again for approval, the approver can see your comments in the snapshot view. When you approve a contract, its status changes as follows:

If the contract requires signature, its status changes to Pending Signature.
If the contract does not require signature for acceptance, its status changes to Active.

When you reject a contract, its status changes as follows:

If the contract was Pending Approval, its status changes to Draft.
If a version of the contract was already Active, and its next version was Pending Approval, its status changes to Under Amendment.

Note: If after submitting a contract for approval, you want to make changes, then use the Create New Version action to create a new version of the contract in Draft status. Once a new version of the contract is available, you can access older versions of the contract only from the History page.

Accept a Contract or Request Changes

Accept a contract if you agree with the terms and conditions and all of its contents. If you want any changes, reject the contract and request changes. If you accept a contract and the contract doesn't require any signature, its status changes to Active. If you reject a contract, its status changes to Draft or Under Amendment.

If the contract requires a manual signature, the signers can click the Sign Contract action and enter their signature details in the Sign Contract window. You can optionally capture any signature details in the Sign Contract page on behalf of the contract signers, then click OK to activate the contract. If the signers are external party contacts, then the internal user signs on their behalf. The History tab of an active contract enables you to edit signature details after you accept the contract.

If the contract is enabled for electronic signature and is Pending Signature, then it must be sent to the designated signers on the contract to move the contract to the Sent for Signature status. The sender uses the integrated electronic signature pages to manage the signature process. For contracts requiring signature, the contract becomes active only when all signers have signed the contract. To make changes to an active contract, use the Amend action. Using the Amend action creates a new version of the contract in Under Amendment status to which you can make changes and then submit for approval.

View Approval Status and Approval History

In the History tab, view the approval status while a contract is in approval, and the approval history after it's approved or rejected. You can view the approval history of the last approval cycle for a version, by leaving the default Approval Submitted On date and time in the Approval region.

In the History tab, you can also view the contract amount for non-agreement contracts, the committed amount for the sell intent types of agreements, the agreed amount for the buy intent types of agreements.

Note: The application shows approval history in either a history tree or a list view, depending upon whether the data has been purged in the database and archived, or is still available in service-oriented architecture (SOA). List view means it's been purged, and the history tree view means it hasn't been purged.