Explore Contract Types, Actions, and Lifecycle States

Learning Objectives

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

Explain contract types.
Describe the contract state model.
List predefined contract actions.
Describe the contract lifecycle.

Before You Start

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

Salesforce Contracts Foundations

Contract Lifecycle Management at Cloud Kicks

In the Salesforce Contracts Foundations module, you explored the benefits and capabilities of Salesforce Contracts. You also learned how digital contract management simplifies and expedites the sales process.

With the implementation of Salesforce Contracts, Cloud Kicks transformed its sales process. Now, Candace Evans, a sales rep at Cloud Kicks, and her team spend more time closing deals and less time juggling contract documents. Other departments, including legal, operations, and finance, are loving the efficient, collaborative platform.

Candace, sales rep at Cloud Kicks.

Now let’s take a step back. How did the Cloud Kicks digital transformation happen? Who got everything working to automate and streamline contract lifecycle management?

Enter Linda Rosenberg, the trusty Salesforce administrator at Cloud Kicks.

Linda, Salesforce admin at Cloud Kicks.

Linda led the solution setup from a technical standpoint, partnering with Candace for guidance on the business side.

In this module, you explore contract types, state models, contract actions, and the contract lifecycle. Follow along as Linda and Candace set up contract types, contract versioning, and workflows, such as contract customization and negotiation.

Contract Types

A contract is a written or spoken agreement, especially one concerning employment, sales, or tenancy, which is intended to be enforceable by law. Businesses may work with several types of contracts. Using contract types in Salesforce Contracts, Linda can help Candace manage many different contracts under one organization. The contract type specifies the kind of document, for example, a sales contract, nondisclosure agreement, or partnership agreement.

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

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 contract type “default” is typically associated with the “contract lifecycle management” record type. To create new contract types, you can clone the default contract type.

Object State Definition

The Object State Definition or state model defines the valid states and transitions between states that a contract can progress through during its lifecycle. The Object State Definition determines the contract lifecycle for each contract type. Use the model to automate the progression of a contract from one state to the next and the actions available to users at each stage.

With Salesforce Contracts, all contracts use the default Object State Definition, which you can customize for different contract types. Contract actions move the contract through each state. Once contract types are in place, different lines of business can refine the state model to fit their workflow.

The diagram shows the relationship between various contracts, contract types, state models, and actions.

Relationship between contract, state model, and actions for contract types A and B.

Assume that Linda 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 the 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 includes Draft, Internally Approved, Negotiation, Final Approval, and Activated. Actions B1 and B2 move the contracts through the lifecycle states.

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

Predefined Dynamic Contract Actions

Dynamic contract actions control the valid actions and operations for each contract state based on the Object State Definition.

Use the interactivity to 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 States

Each contract type has a lifecycle based on the state model.

Contract lifecycle with different stages based on the state model.

In this example, the contract goes through six 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 Status. If the approval is rejected, two things can happen. Either 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 e-signature.
Awaiting signature: After the contract is sent for 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 e-signature is revoked, negotiation may 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 learned how Cloud Kicks successfully implemented and streamlined contract lifecycle management using Salesforce Contracts. Plus, you gained insights into various contract types and state models.

Follow along in the next unit to create a contract and discover what else you can do from the Contract Documents Page.

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