What's the difference between mandatory and optional clauses in contracts?

Mandatory clauses must be included in every applicable contract to ensure compliance and risk control; optional clauses can be added or omitted based on the deal’s context.

How does CLM software help distinguish between mandatory and optional clauses?

CLM enforces mandatory clauses through locked templates and rules, while optional clauses appear as selectable components with controlled approvals for edits or removals.

What are common examples of mandatory clauses that should be in every contract?

Typical examples include confidentiality, payment terms, warranties, termination, IP ownership, limitation of liability, and indemnification.

How can unclear clause definitions lead to problems?

Ambiguity invites disputes, inconsistent obligations, and compliance gaps—often escalating negotiation time and post-signature risk.

What's the best practice for documenting which clauses are mandatory versus optional?

Use a version-controlled table or playbook listing each clause’s category, rationale, approved fallbacks, and approvers, and publish it within your CLM.

How does CLM reduce confusion about clause requirements across teams?

It centralizes clause libraries and workflows so every team drafts from the same standards, with automation guiding approvals and exceptions.

Can CLM systems automatically flag risky or non-compliant clauses?

Yes. Modern platforms use AI and policy rules to flag non-standard or risky language, prompting human review before approval.

Sirion | AI-powered CLM Insights & Resources

topics

Resources

One place for all of your contracts. Easily searchable thanks to powerful AI. Integrated with the business systems your teams already use.

1 min read

CLM Navigator

Enterprise Intelligence System

RESOURCES & TOPICS

7 min read

Contracts

What Is a Purchase Agreement? Uses, Types & Key Terms

7 min read

Contract Management

Contract Dispute: Meaning, Common Causes, Resolution Methods, and How Enterprises Prevent Them

5 min read

Contract Management

Managing ESG Risk in Contract Management: A Practical Guide for Governing Sustainability, Compliance, and Supplier Risk at Scale

5 min read

Contract Management

topics

Resources

Resources

Enterprise Intelligence System

RESOURCES & TOPICS

What Is a Purchase Agreement? Uses, Types & Key Terms

Contract Dispute: Meaning, Common Causes, Resolution Methods, and How Enterprises Prevent Them

Managing ESG Risk in Contract Management: A Practical Guide for Governing Sustainability, Compliance, and Supplier Risk at Scale

Robust Contract Management: What It Means, Why Enterprises Need It, and How to Build It at Scale

What Is a Voidable Contract? Meaning, Examples, and How to Manage the Risk

SharePoint Contract Management: Limitations, Risks, and Why Enterprises Outgrow It

Automated Contract Analysis: How Enterprises Use AI to Unlock Risk, Compliance, and Value at Scale

Contract Management KPIs: Measuring What Turns Contracts into Business Performance

Contract Management Principles: The Practical Guide

Void vs Voidable Contract: Key Differences, Causes, and How Enterprises Should Handle Each

Sourcing and Contract Management: Connecting Supplier Decisions to Contract Performance and Business Value

Revenue Leakage: How Poor Contract Management Quietly Erodes Enterprise Profitability