Whether it’s a paper document or an e-signed electronic agreement, contracts establish the rights and obligations of the parties involved to ensure clarity and prevent potential disputes.
In this article, we look at what contract authoring is, its challenges, and the potential role of software in streamlining the process.
Key takeaways:
- Contract authoring is the process of drafting and creating contracts.
- Minimize the chance of disputes and protect the interests of all parties by authoring your contracts.
- Ensure all parties are clearly identified and that your document is concise.
- Contract management software allows for the easy management of the entire contract lifecycle.
What is contract authoring?
Contract authoring is the process of drafting and creating a contract.
It involves the careful composition of terms, conditions, and clauses to govern the legal agreement between the parties.
Contract authoring ensures that the contract accurately reflects the parties’ intentions and protects their interests.
It’s one of the first stages in contract lifecycle management and a great opportunity to put in writing any verbal terms that have already been discussed.
Why is contract authoring important?
Contract authoring is important because it lays the foundation for clear, enforceable agreements. Creating contracts can be complex and time-consuming, often requiring legal knowledge and close attention to detail. A well-drafted contract helps ensure that everyone involved understands their rights, responsibilities, and expectations.
That’s where contract authoring comes in, it’s the process of crafting legally binding agreements that support smooth operations and reduce risk.
What is contract management?
Contract management is the full lifecycle of a contract, from creation and negotiation to execution, tracking, and renewal.
It ensures that agreements are written well, followed, and optimized over time.
Contract authoring plays a critical role in this bigger picture. When contracts are clear and comprehensive from the start, it’s easier to manage them effectively later on.
The benefits of contract authoring
Before a contract is signed, the authoring stage plays a crucial role in shaping how the entire agreement will function.
Here’s how contract authoring delivers real value for all parties involved.
It establishes an understanding
Contract authoring helps establish a clear and unambiguous understanding between parties.
Outlining rights, obligations, and expectations minimizes the chance of disputes and provides a legally binding framework that protects the interests of all parties.
Acts as a reference
Contract authoring also acts as a reference point in case of disagreements or conflicts.
If a dispute does occur, each party can refer to the contract to resolve any issues and determine an appropriate course of action.
This saves time and resources and ensures any resolution aligns with the original intentions of the parties.
Provides security
Contract authoring provides a sense of security and confidence for the businesses involved.
By making agreements formal and documenting them in writing, it establishes a legally enforceable agreement that holds both parties accountable.
It’s possible to transfer data between documents for contract authoring to make this process easier.
This helps to formalize the agreement, create a greater degree of certainty, and reduce the risks associated with verbal agreements and loosely defined arrangements.
Mitigates risks
What’s more, contract authoring can help mitigate risks.
By identifying and addressing potential risks upfront, such as liability, indemnification, and intellectual property rights, these contracts provide a framework for managing and allocating risk between the parties.
Supports better communication
Contract authoring also paves the way for more effective communication and negotiation.
During the drafting process, both parties have the opportunity to discuss and negotiate terms, ensuring the agreement aligns with their respective needs and expectations.
This open dialogue promotes a collaborative and mutually beneficial relationship between the parties.
Who should author a contract?
Authoring a contract should be done by legal professionals, such as lawyers or contract specialists, with the necessary know-how and expertise in contract law.
These professionals should be well-versed in legal terminology, drafting techniques, and the specific requirements of different types of contracts.
Their involvement ensures that the contract accurately reflects the parties’ intentions, complies with applicable laws, and protects the interests of all involved.
Characteristics of a contract
Let’s take a look at the key characteristics of a contract:
1. The participants
A contract must clearly identify the parties involved in the agreement.
This includes their legal names, addresses, and any relevant identification or registration numbers. This is to make sure the contract is enforceable and legally binding.
2. Clear and concise
A contract should contain a clear and concise statement of purpose and the objectives of the agreement, outlining the nature of the transaction and setting the context for the subsequent terms and conditions.
3. Terms and conditions
The contract must include the terms and conditions of the agreement too. These should specify the rights, obligations, and responsibilities of each party.
They can also include any relevant timelines, milestones, or deliverables and should cover potential contingencies and mechanisms for dispute resolution.
4. Outline value exchanged
A contract should clearly outline the consideration or value exchanged between the parties.
This includes any monetary payments, goods, services, or other valuable considerations involved in the agreement.
5. Signatures
A contract requires the signatures of the parties involved, indicating their acceptance and an agreement to be bound by its terms and conditions.
Signatures serve as evidence of the parties’ intent and are essential for enforceability.
They can be signed in person or electronically, and these days, e-signatures are just as valid as signing in ink.
What happens during the contract authoring process?
So, what exactly happens during the contract authoring process? Well, this usually involves several steps to ensure the creation of a comprehensive and legally sound document. These include:
Gathering information
The contract authoring process begins with gathering necessary information about the parties, their intentions, and the nature of the agreement.
This includes understanding their requirements, objectives, and potential risks associated with the contract.
Initial drafting
Based on this information, an initial draft of the contract is prepared.
This involves structuring the contract, including inserting appropriate headings, clauses, and sub-clauses and addressing all relevant aspects of the agreement.
Review and editing
The draft contract is reviewed and edited for clarity, accuracy, and legal compliance.
This stage may involve multiple iterations as legal professionals and the parties involved provide feedback and suggest revisions.
Negotiation and revision
Parties may enter into a negotiation phase to address any disagreements or modifications required.
It’s here that parties can start an open dialogue and resolve any conflicting interests.
Finalization
Once all parties agree on the terms and conditions, the final version of the contract is prepared.
This incorporates the agreed-upon changes and is made ready for execution.
Execution
The contract is signed by all the parties involved, indicating their acceptance and agreement to be bound by its terms.
Signatures may be physical or electronic, depending on the applicable laws and preferences of the parties.
Manual contract authoring vs. software-based contract authoring
While some businesses still use manual contract authoring, there’s a reason why most have adopted a software-based approach.
Here’s a quick comparison of how traditional manual workflows compare with contract management software.
| Manual contract authoring | Software-based contract authoring |
| Drafting happens in Word or docs, often using outdated files. | Authors use up-to-date templates and clause libraries built into the system. |
| High chance of inconsistent language or version mix-ups. | Standardized, pre-approved clauses keep language consistent and compliant. |
| Edits can move through long email chains and multiple attachments. | Real-time collaboration and tracked changes streamline the drafting process. |
| Review cycles can take longer because the legal team has to read everything. | Automated flags highlight only non-standard clauses or changes. |
| Limited visibility into which version is final or who changed what. | Built-in version control and audit history make tracking easy. |
| Hard to scale as contract volume grows. | Automated workflows and reusable clauses help with high-volume, efficient drafting. |
Challenges of contract authoring
Contract authoring can pose various challenges that may need to be addressed. Common issues include:
Legal complexity
Contract law can be complex and subject to interpretation.
Ensuring a contract accurately reflects the parties’ intentions while complying with legal requirements can thus be challenging, which means you’ll likely need the help of trained legal professionals.
Ambiguity and vagueness
Poorly drafted contracts, which lack clarity or contain ambiguous terms, may lead to misunderstandings and disputes.
It’s, therefore, vital that you carefully define and articulate the terms and conditions to avoid potential issues.
Time and resource constraints
Contract authoring can be time-consuming, especially when dealing with complex agreements or multiple parties.
Allocating enough hours and resources to the process is essential to ensure thoroughness and accuracy.
A changing legal landscape
Contract law and regulations can evolve over time, meaning contracts have to be periodically reviewed and updated to remain compliant.
Staying informed about legal developments is essential to avoid potential pitfalls.
How contract authoring software can help your business
As discussed, contract authoring is valuable to many businesses.
Luckily, contract management software can help to optimize the process and make it easier for businesses of all sizes.
This software can provide a range of features and functionalities to simplify drafting, collaboration, and contract management.
Here are some ways a contract authoring tool can benefit your business.
Templates and standardization
Intelligent contract authoring software often includes pre-built templates that you can customize according to your needs.
These serve as a great starting point, ensuring consistency and reducing the time spent on repetitive drafting tasks.
Moreover, you can save time and effort if your chosen provider has the ability to save reusable content such as contract clauses.
Collaboration and workflow management
Software facilitates collaboration among any stakeholders involved in the contract creation process.
It allows for real-time editing, commenting, and tracking of changes, enabling seamless communication and efficient workflow management.
Contract management software like PandaDoc takes this a step further with built-in approval workflows.
- You can set up rules so certain documents need internal sign-off before they’re sent out
- Approvers get notified automatically and can review, comment, or reject drafts directly in the platform
- This keeps the approval process organized and reduces the risk of someone sending out a contract that hasn’t been properly reviewed
Compliance and risk mitigation
Contract authoring software can integrate security and compliance features to protect contract data and may also include additional features such as clause libraries to ensure adherence to legal regulations and internal policies.
It can also assist in identifying and addressing potential risks, such as non-compliant clauses or missing terms.
Version control and audit trails
Maintaining an accurate version history and audit trail becomes an effortless process too.
Contract authoring software enables easy tracking of changes, revisions, and approvals, ensuring transparency and accountability throughout the contract lifecycle.
Automation and efficiency
Contract authoring software can also automate repetitive tasks, such as populating contract fields, generating clauses, and managing deadlines.
This saves time, reduces human error, and increases overall efficiency within your team.
Integration and analytics
Many contract authoring software solutions offer integration capabilities with other systems, such as customer relationship management or enterprise resource planning software.
This allows for seamless data transfer and analysis, providing valuable insights into contract performance and compliance.
Templates and clause library management
A solid template and clause library can play a significant role in smoother contract authoring. You don’t have to start from scratch when you have a well-built template, and authors can pull in the language needed in an instant.
The result? Consistent, compliant, and fast contracts, every time.
How clauses can be pre-approved
When you’re contract authoring, you can have legal teams review and approve clause language ahead of time. Once these pre-approved clauses are added to the clause library, they’ll make it easier for authors to drop them into whatever contract they need.
The best part is that the contract author will never have to worry about whether the language aligns with internal policies or risk guidelines. Additionally, if you have sensitive or high-stakes clauses, they can be locked so that they can’t be changed during the drafting process.
How fallback clauses or version control works
Because contract authoring can involve negotiation, sometimes the default clause won’t cut it. If you have fallback or alternate clauses available, authors can choose from those variations (already pre-approved) without risking new language.
Version control can help with this by tracking any updates to clauses that are made over time. Whenever someone updates the clause, whether it’s due to a regulatory change or new guidance, the system can activate the new one and archive the old version. This means that authors are always using the most accurate and current language when drafting a contract.
How this helps with risk mitigation and review cycles
With contract authoring, you’re relying on vetted, version-controlled clauses, which means fewer chances for errors or off-brand language being added in.
Review cycles will often speed up too, since the legal team can focus their attention on clauses that were changed or flagged rather than reviewing the entire standard copy. When there’s deviation from the library, your team can easily spot risks and keep the contracts moving along in your workflow.
Easily manage contracts with PandaDoc
Contract authoring is a critical process for creating legally binding agreements.
It ensures clarity, establishes rights and obligations, and minimizes risks for the parties involved.
Using software, such as PandaDoc, can make it much easier, allowing you to create contracts, manage, and sign them all in one place.
By utilizing contract authoring software, businesses can streamline their contract creation process, enhance efficiency, and reduce the risks associated with contract management.
This helps avoid issues such as legal complexity and ambiguity.
PandaDoc offers several features that can assist with your contract lifecycle management, including:
- Integration with your CRM
- Templates to help you create contracts in minutes
- Collaboration between parties via easy document sharing
- Storing and managing documents in one place
Contract authoring software provides solutions to help overcome any and all challenges involved in this process, offering templates, collaboration tools, compliance features, automation, and even integration capabilities.
Why not get started with PandaDoc today?
Disclaimer
PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDocs services are governed by our Terms of Use and Privacy Policy.
Oringally published July 24, 2023, updated November 24, 2025
Frequently asked questions
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Someone who writes or drafts contracts is called a contract author. Some businesses have this work done by legal counsel, procurement specialists, sales ops, or contract administrators.
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The two common types of contract assignments are:
- Assignment of rights: This is the transferring of the benefits or rights under a contract to another party.
- Delegation of duties : This is the transferring of obligations or responsibilities to another party. This often still comes with some liability remaining for the original party.
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The cost of having someone write a contract can vary depending on how complex it is and who’s drafting it.
A simple contract drafted by an attorney could range from $200-$1,000. But more complex contracts could exceed this, ranging from $1,000-$5,000 or more.
Using a contract authoring software, like PandaDoc, can help reduce these costs significantly by providing templates, clause libraries, and helpful automation.
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Contract management software smoothes out the contract authoring and review process. It also helps make sure your contracts are accurate and compliant with pre-approved language while speeding up the drafting process.
With the right tool, your team will have better visibility into versions and approvals, which can be especially helpful when you scale your business.
