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Think about how many contracts your company handles in a year. Sales deals, vendor agreements, employment contracts, the list goes on. Each one has its own deadlines, approvals, and obligations.
Without a clear process, it’s easy for details to slip and relationships to suffer.
That’s why breaking contracts into stages helps. It gives structure, keeps everyone aligned, and reduces the back-and-forth that slows business down.
Whether you’re a lawyer, a contract manager, or someone in sales or procurement, knowing the stages means you can catch issues before they turn into problems.
But before we look at the nine stages, there’s a distinction worth making: contract management and contract lifecycle management (CLM). The terms get thrown around interchangeably, yet they don’t mean the same thing.
It’s easy to confuse contract management with contract lifecycle management, especially since terms like “contract management lifecycle” often get used interchangeably. While they share the same purpose (making sure agreements are handled properly), there’s a key distinction.
Contract management is the broader concept. It refers to all activities tied to agreements, from drafting and negotiations to contract execution and tracking contractual obligations.
Even situations where a contract never reaches signature still fall under contract management, because the work was part of the process.
Contract lifecycle management, by comparison, is a structured approach within that broader category. It divides work into defined stages, guiding contracts through drafting, approval, signing, performance, and renewal with the help of technology.
CLM is designed for efficiency, but it’s not the only way to manage contracts. In simpler terms, CLM is a method, but contract management covers the entire process.
Organizations that focus on effective contract management, whether through CLM software or other structured practices, are better positioned to reduce risk, stay compliant, and get more value from every agreement.
While CLM is one structured way to manage agreements, contract management as a whole covers far more ground. To understand how it works in practice, it helps to break it down step by step.
The contract process begins with a request. This is the point where someone identifies the need for an agreement. For example, sales might need a customer contract, HR could be preparing an offer letter, or procurement may be setting up terms with a new supplier.
Getting intake right matters because it lays the groundwork for smooth contract creation. If details are missing at this stage, the process slows down, and legal teams have to chase information later.
When you collect the right inputs upfront, the drafting phase can move forward without unnecessary delays.
Key information often includes the purpose of the agreement, timelines, deliverables, and any special requirements. Identifying the parties involved early also helps avoid confusion down the line.
Many organizations use standardized forms, intake tools, or even standardized contract templates to make sure these essentials are captured consistently.
Once the contract request is clear, the next step in the stages of contract management is drafting. In this stage, the first version of the agreement takes shape.
Traditionally, drafting meant starting from scratch or recycling old documents. Today, contract generation is much faster thanks to templates, clause libraries, and AI-powered tools.
The goal is to draft contracts that are accurate, consistent, and aligned with business goals. Getting it right early prevents long back-and-forth later in the contract process. The best drafts use approved language, minimize errors, and capture the key terms agreed upon during intake.
Modern platforms like Aline AI make this even easier. With AI contract drafting, you can generate entire agreements, letters, or policies in minutes.
The system also supports redlining, contract playbooks, and smart suggestions that keep language consistent across teams. That means legal, sales, and operations all work from the same foundation without wasting time.
Get started with Aline and simplify every step of contract generation.
After drafting, contracts move into review and redlining, a stage that can make or break the timeline. In many organizations, this step has traditionally relied on manual processes like emailing Word documents back and forth, which often creates version confusion and delays.
But with modern contract management software, this stage becomes more efficient. Teams can collaborate in one place, track edits in real time, and reduce the risk of missing important details during the contract review workflow.
The focus here is on making sure the contract terms are fair, compliant, and aligned with company policies.
Common tasks during this stage include:
Since multiple departments are often part of this stage, clear workflows help prevent bottlenecks. Tools that support side-by-side comparisons and redline tracking give everyone visibility, so contracts don’t stall or lose consistency.
Getting a contract approved is the point where the deal either moves forward or stalls.
During the contract approval process, the document has to pass through the right hands. This includes legal professionals checking for hidden legal risks, finance reviewing costs, and business leaders making sure the agreement supports the overall business relationship.
The challenge is that different voices often want different things. That’s where a contract manager adds real value. They track the approval status, coordinate feedback, and make sure the document lands on the desk of the right authorized representatives without unnecessary delays.
When done well, approvals don’t drag on for weeks. They provide confidence that the terms are sound, the business is protected, and everyone understands what’s being signed.
Execution is the stage where an agreement finally becomes real. After all the reviews and approvals, signatures turn a draft into a binding document. This step is sometimes referred to as contract initiation, since it’s the moment the agreement officially starts.
In the past, execution often meant printing, mailing, or scanning pages, which often caused delays that frustrated everyone involved.
Today, electronic signature software makes the process much faster by allowing relevant stakeholders to sign from anywhere and keep the deal moving.
Execution also marks the start of contract administration. Dates, deliverables, and obligations now need to be tracked, which means legal, finance, and business teams must all know the agreement is active.
Good systems will notify stakeholders, store the signed contract securely, and prepare for the next stage in the process.
After a contract is signed, the focus shifts from paperwork to performance. Managing contracts at this stage means making sure every promise in the agreement is carried out as planned. This is the role of obligation management.
The central goal is to keep track of what was agreed, when it’s due, and who’s responsible. Without proper contract monitoring, deadlines get missed, deliverables slip, and payments fall behind.
Some of the most common practices include:
Treating obligations as active commitments turns contracts into tools for accountability. This stage moves agreements from paper to practice and gives teams the visibility they need for smarter decisions later.
Contracts aren’t static. Over the course of the contract lifecycle process, agreements may need updates to reflect new conditions, regulations, or business realities. This stage focuses on ongoing management so that documents stay relevant and enforceable.
Amendments can arise for many reasons, including:
Handling amendments properly is important because every change needs to be documented. Without a clear audit trail, it becomes difficult to prove what was agreed or to settle disagreements later.
Well-managed updates also reduce the need for lengthy contract negotiations, since small adjustments can be captured without rewriting the entire document.
At this stage, communication is key. All parties need visibility into changes so no one is caught off guard. When you treat amendments as a standard part of ongoing management, it's easier to maintain clarity, protect relationships, and keep contracts aligned with real-world needs.
Every agreement eventually reaches a point where a decision has to be made: renew it, renegotiate, or bring it to a close?
This stage of the process revolves around looking at performance against obligations and deciding what comes next. Tracking renewal dates is critical here, since missed deadlines can lock a business into terms that no longer make sense.
Renewal often involves reviewing pricing, delivery expectations, and service level agreements to confirm they still meet business needs.
Termination, on the other hand, requires a proper contract close-out, which includes documenting the end of the agreement, checking for outstanding payments or services, and confirming legal compliance. Both paths are about protecting the organization’s interests while maintaining legal validity.
For example, a company may choose to renew a vendor contract but renegotiate the delivery schedule after reviewing past performance. Another contract may be terminated because the supplier consistently failed to meet agreed service levels.
In both cases, decisions are made with reference to earlier stages of the contract, which helps ensure continuity and accountability.
The final stage of the entire contract lifecycle is reporting and analysis. This is where you take everything that happened during the agreement and turn it into insights you can actually use.
For legal departments, it’s a chance to evaluate performance, highlight risks, and improve the way future contracts are handled.
With a solid contract management platform, you can identify broad trends and generate reports that keep key stakeholders informed. These insights show not only what went right, but also where adjustments are needed to avoid problems down the road.
Here are a few areas worth tracking:
When you monitor these factors, you put yourself in a stronger position to mitigate risk, negotiate better terms, and show leadership the real impact of contracts.
In other words, reporting and analysis close the loop, which turns agreements into valuable data you can act on.
At this point, you’ve seen how the different stages connect to form a complete process. The question is: how do you manage everything without relying on scattered spreadsheets, endless email threads, or misplaced files?
Aline offers an answer.
Aline is a contract lifecycle management software designed to support each stage of the process. Drafting, approvals, execution, and reporting all happen in one place. What you get is clearer visibility and stronger control over your contracts.
Some of the features that make Aline stand out include:
Aline keeps contracts accurate, accessible, and simple to manage throughout their lifecycle, so you can focus on the work that matters most.
Experience Aline with a free trial and keep your contracts organized from start to finish.
Different sources list the stages in slightly different ways, but the common framework includes request, drafting, review, approval, execution, and tracking. Each of these steps contributes to stronger contract visibility and smoother contract workflows across the organization.
The 5 C’s, clarity, completeness, consistency, compliance, and communication, act as a quality check for every new contract. They make sure agreements are written clearly, meet business needs, and align with regulatory compliance standards.
Levels usually refer to how deeply an organization manages agreements. At the basic level, teams may still rely on manual contract management, while advanced teams use a contract management tool to manage the entire lifecycle, from initiation to renewal.
The legal side of contracting is often broken into four stages: offer, acceptance, consideration, and intent to create legal relations. These steps form the foundation for enforceability and impact both the negotiation process and overall contract performance.
Brent is an attorney, a full-stack JavaScript engineer and the CEO of Aline.
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