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Coupa Success Portal

Amendment

Overview

The amendment process is used to update/change a legally binding contract between two (or more) parties. (Unless one party has the right to unilaterally amend,) it is akin to signing another contract to indicate all parties are in agreement with the proposed changes to the main contract. As such, most of the processes involved in drafting and executing a contract applies to drafting and executing Amendments.

Scoping Questions

  1. What percentage of your contracts have been amended?
  2. When amending, do you restate the whole contract in its entirety, or instead issue a “short form” amendment that only captures the changes being made?
  3. For amendments raised, are these typically just to update commercial terms, or legal terms as well?
  4. Do your contracts contain regulated clauses maintained by a 3rd party/regulator?

Design Options

The first design option is whether the system will be used to generate the amendment document, or simply to capture amendments created off-platform. (This will determine whether a “creation template” is required for amendments).

The second design option is whether off-platform created amendments will be loaded onto the platform post execution or as a draft. If as a draft, then the same processes as for a contract will apply (i.e. negotiation > approval > signature > final capture > activation).

The final design option is whether to allow multiple draft amendments on a contract, or whether the first amendment needs to finish (i.e. be made active) before another can start.
Although the system does allow parallel amendments, it does mean that where an earlier amendment is activated after a later amendment, the user may be prompted to manually validate any data points that are impacted by both amendments.

Considerations

  • When using Smart Extract, it will be more accurate if the amendment is the contract restated in full. However, the counterparty may not appreciate this format as they will need to review the whole contract to ensure no other areas were amended.
  • Short form amendment templates should be very similar, even across different contract types. To reduce the number of templates (see Template Structure & Grouping), try to design the amendments to be generic enough that only a single template is required.
  • Due to the way the action configuration works, it is not possible to provide the ‘Capture Amendment’ option without also providing the ‘Create Amendment’ option on contracts.
  • It is possible to execute amendments on masse (e.g. a regulated clause is updated). Please refer to Mass Actions for more information.

Things to avoid

CLMA does not currently include an ‘Assign’ action, to change contracts that have been assigned from the original counterparty to a new counterparty (normally as a result of M&A activity). Where a contract needs to be assigned to a different counterparty, do not use the Amendment action to do so. (Other parts in the Coupa platform does not allow the supplier to be updated on a contract, so will lead to undesirable system behavior). Instead, clone or use ‘Create from Existing’ against the current contract to create a new version against the new counterparty, followed by terminating the original record.

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