Setting Up Contract Operations: A System Instead of One Template

Many companies begin their contract management process with the request: “We need a standard contract.” A lawyer prepares the document, the parties sign it, but during the performance of their agreements, employees continue to act as they are used to: a manager changes deadlines in a messenger, a technical specialist performs work without a checklist, and the acceptance certificate is sent to the counterparty several weeks later.

The problem arises when the buyer refuses to sign the documents or make the final payment. Even a well-drafted contract will not automatically help if the company cannot demonstrate who performed the obligations set out in it, when they were performed, and to what extent.

Let us look at how to establish a contract management process using the supply of industrial equipment as an example.

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The Equipment Was Delivered, but the Final Payment Was Not Received

An industrial equipment supplier approached us. The buyer paid an advance, received the equipment, signed the delivery note, and began using it.

The contract also provided for commissioning works and training for the buyer’s staff. The supplier’s engineer visited the buyer, configured the equipment, and conducted the training. After that, the company continued to provide consultations, and its specialist visited the buyer again.

However, the parties did not sign the commissioning and training acceptance certificates. The buyer claimed that the supplier had not fully fulfilled its obligations, refused to pay the remaining amount for the equipment, and filed a lawsuit.

For the supplier, the issue was no longer just whether the relevant work had been performed. It was necessary to prove:

• what exactly was included in the agreed scope of commissioning and training;
• what actions the engineer had actually performed;
• which of the buyer’s employees had participated in the training;
• what remained incomplete and why;
• whether the buyer had raised any specific objections;
• whether the technical problems were related to the supplier’s actions;
• when the final payment became due.

The contract specified commissioning and training, but the parties had not agreed on a detailed programme, completion criteria, or a procedure for documenting objections. As a result, even the outcome the supplier was required to deliver became a subject of dispute.

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Why One Contract Was Not Enough

A contract does not perform itself. Its provisions must correspond to the company’s actual processes.

If the contract requires an acceptance certificate, employees must know who prepares it, when it is sent to the counterparty, and how a refusal to sign is documented. If the company provides training, its programme, duration, responsible persons, and method of evaluating the results must be determined in advance.

Otherwise, once a dispute arises, the company tries to reconstruct the evidence after the fact: collecting correspondence from different phones, searching for business trip documents, and asking employees what they did several months earlier.

Therefore, contract management should begin not with editing a template, but with documenting how contracts are actually performed within the company.

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How Contract Management Should Work in Practice

Step 1. Describe the actual process

First, establish how the company actually works with the counterparty: who receives the order, agrees on the technical requirements, organizes delivery, performs the work, communicates with the buyer, and monitors payment.

At the equipment supplier’s company, we separately described the processes for delivery, commissioning, training, technical support, and acceptance of completed work.

This made it possible to identify gaps that cannot be detected by reading the contract alone.

Step 2. Formalize the process through internal documents

For recurring operations, it is advisable to approve internal instructions, regulations, programmes, and checklists.

In this case, the following documents were prepared for the company:

• instructions for conducting commissioning works;
• instructions for training the buyers’ staff;
• a commissioning checklist;
• a training checklist;
• standard commissioning and training acceptance certificates;
• orders approving the internal documents.

A checklist is not just a formality. It shows exactly which operations the employee performed, when they took place, who was present, and what objections arose.

Step 3. Align the contract with internal documents

The mere approval of an instruction by the company does not make it binding on the buyer. The contract must refer to a specific document, identify its version, and confirm that the buyer received it before signing the contract.

For example:

“The procedure and scope of commissioning works are determined by the Instructions for Conducting Commissioning Works, approved by the Supplier’s Order dated ___ No. ___. The Buyer confirms that, before entering into the Contract, it received and reviewed the current version of the Instructions”.

This reference links the contract to the company’s actual procedure. At the same time, the supplier must not unilaterally apply a new version of the instructions to a contract that has already been concluded unless the parties have separately agreed to this.

Step 4. Establish the acceptance procedure and the submission of objections

The phrase “the work is accepted under an acceptance certificate” is not enough. It is necessary to specify:

• who sends the acceptance certificate and within what timeframe;
• how much time the counterparty has to review it;
• what form the objections must take;
• what happens if the buyer does not respond;
• what evidence confirms that the work was actually performed.

One of the mechanisms we use in contracts is:

“The Buyer shall, within three business days of receiving the acceptance certificate, sign it or provide reasoned written objections specifying the particular items of the agreed programme that have not been completed. If the signed acceptance certificate or reasoned objections are not provided, the Supplier has the right to draw up a unilateral acceptance certificate and attach evidence of the actual performance of the work.”

This provision does not replace performance of the obligation and does not guarantee an automatic victory in a dispute. It establishes a clear procedure and prevents the counterparty from limiting itself to a general statement: “We are not satisfied with the work.”

Step 5. Collect evidence during contract performance

The acceptance certificate should not be the only evidence. Depending on the type of contract, the company may keep:

• employee checklists and reports;
• correspondence with the counterparty;
• business trip documents;
• photos and videos of the work being performed;
• equipment configuration logs;
• lists of training participants;
• training completion certificates;
• proof that acceptance certificates were sent;
• the counterparty’s objections and responses to them.

The basic rule is simple: evidence must be created during contract performance, not after receiving a claim or lawsuit.

Step 6. Link payment to verifiable events

Do not make the final payment unconditionally dependent solely on the buyer’s signature. Otherwise, the counterparty effectively has the ability to postpone the payment due date at its own discretion.

The contract must specify which event confirms completion, when the acceptance certificate is sent, how much time is allowed for objections, and when the obligation to pay for the goods or work arises.

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What Courts Consider When an Acceptance Certificate Is Not Signed

In its ruling of September 4, 2023, in case No. 910/5352/21, the Supreme Court emphasized that the absence of a signed acceptance certificate does not, in itself, constitute conclusive evidence that services or work were not provided.

The court must assess whether the business transaction actually took place and consider the entire body of evidence. A customer’s unjustified evasion of signing acceptance certificates should not automatically release the customer from the obligation to pay for the result actually received.

However, this conclusion works both ways. A unilateral acceptance certificate does not automatically confirm that the work was performed either. The supplier must provide evidence of the actual scope of work, its compliance with the contract, and the delivery of the documents to the buyer.

That is why internal instructions, checklists, acceptance certificates, and rules for storing correspondence must operate as a unified system.

How to Audit Your Company’s Contract Management Process

Ask the employees responsible a few questions:

• Does the standard contract reflect how the company actually fulfils orders?
• Are responsible persons designated at every stage?
• Are approved programmes, instructions, or checklists in place?
• Do employees understand what evidence they must create and retain?
• Are the deadline and procedure for the counterparty to submit objections established?
• Can the counterparty block payment simply by refusing to sign an acceptance certificate?
• Is it possible to reconstruct the complete history of contract performance six months later?

If several questions have no clear answers, the company needs more than another revision of its template. It needs a comprehensive contract management system.

How We Can Help

As we did for the equipment supplier, we prepare instructions, checklists, and contract clauses tailored to each client’s specific business processes. These are not standard templates, but documents designed to work in practice if a case goes to court. As part of our Contract Management Setup for Businesses service, we:

• analyze the actual process of concluding and performing contracts;
• identify legal and organizational gaps;
• allocate responsibilities among employees;
• prepare or update internal regulations, instructions, and orders;
• develop contracts, appendices, acceptance certificates, and checklists;
• establish procedures for accepting results and submitting objections;
• create a system for recording and storing evidence;
• help implement the prepared documents in the company’s operations.

The result is a clear system for employees to perform contracts, managers to monitor the process, and the company to substantiate its position before a counterparty or court.

If your company regularly enters into contracts and wants to reduce the risk of disputes with counterparties, the process should begin not only with a contract template, but with setting up the entire contract management system. Leave it to us!