Solid contract and proposal approval processes are crucial when it comes to protecting your business from legal and financial risks. When contract editing and approval processes are poorly managed, you’ll likely end up with costly mistakes.

Edits should always be tracked just like approvals should be clearly documented. When they’re not, your business could be exposed to disputes, missed obligations, or even possible lawsuits. Think about it: just one unauthorized change can make a big difference in a contract, altering the scope, pricing, and risk involved.

That’s why you need a transparent process for how contracts and proposals are reviewed and approved.

In this article, we’ll cover everything you need to know about protecting yourself from contract approval liability so you can trust your business is safe.

Understanding liability in contract and proposal management

When it comes to contract and proposal editing, legal liability is the responsibility a business assumes when it doesn’t adhere to terms that were agreed upon or regulatory requirements.

So, what does this mean? If there is no proper review or approval when a contract is changed, your business could be held accountable for those changes, even if those changes were unintentional by the decision-maker.

Your business could also be seen as liable if a contract contains ambiguous language, outdated versions, or fails to include the appropriate stakeholders when needed.

Bonus: Want to dive a little deeper into contract lifecycle management to protect yourself from legal penalties and potential losses? Read our guide here.

Common liability risks in the editing and approval process

  • Unauthorized edits or changes – If too many people have the ability to edit a document, it can be tough to prevent any unauthorized changes. This is important to keep in mind because even small changes in wording can completely change the meaning of a clause, and can even result in unintended commitments. 
  • Missing or outdated approval documentation – If you don’t have clear approval logs, you’ll struggle to prove changes were actually vetted and accepted with the proper processes. Thai can create legal issues during an audit or dispute. 
  • Miscommunication among stakeholders – Contract language can easily be misinterpreted across different departments, and this can also lead to certain parties approving conflicting changes. This can mean inconsistent or contradictory terms. 
  • Version control errors – It’s easy for stakeholders to accidentally approve or sign the wrong version of a contract if multiple versions are circulating at the same time. This could lead to invalid or unenforceable agreements. 

Want to better protect your business? Read more about five common contract management risks here so you can do just that.

Best practices to reduce liability during editing and approvals

Now that you have a little bit of background on the liability risks in contracts, let’s dive into some best practices that will help you reduce liability during editing and approval processes.

Use a centralized document management system

If you have a dedicated platform for document management, you’ll make sure that only the most recent and up-to-date version is accessed and edited. This means less confusion and duplication.

Track changes with version history, audit trails, and content locking

Being able to see who made changes and when offers helpful transparency. Plus, locking certain sections of a contract will help prevent unauthorized edits, making sure the document is compliant.

Assign clear roles and responsibilities

You should make it clear which stakeholders are responsible for what when it comes to reviewing specific sections of a contract. You also want to align on who has the final approval authority.

Implement approval workflows

If you have a structured approval workflow, you’ll be able to make sure all changes go through the right reviewers before the document is finalized and moves forward to the next stage.

Bonus: What is contract management? The fundamentals to run your business.

Tools and technologies that offer protection

Having the right tools work for you is key. Contract management software and eSignature tools like PandaDoc can help you to centralize your documents, control access, and automate your approval workflows. Because it offers built-in version tracking and audit trails, you’ll always know who made changes to your contracts and when.

Collaborative document management systems also help streamline communication, which makes it less likely for misinterpretation. Plus, they help make the entire contract process faster and more accurate, saving valuable time for your teams so they can focus on closing deals.

Just like our client, KarmaCheck, who switched from Docusign to PandaDoc. Our solution helped them consolidate tools, automate approvals, and make compliance much easier.

What does that mean for them? Contracts are signed faster with 20+ hours saved weekly, and they can meet their regulatory requirements much easier than their previous process.

“As an Ops professional, trusting the tech you bring into a business is everything. It needs to work, scale, and actually deliver results — and PandaDoc has done that on all fronts. If you’re looking for a solution that’s not just software, but a true partnership, you won’t find anything better than PandaDoc.”

– Allie Blech, Director of Operations at KarmaCheck

Establishing a liability‑safe editing protocol

Your team should have a clear roadmap for handling contracts and proposals in a legally sound way. With structured safeguards in place, you’ll minimize risks and prevent mistakes that can cost you big before they even happen.

Create standardized templates for contracts and proposals

Templates are a great way to reduce variability and make sure you’re using the most updated and legally compliant language in your contracts and proposals. Check out PandaDoc’s extensive template library here!

Train employees on legal risk and approval policies.

Training is highly important to make sure your employees understand how and when to get approvals, so make this education a priority across your teams.

Develop a checklist for final approval.

It’s helpful to have a simple approval checklist to make sure no steps are skipped and all stakeholders have reviewed the latest version of a document.

Seek legal counsel for high‑risk agreements.

If you’re dealing with a complex or high-value contract, it’s always worth consulting a legal expert during the drafting and editing stages to make sure all liabilities are identified and mitigated.

How teams can edit safely

Here are a few things you can do to make sure your teams are editing documents safely:

  • Use role‑based access permissions: Restrict editing access to only those who are responsible for that section of the contract.
  • Use collaborative platforms with lock features: Tools like PandaDoc are helpful as they allow you to lock sensitive sections, meaning other users can comment but not alter key clauses.
  • Communicate changes within teams: If changes have been made, it’s a good idea to give clear summaries of those alterations so that everyone understands what’s been modified before approval. 

Not all contracts need a full legal review, but this depends on the type of agreement. If you have an agreement that involves regulatory compliance issues, intellectual property, large financial commitments, or long-term strategic partnerships, it’s a good idea to get a legal expert on board. That way, they can review any edits for risk exposure so that you can best protect your business’s interests.

The bottom line

Contract approval liability should be top of mind when making any kind of deal. But being proactive using effective document management, structured approval workflows, and taking advantage of the right tools (like PandaDoc), you’ll be less likely to make expensive mistakes.

PandaDoc makes it easier to edit and approve contracts safely so you can protect yourself from liability. Ready to see how it works? Request a free demo today.

FAQ

What happens if a proposal is edited after approval?

If a proposal is edited after approval without the right documentation or re‑approval, it could invalidate the agreement and expose your business to liability. That means you should always make sure any post‑approval changes are re‑submitted for review and approval.

Can email approvals be legally binding?

Email approvals can be legally binding in certain jurisdictions, but they are typically harder to verify and track. It’s best to use a formal approval workflow within a contract management platform like PandaDoc so that all your approvals are clearly documented and auditable.