Explore Contract Types, Actions, and Lifecycle States

Learning Objectives

After completing this unit, you’ll be able to:

Define contract types.
Describe the contract state model.
Explore contract actions.
Discuss the contract lifecycle.

Before You Start

Before you start this module, make sure you complete the following content. The work you do here builds on the concepts and work you do in that content.

Salesforce Contracts Foundations

Meet Contract Lifecycle Management

In the Salesforce Contracts Foundations module, you explored the benefits and capabilities of Salesforce Contracts. You learned that digital contract management simplifies and expedites the sales process. With this knowledge, you’re ready to get hands on with the app.

Cloud Kicks is a sneaker company that overhauled its sales process with Salesforce Contracts. Candace Evans, a sales rep at Cloud Kicks, collaborated with the Salesforce administrator to set up the solution.

Candace, sales rep at Cloud Kicks.

Thanks to Salesforce Contracts, Candace and her team spend more time closing deals and less time wading through contract documents. Other departments, including legal, operations, and finance, are also loving the efficient, collaborative platform.

Now let’s take a step back. How did the Cloud Kicks digital transformation happen? And how does the app handle contracts and contract data? In this module, you explore contract types, state models, contract actions, the contract lifecycle, and ways to analyze and visualize contract data. Follow along as Cloud Kicks begins its digital transformation with Salesforce Contracts.

Contract Types

A contract is a written or spoken agreement that’s enforceable by law, and is usually related to employment, sales, or tenancy. Businesses can work with several types of contracts, such as sales contracts, nondisclosure agreements, and partnership agreements. Using contract types in Salesforce Contracts, Candace manages many contracts under one Salesforce org.

The contract type references intended users, defines the contract stages and approval processes, and can include specific templates. For each line of business, you can set up a different contract type and associated lifecycle.

When you create a contract, Salesforce Contracts derives the contract type from the Contract Record Type field. A contract record can belong to only one contract type. The default type is typically associated with the contract lifecycle management record type. To create a new type, you can clone the default type and modify it.

State Model

The state model or object state definition defines the valid states and transitions between states that a contract can progress through during its lifecycle. Use the model to automate the development of a contract from one state to the next and the actions available to users at each stage. In Salesforce Contracts, all contracts use the default object state definition, which you can customize for different contract types. This definition determines the contract lifecycle for each contract type. Once contract types are in place, different lines of business can refine the state model to fit their workflow.

Diagram corresponding to the following description of state models A and B.

Assume that Cloud Kicks creates two contract types, A and B. Contract type A uses state model A and includes contracts 1, 2, and 3. The lifecycle of this state model includes Draft, In Progress, and Activated. Actions A1 and A2 move contracts from one state of the lifecycle to the next.

Similarly, contract type B is associated with state model B and includes contracts 4 and 5. The lifecycle of this state model includes Draft, Internally Approved, Negotiation, Final Approval, and Activated. Actions B1 and B2 move contracts through the lifecycle states.

In both models, the contract types have different Docusign and configuration settings.

Dynamic Contract Actions

Dynamic contract actions control the valid actions and operations for each contract state based on the object state definition.

Let’s explore the dynamic contract actions available in Salesforce Contracts.

Custom Dynamic Contract Actions

Along with standard contract actions, use Salesforce Contracts to create custom dynamic actions and meet specific state model requirements. You can configure these custom actions using an Apex class or Omniscript. The object state action definition sets the type of action, such as Apex or Omniscript, and what the action does when it runs.

Contract Lifecycle Stages

You learned that each contract type has a lifecycle based on the state model. The typical contract lifecycle has the following stages.

Draft: The contract is in the Draft stage during authoring.
Submit for Approval: The contract is submitted for internal approval or cancellation. If canceled, the contract lifecycle ends.
In Approval: Once the contract is submitted for approval, the status changes to In Approval. If the approval is rejected, the team revises the contract or the lifecycle ends.
Negotiating: If approved, the status changes to Negotiating. The team can redraft the contract at this stage, such as in response to approver feedback, or they can request an e-signature.
Awaiting Signature: After the contract is sent for an e-signature, the status updates to Awaiting Signature. If the contract isn’t signed, the status changes to Signature Declined and the contract lifecycle ends. If the e-signature is revoked, negotiation can resume.
Activated: The signed contract becomes active, and the status changes to Activated. The contract can expire or terminate, ending the lifecycle.

In this unit, you gained insights into contract types, state models, contract actions, and the contract lifecycle.

Follow along in the next unit to get hands on with Salesforce Contracts.

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