A typical contract authoring process requires collaboration amongst multiple departments of the contracting firms, such as procurement, finance, and legal, to draft and vet the clauses/sections of the contract. With each clause/section undergoing multiple reviews/updates via multiple collaboration tools, there is a risk of incorrect updates being made to the documents, or certain edits getting missed out, voluntarily or involuntarily, while finalizing the contract. All of this can lead to serious issues in enforcing the contract in future and potential litigation between the parties concerned. Further, the lack of ability to trace each update made to the contract, as well as the user who has made the update, can further complicate the matter, in the event of litigation, making it crucial for organizations to find a solution that can help eliminate these challenges.
Contract Authoring on Blockchain
A private, permissioned blockchain ecosystem wherein individual departments are connected as nodes, with privileges assigned to access and update specific sections of the contract is the need of the hour for organizations looking to ensure greater transparency in operations. Using the Contract Authoring solution from Quartz, organizations can access the contract, with all the clauses/sections stored on blockchain, and the entire authoring process carried out on the distributed ledger.
The solution ensures that every change made to the contract is captured with user, time stamp information and the finalized version of the contract is cryptographically stored on the blockchain, thereby ensuring that it is tamper-proof. The ecosystem supports multi-party contracts and can be extended in future to manage project execution on blockchain. In addition, the solution lends itself well to manage other types of critical documentation – for example land register records, patient medical records etc, where immutability of records and authenticity of information need to be guaranteed to eco-system participants, in order to create trust and transparency.
- Non repudiation of contract clauses and terms by participating entities since the complete audit trail is available on blockchain and traceable
- Immutability of records , combined with digitization for seamless access
- Contract terms cannot be tampered with, and possibilities of frauds can be eliminated as the same tamper-proof contracts accessible to all the connected entities
- Greater transparency, offering a real-time view of clauses/sections to all the parties
- Audit Trail for end-to-end tracking of changes to contract terms and conditions
- Standardization through templates: Quartz supports generation of templates comprising multiple clauses/sections
- Contracts can be created by simply cloning a template on blockchain, thus saving time
- Data Privacy through Smart Contracts: Quartz ensures data confidentiality, as each node/ department will only have access to clauses/sections relevant for them
- Administration and monitoring of the ecosystem through the Command Center