Guidelines for Setting Up Contract Types for Different Contracts

Learn how to set up contract types for different kinds of enterprise contracts.

Your contract type setup depends on the type of contract you're setting up. The main types are:

• Customer Contracts

  Your organization is selling goods and services.

• Supplier Contracts

  Your organization is purchasing goods and services.

For these types of contracts, the key contract type settings are based on these questions:

• Are you selling or buying?

  For Intent, you select either Sell or Buy.

• Are you buying or selling now or negotiating a long-term contract with terms, such as pricing, that will govern a future purchase or sale?

  For Class, select Enterprise Contract if you're buying or selling now. If you're negotiating a future purchase or sale, select one of the agreement classes, for instance Purchase Agreement for a future purchase.

• Does the contract involve the purchase or sale of specific items?

  If the contract involves the purchase or sale of specific items, then you can specify how those items are entered into contract lines by adding different line types to the contract type. The Line Class assigned to the contract type controls the line types you can assign to a contract. Some line types in project contracts and sales agreements permit contract authors to select items tracked in inventory; others permit the entry of any item as text, for example, for free-form services. Similarly, you can only associate subscription or coverage to a contract type with the Line Class set to "Service".

  Some of the line types support integration with other Oracle applications, for example, project line types support the billing of items through Oracle Project Billing. Buy-intent lines allow the capture of pricing information and support integrations to purchasing systems to create POs or blanket purchase agreements.

The combination of answers to these questions result in the numbered cases in this figure and are described in the different sections of this topic.

There are other special kinds of contracts where these questions are less relevant or don't apply. These include:

• Partner Agreements

  Contracts with partners.

• Miscellaneous Contracts

  Contracts such as nondisclosure agreements.

The following figure shows the decision flow when you wither buy or sell.

Customer Contracts

This section describes the settings for sell-intent contracts. For the sell intent contracts to be available for selection, you must enable the customer contract management in the Assign Business Unit function. Case numbers correspond to diagram that follows.

Case 3: Customer Contracts with No Lines

These table describes how you can use the contract type settings to create simple sales contracts with no lines.

Purpose of Contract	Contract Type Settings
Simple customer contract with no lines.	Class: Enterprise Contract Intent: Sell Allow Lines option: Deselected

Case 4: Customer Contracts with Lines

This table describes the key contract type settings for sell-intent contracts for items or services. In this release, you can add lines for selling items and services that are executed as part of a project (for example, project manufactured items or professional services) or lines for services.

Purpose of Contract

Contract Type Settings

Sell items and services that are tracked and billed.

Class: Enterprise Contract Intent: Sell Allow Lines option: Selected You can add two types of lines when the Class is set to Enterprise contract and the Line Class is set to Project: Free-form, project For selling items not tracked in inventory. Item, project For selling inventory items. You can add two types of lines when the Class is set to Enterprise Contract and the Line Class is set to Service: Coverage For selling services provided on covered assets. Subscription For selling recurrent items or services. You can add line Warranty when the Line Class is set to Warranty. For selling included and extended services. On the Advanced Options tab, leave the Contract Terms Authoring option not enabled for project line types. Note: If you use Contract Terms Library, then there is no functional link between the contract terms and the Oracle Fusion Projects application. Therefore you can't monitor the adherence of a project to the terms in the contract.

Case 5: Contracts for Future Sales Without Lines

This table describes the key contract type setups for future-sale contracts without lines.

Purpose of Contract	Contract Type Settings
Contract for future sales, without specifying the goods and services as contract lines.	Class: Agreement Intent: Sell Allow Lines option: Leave not enabled

Case 6: Contracts for Future Sales with Lines

This table describes the key contract type setups for future-sale contracts with lines.

Purpose of Contract

Contract Type Settings

Create this type of contract when you know the detail of the goods or services you plan to sell to a specific customer in a period, but you don't yet know the detail of your delivery schedules. You can use this type of contract, sometimes called a blanket sales agreement, a standing order, or a blanket order, to specify negotiated prices for your items before actually selling them. Use this type of contract when the customer has negotiated volume discounts and want to create releases against these negotiated volumes, or commits to specific items, quantities, or amounts. Note: Only contracts using Oracle Order Management pricing integration will be available when creating a sales order in Order Management.

Class: Agreement Intent: Sell Allow Lines option: Selected You can add the following types of lines: Group Product

Supplier Contracts

This section describes contract type settings for buy-intent contracts. For the buy intent contracts to be available for selection, you must enable the procurement contract management in the Assign Business Unit function.

Case 7: Supplier Contracts Without Lines

This table describes the key contract type setups for supplier contracts where you're negotiating purchase of items or services without specifying the actual items to be purchased.

Purpose of Contract

Contract Type Settings

Contract where you negotiate specific terms and conditions or a purchase without specifying the goods and services as contract lines. Contract authors can create a corresponding purchase agreement within Oracle Fusion Purchasing or another integrated purchasing application by adding a contract deliverable for the contract. You can use the deliverable to monitor the status of the agreement, but purchase orders are created and tracked in purchasing.

Class: Enterprise Contract Intent: Buy Allow Lines option: Leave not enabled

Case 8: Supplier Contracts with Lines

This table describes the key contract type setups for supplier contracts for immediate purchase of specific items or services.

Purpose of Contract	Contract Type Settings
Purchase goods and services. This type of contract makes it possible for contract authors to create purchase orders in Oracle Fusion Purchasing or another integrated purchasing application from individual contract lines by adding contract deliverables. You can monitor the status of each purchase order directly from the deliverables.	Class: Enterprise Contract Intent: Buy Allow Lines option: Selected You can add two types of lines: Free-form For items not tracked by inventory. Item For items tracked by inventory.

Case 9: Contracts for Future Purchases Without Lines

This table describes the key contract type setups for future-purchase contracts without lines.

Purpose of Contract	Contract Type Settings
Contract for future purchases, without specifying the goods and services as contract lines. This type of contract makes it possible for contract authors to create a contract purchase agreement. Contract authors can create contract purchase agreements with suppliers to agree on specific terms and conditions without indicating the goods and services.	Class: Agreement Intent: Buy Allow Lines option: Leave not enabled

Case 10: Contracts for Future Purchases with Lines

This table describes the key contract type setups for future-purchase contracts with lines.

Purpose of Contract

Contract Type Settings

Create this type of contract when you know the detail of the goods or services you plan to buy from a specific supplier in a period, but you don't yet know the detail of your delivery schedules. You can use this type of contract, sometimes called a blanket purchase agreement, a standing order, or a blanket order, to specify negotiated prices for your items before actually purchasing them. Use this type of contract when you have negotiated volume discounts and want to create releases against these negotiated volumes, or when you commit to specific items, quantities, or amounts. You can issue a blanket release against a blanket purchase agreement to place the actual order (as long as the release is within the blanket agreement effectivity dates). Contract authors can automatically create corresponding agreements in Oracle Fusion Purchasing or other integrated purchasing applications by adding contract deliverables and monitor the execution of those agreements from the deliverables.

Class: Agreement Intent: Buy Allow Lines option: Selected You can add the following types of lines: Free-form To purchase items not tracked by inventory. Item To purchase items tracked by inventory.

Special Contracts

This section describes the settings you want to use for partner agreements and for miscellaneous contracts.

Case 1: Partner Agreements

Use this contract type settings for partner agreements in Oracle Partner Relationship Management.

Purpose of Contract	Contract Type Settings
Partner enrollment agreement	Oracle Fusion Partner Relationship Management uses contract types only for applying contract terms templates with boilerplate contracts, so most of the contract type entries don't apply or have no effect. Class: Partner Agreement Intent: Sell You must enable contract terms authoring by selecting the Enable Terms Authoring option.

Case 2: Miscellaneous Contracts

This table lists the key contract type settings for nondisclosure and other simple contracts.

Purpose of Contract	Contract Type Settings
Nondisclosure agreement	Class: Enterprise Contract Intent: Sell Allow Lines option: Leave not enabled