This article will provide you with an overview of obligations in Ironclad.
What are Obligations in Ironclad CLM?
Once a contract is signed, obligations define required actions for each party, ensuring compliance and outlining consequences for non-fulfillment. Each obligation has an owner, status, and type.
Ironclad offers the ability to create, manage, and track obligations using predefined types and properties. You can create structured obligations from archived contract records using predefined out-of-the-box obligation types. To ensure accountability, you can assign ownership to other Ironclad users and modify key details such as type, name, description, status, and owner. A centralized Obligation dashboard provides a comprehensive view of all obligations, allowing you to filter by key properties and save custom views for quick access.
How Do I Configure and Use Obligations in Ironclad?
Obligation Permissions
Obligation permissions in Ironclad are tied to repository record access. To create or own an obligation, a user must have at least edit access to the related record in the repository. When a legal or operations user assigns an obligation, Ironclad automatically checks if the assignee has edit access to the record. If they don’t, the assigner will receive an error message notifying them that the assignee lacks the permissions. Users with workflow/record view permissions can see all linked obligations but can only edit the ones they own. Those with edit permissions can modify or reassign obligation ownership.
Obligations Dashboard
You can manage obligations using the Obligations Dashboard. Here, you can add, view, and edit obligations. You can also filter your obligations and create saved views for easy reference.
Obligations within a Record
When an obligation is created, it is linked to a record within Ironclad. You can click on any workflow/record, and then click on the associated document. The document displays.
From here, you can click the Obligations tab located on the right and view a list of the obligations associated with that contract, as well as edit, delete, and add obligations. Refer to Create and Manage Obligations to learn more.
Obligations and Entities
In Ironclad CLM, entities serve as a single, unified hub for all the organizations or counterparties you engage with, such as companies, contractors, educational institutions, and other collaborators. This enables quick contract creation and provides insights about your counterparties. You can easily understand your overall relationship with a company and find recently signed contracts.
When creating an obligation, it is linked to a record within Ironclad. If the workflow/record has an entity assigned to it, the obligation is automatically associated with that entity. In the Entities Dashboard, you can select an entity and navigate to the Obligations tab to view all obligations tied to contracts linked to that entity. Obligation permissions follow the associated contract’s permissions. Obligation permissions are inherited from the associated workflows/records. This tab may not be available in your Ironclad instance.
Common Use Cases for Tracking Contractual Obligations
Tracking contractual obligations ensures compliance, mitigates risk, and optimizes business operations. Whether on the buy-side or sell-side, effective obligation management helps you meet deadlines, enforce terms, and maintain strong business relationships. The table below outlines key obligation types, real-world use cases, and how they impact both your organization and service providers.
| Obligation Type | Example Use Case | For Your Organization [Buy-side] | For the Service Provider [Sell-side] |
|---|---|---|---|
| Payment | A software company must pay a cloud service provider $10,000 quarterly for hosting services, with payments due within 30 days of invoice receipt. | Track payment deadline to prevent late payment penalties | Trigger invoicing on time |
| Discount | A retailer receives a 5% discount on all orders from a supplier if annual purchase volume exceeds $1 million. | Track progress toward volume thresholds to optimize purchase timing | Track qualification criteria of discounts & monitor volume thresholds to optimize renewal discussions |
| Milestones | An IT implementation project has five payment milestones tied to specific deliverables. | Track deliverables against milestone completion dateRelease milestone payments | Align resources with project deadlines and trigger billing upon milestone delivery |
| Performance | An IT vendor guarantees 99.5% system availability with 4-hour response time for critical issues. | Track performance metrics for regular vendor business review | Track performance metrics against contractual commitments to proactively work on remediation |
| Regulatory | A financial services provider must complete annual certifications and regulatory filings. | Monitor vendor’s compliance for risk assessment | Track documentation & submission deadlines to avoid penalties |
| Reporting | An investment fund manager must provide quarterly investor reports within 45 days of quarter-end. | Track receipt of reports and escalate overdue reports for follow ups | Track report creation deadlines for project planning |
How Do I Get Started?
To get started with obligation management, we recommend walking through the following help center articles:
- Create and Manage Obligations
- View an Entity’s Associated Obligations
- View a Record’s Associated Obligations