The problem with contract approval
Contract approval is one of the most common processes in any company — and one of the most disorganized. The contract arrives by email, someone forwards it to legal, legal returns it with comments, finance asks for information nobody collected at the start, and by the time it reaches a director, the vendor deadline has passed.
The result: rework, delays, contracts signed without proper analysis and, in the worst case, financial commitments the company should not have made.
The good news: this process has a predictable structure. With 7 well-defined stages, you cover everything from initial request to archiving and validity control. This article presents a complete, ready-to-implement template.
Overview of the 7 stages
- 1Request — The requester logs the request with all necessary information
- 2Legal review — The legal team reviews terms and flags risks
- 3Financial review — Finance validates budget and payment terms
- 4Negotiation — Back and forth with the counterparty to adjust terms
- 5Approval — Final decision based on value thresholds
- 6Signature — Collection of internal and counterparty signatures
- 7Archive and validity — Storage of signed document and renewal alerts
1. Request
The request stage is where everything begins — and where most problems originate. If the requester does not provide complete information, every subsequent stage is delayed.
Required fields: - Contract type (service, supply, license, lease, partnership) - Estimated total value - Vendor or counterparty (name, tax ID, contact) - Desired validity period - Justification for the contract - Cost center or requesting department
Required documents: - Commercial proposal or vendor quote - Contract draft (if available) - Terms of reference or scope of service
Owner: Requester (any authorized employee)
Suggested SLA: 1 business day for complete submission. If the form is returned for incomplete information, the deadline resets.
2. Legal review
Legal receives the request and reviews the contract from a legal perspective. This stage is not just clause revision — it is risk identification that could affect the company.
Required fields: - Legal opinion (free text) - Risk rating (low, medium, high) - Modified or suggested clauses - Identified issues
What legal reviews: - Termination and penalty clauses - Liability and damage limitation - Intellectual property and confidentiality - Data protection compliance (if personal data is involved) - Jurisdiction and applicable law - Unusual or abusive clauses
Owner: Legal analyst or in-house counsel
Suggested SLA: 3 business days for standard contracts. 5 business days for high-value or complex contracts.
3. Financial review
While legal looks at legal risk, finance validates whether the contract fits the budget and whether payment terms are acceptable.
Required fields: - Available budget in the cost center - Cash flow impact - Proposed payment terms (lump sum, installments, recurring) - Budget approval (yes/no)
What finance reviews: - Whether approved budget exists for the contract - Whether payment terms are compatible with cash flow - Whether accounting provisions are needed - Comparison with similar past contracts
Owner: Financial analyst or controller
Suggested SLA: 2 business days.
4. Negotiation
With legal and financial opinions in hand, the negotiation stage begins with the counterparty. Not every contract goes through this phase — standard vendor contracts may proceed directly to approval.
Required fields: - Negotiation points (list of requested changes) - Current contract version (revision number) - Negotiation status (in progress, awaiting counterparty, completed)
Owner: Requester with legal support
Suggested SLA: 5 business days. When involving an external counterparty, the timeline may vary, but a deadline is important to prevent indefinite negotiation.
5. Approval
The approval stage follows value thresholds. Who approves depends on how much the company is committing.
Suggested thresholds: - Up to $10,000: department manager approval - $10,001 to $100,000: director or VP approval - Over $100,000: executive committee or board approval
Required fields: - Decision (approved, rejected, returned for adjustments) - Justification (mandatory for rejection or return) - Approval conditions (if any reservations)
Owner: Approver per threshold
Suggested SLA: 2 business days for manager. 3 business days for director. 5 business days for committee.
6. Signature
With approval complete, the contract goes for signature. This stage seems simple, but it is where many processes stall — especially when the counterparty delays returning the signed document.
Required fields: - Signature method (digital or physical) - Internal signature date - Counterparty signature date - Status (awaiting internal signature, awaiting counterparty, completed)
Owner: Legal or administrative
Suggested SLA: 2 business days for internal signature. 5 business days for counterparty signature (with follow-up every 2 days).
7. Archive and validity
The contract is signed. Now you need to ensure it is accessible, that deadlines are tracked, and that nobody misses the renewal date.
Required fields: - Validity start date - Validity end date - Renewal alert (days before expiry) - Renewal type (automatic, via amendment, non-renewable) - Original document location (physical or digital)
Owner: Legal or contracts department
Suggested SLA: 1 business day for archiving after complete signature.
Common variations
Not every contract goes through all 7 stages. Some scenarios allow simplification:
NDA (non-disclosure agreement)
The NDA is a simple, usually standardized contract. The flow can be reduced to 4 stages: Request, Legal review, Signature and Archive. Financial review is unnecessary (zero value) and negotiation rarely happens when the company uses its own template.
Contract amendment
When it involves changing an existing contract — value, term or scope — the negotiation stage is usually simplified, since the parties already have an established relationship. The focus falls on the legal review of the new terms and approval per the incremental value threshold.
Contract renewal
Contracts with scheduled renewal should trigger the process automatically, at least 60 days before expiry. The renewal flow skips the request and negotiation stages (unless there is an unexpected adjustment) and focuses on updated financial review and approval.
How to implement in CaseFy
This template is available in the CaseFy marketplace. When you install it, you get:
- 7 configured stages with allowed transitions between them
- Custom fields in each stage (contract type, value, vendor, opinions, decision)
- Automations to notify owners when a case reaches their stage
- Validity alerts configurable for active contracts
- External form so internal requesters can submit requests without accessing the full system
You can adapt the template to your context: add or remove fields, change approval thresholds, configure SLAs per stage, and create variations for NDAs, amendments, and renewals.
The result is a contract approval process that works predictably, with complete traceability and without depending on emails or spreadsheets.