Contracts are at the heart of domestic and international commerce. If you are a law student, you will study contract law. You will learn, for example, about the requirements for forming a legally binding contract, express and implied terms, misrepresentation, and remedies, among many other things. As a practising lawyer, you may be expected to advise on and negotiate contracts, draft contracts, and so on.
It is important to remember, however, that contracts are not simply a collection of legal principles or words in a document. Contracts are almost always the lifeblood of business and commerce. As such, it is essential to remember that they are not simply documents to be signed and filed away. They need to be ‘managed’ throughout their life, so that they can bring maximum commercial benefit to a business.
Contract management (sometimes called ‘contract administration’) includes everything from establishing the business case for a contract – the justification for it – through to negotiating and entering into the contract and, importantly, to managing and reviewing the contract throughout its performance. The Chief Financial Officer (CFO)  of any company will expect a robust contract management process. As the Chartered Institute of Procurement and Supply (‘CIPS’) say:
“…contract management is the engine that drives true value across the supply chain and should stay with dedicated professionals." 
There are several areas where contract management is vital. For example:
· tracking the ongoing financial impact and costs associated with the contract (for example, the expenses involved in the purchasing aspect (‘the buy side’) of a contract);
· tracking the expected revenue in relation to the sales aspect (‘the sell side’) of any contract;
· paying special attention to when contracts are due to expire. This will ensure that issues such as potential renewal of the contract, or the possible alternatives, are considered well in advance of the expiry date.
Having an effective contract management process, and strategy, is vital to a successful business. These will help a business to maximise its profit potential. Contract management can possibly, in relation to smaller contracts, be done manually. However, Of course, an alternative way of managing contracts effectively - especially in relation to large contracts – is to use appropriate contract management software. On a basic level, such software should – at the very least – be able to do things such as store contract documents, track any changes, search documents, and send key alert dates during the life of the contract.
You will certainly impress a potential recruiter for a summer posting or a legal job if you are familiar with contract law principles and understand how contracts are drafted and so on. However, you will impress them even more if you understand that a contract needs to be managed, why, and be able to show some practical commercial awareness about how this can benefit your clients and their business.
And, if you are interested in staying up to date with contract management issues, an excellent website is contractworks.com which has a regularly updated blog at:
 A Chief Financial Officer (CFO) is the officer of a company who has responsibility for managing the financial affairs of a company. A CFO will have responsibility, for example, for financial planning and the management of financial risks faced by the company.
Find a word, or phrase, in the text which means:
1. Existing within a particular country, as opposed to internationally.
2. Terms in a contract which are not expressly set out in the document.
3. Something which puts right or tries to repair situations – legal reparations.
4. A word describing something which is essential to the success of something.
5. Very strong and healthy.
6. The sequence of processes connected with the production and distribution of goods or products.
7. Financial income, usually of a company.
8. In relation to a document, such as a contract, to come to an end or becomes invalid.
9. A phrase meaning ‘before something is due or expected to happen’.
10. An adverb meaning ‘done by hand’ or done by a person without the use of help of something like a machine or computer.
1. the adjectival (adjective) form (positive and negative) of the verb ‘to remedy’?
2. the adjectival form (positive and negative) of the verb ‘to negotiate’?
3. the noun form of the verb ‘to manage’?
4. the adjectival form (positive) of the verb ‘to benefit’?
5. the noun form of the verb ‘to store’?
2. implied terms
6. supply chain
9. in advance
1. remediable/non-remediable (or irremediable)
© Cambridge Legal English Academy 2021