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Clause Library Table

This table holds clauses that can be referenced in print templates. There are many ways to use a clause library that vary in complexity. The out-of-the-box setup includes examples of several reasonably simple approaches.

Overview

There are different reasons for using a clause library to hold contract language rather than simply storing all text and variables in the Microsoft Word print template. Here are a few of them:

  • If all source clauses are stored in a library, then if the clause text needs to be changed, it must only be changed in one place, and all print templates or records that use that clause will be updated for future contracts.
  • Clauses may have specific conditions associated with them so that they are only used if some particular meta data exists in the contract.
    • Note that it is also possible to add such conditions to print templates, so that this does not necessarily require a clause library.
  • Workflow can be configured to handle changes to standard language, with approvals, statuses, and so on. Responsibility for maintaining and updating the clause can be assigned to a particular team or clause owner.
    • Alternatively, print templates could also have approvals and statuses if language is managed directly in the print templates.
  • With a clause library, users may be presented with a list of alternative clauses for particular sections or a list of optional clauses that they can select to construct a given contract. A simple version of such selection is built into the contract template to demonstrate these approaches.
  • Some companies want to identify approvers who will need to review a contract based on a particular clause that is changed for a given contract. Approval information can be stored in the source clause to provide approval automation. This typically requires a more complex setup and is not included in the out-of-the-box Clause Library table.

Our out-of-the-box setup is focused on providing the first four benefits. It provides a simple repository for clause language that can then be inserted into print templates, either automatically, or with some user selection.

Use Case

The clause library has several fields to assist in managing the use of language throughout your contracts. The key fields and their usage is as follows:

  • Clause Type - Categorizing clauses makes it possible to filter them if you want to allow users to select from alternative clauses for a specific section of the contract, for instance the termination provisions, or the indemnification provisions.

  • Status - Statuses of Active, Planned, Pending Approval, and Retired or Cancelled can be used to filter available clauses and to indicate where they are in any approval workflow.
  • Clause Usage - indicates how a clause may be used and can also be used as a filter to display optional clauses or user-selected clauses for users to choose, as opposed to conditional clauses that will be populated into the template automatically based on some predefined condition.

  • Clause Priority - is used to sort a drop-down list of clauses that may be filtered and presented to the user. If you have four variants for indemnification, for instance, and you want to display them in a particular order, you would set the Clause Priority with the appropriate values (1 for the highest to appear on the list).
  • Usage Details - this is a text description field to provide details on where and how this clause should be used. It is purely informational.
  • Approval Team - can be used to define the approval team with responsibility for updating this clause.
  • Clause Owner - can be used to indicate a specific person responsible for changes to the clause.
  • Used by Print Templates - allows you to link a clause to the print templates that will use it, to have an audit trail of which templates will or should be updated if the clause language changes.

Clause Form

Below is the default layout for the clause library form:

Action Buttons on the Action Bar

The action bar above the clause table has three special buttons under the Actions drop-down:

The Clone Clause button can be used with one or more clauses to clone them and create a copy. The copies will map most of the field values and will add the date cloned to the clause title. This makes it easy to create copies of a clause for some purpose such as revision, and then to edit the resulting clause.

The Insert Clause Number button adds MS Word code that results in auto-numbering in front of that clause when the clause is used in a print template. This is one method of managing clause numbering within your contracts. See below for more details.

The Remove Clause Number button removes the MS Word code for auto-numbering from the selected clause(s). This is handy if you change your mind about the method to use for numbering.

HTML Field Conversion into MS Word

The Clause Text field is an HTML based field and can use standard HTML formatting tags. To see all formatting options, click the Edit button below the clause text field to bring up the HTML editor.

If you copy and paste clauses into the clause text field from a Microsoft office file such as MS Word or Excel, it is best to use the Cleanse HTML button to strip out some of the excess code that is typically inserted by Microsoft. This will give a cleaner result when the clause is inserted into a print template and converted back into MS Word.

HTML text fields are treated in a special way in Microsoft Word. Depending on specific HTML field characteristics, content may be translated in the Word document to either the Normal or Normal(Web) formatting style. Including <p> codes in the paragraph results in the Normal(web) formatting. It is important to configure any print template in Word to set the same font, size, and spacing style for Normal (Web) as for Normal, or for whatever other main style is used in your template, for consistency. For instance, if your template has some hard coded text, followed by variables that point to specific HTML clauses, you would want to define Normal (Web) to look the same as the hard coded text style.

Methods for Auto-Numbering Contract Paragraphs

There is a challenge in dealing with HTML text within Word - the Normal (web) style typically eliminates any numbering or indenting style that was applied to the clause variable in the print template, leaving the clause text as plain text in the Normal (Web) style.

One of the important decisions when using a clause library is deciding where and how to handle the numbering and style formatting. If your contracts included numbering schemes, these can be handled in the clauses themselves by inserting the MS Word codes for auto-numbering levels, which will be converted to auto-numbered paragraphs when the document is generated, or they may be handled in the print template, by inserting such codes or using a Word table, within certain limitations.

In the standard implementation, we have examples of three kinds of numbering methods. These are managed in the following Print Templates:

NDA Numbered Normal Style is defined to use unnumbered clauses and the Normal style itself is configured in the template to use auto-numbering, so any clause included in the template will be numbered. This does not support subsection numbering.

Default NDA for clauses with numbering is a template without any numbering that is used with a set of clauses that have the Word auto-numbering codes in the clause text field. Putting the numbering codes directly in the clauses permits numbered subsections with the clauses, and there is an example of this for the governing law clause.

NDA clauses using table for numbering uses a Word table with two columns to hold the clauses. The first column has auto-numbering on and manages the number, and the second holds the clause text. The table shows no borders and is therefore invisible to users. This gives a nicely aligned look but can be a bit more challenging for users if they need to do a lot of editing of clauses and aren't familiar with working with Word tables. It does not support subsection numbering.

Agiloft Hosted Agreement with Adobe Sign Tags includes a user selected Governing Law clause (in the contract), and up to four optional clauses selected by the user in the contract (these are put in the final section). It also includes Adobe Sign signature tabs as examples in how to insert such tags.

Hosted Service Level Agreement Docusign Tags has the same Governing Law clause and optional clauses but uses Docusign (hidden) tags in the signing block instead of AdobeSign tags.

The other templates do not use clauses from the clause library at all and are just hard coded examples of print templates with variables.

 

Using the Clause Library in Contract Print Templates

The standard setup of the clause library assumes that clauses may be created for any language that may be used in one or more contract types and print templates. It may make sense to put most of your contract language into the print template and just use the clause library for user-selectable alternative text or optional text. The choice is yours.

If you do not reuse language in multiple print templates, there is really not much advantage to storing it in the clause library. In that case it is simpler to just put your language directly in the print template, where it does not need to be translated back and forth between Word and HTML and where users looking at the print template can see exactly what will be produced. It is easy to provide conditions directly in the print template for alternative or conditional clauses.

As you define your clauses, you can link them to the specific print templates where you plan to use them. Then they will appear within the print template in a related table of Clauses Included, for reference.

Once the clauses are created, you can create a print template that inserts the conditions and the specific clauses you want. Please review Print Template Syntax Reference for details on the syntax to use to insert a clause into a print template.

Allow Users to Select Alternate Clauses

Sometimes, you may want contract managers to be able to select from multiple clause options. There are a few different ways to do this, depending on how many choices they will need to make.

  • If there are only a few user decisions, it may be simplest to add a link to the selected clauses within the contract record, filtered to the choices available. Then whichever clause is selected can be inserted into the print template.
  • If there are many decisions, it may be easiest to just provide questions for the user to answer and then have conditions built into the print template based on the answers given. This makes maintenance of the print template more complex, but may make it easier for the users making the decisions.

We have provided two examples of user selection in the out-of-the-box setup.

Selecting from Alternative Clauses for Governing Law

One is a linked set of alternative Governing Law clauses displayed in the contract on the Attachment tab for specific contact types that use this feature. The user can select which governing law clause to use, and that is inserted into the print template automatically. This is available for the contract types: Customer Service Contract and Vendor Subscription Service:

Selecting Optional Clauses to Add to the Contract

For the same contract types, the user may also select from any optional clauses that have been defined. We have four default optional clauses shown above in the Select Optional Clauses field. The user may select those he wants to add, and when the document is generated, those claues will be added under the section called Additional Terms.

These basic approaches can be expanded upon for a given implementation, depending on the needs of your company.

Conditional Clauses Based on Other Answers

The sample templates also include conditional clauses based on the choice made for the Renewal Type field. If Evergreen is selected, one clause is used, and if a different value is selected, an alternative clause is used that provides both the start and end date of the contract.

More Complex Configurations

If greater control is needed over changes made to clauses within a specific contract, this requires one or two extra tables. In that case, it is generally necessary to have a "Contract Clauses" table that auto-generates new records for each clause linked to a specific contract type, so the contract clause record itself is edited, and then the print template just inserts all the clauses from the table of Contract Clauses.

For such implementations, we recommend that you contract with our professional services team for assistance. There are many variables in terms of requirements that help determine the optimal design.

Workflow

There is currently no automation built out in the clause library, but there are fields that could be used to route approvals for new language to the approval team or the clause owner.

 

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