Create a contract

You can create a variety of contract models for leases, maintenance, or warranties.

Before you begin

Role required: contract_manager or admin

About this task

If a contract has one or more associated rate cards, the fields on the Contract form cannot be edited.

Procedure

  1. Navigate to Contract and select the type of contract, such as Insurance, Maintenance, or Service, or select All.
  2. Click New.
  3. Complete the form.
    Not all fields appear on all contract type forms.
    Table 1. Contract form fields
    Field Description
    Number Unique number identifying the contract record.
    Vendor Vendor responsible for the contract. This field is mandatory when the contract model selected is NDA or Purchase Agreement.
    Contract model Model to which the contract is assigned. For example Lease, Maintenance, Warranty, or Service Contract.
    Commitment Amount committed to spend with this vendor during this time period, from the start to the end of the contract.
    Discount Discount the vendor has agreed to provide.
    Contract number Number assigned to the contract by the vendor.
    State Current state of the contract: Draft, Active, Expired, or Canceled.
    Substate Current substate of the contract. For example, Awaiting Review, Under Review, Approved, or Rejected.
    License quantity entitled Number of licenses included in the contract. This field is available for Maintenance and Software License contracts.
    Short description Brief description of the contract.
    General section
    Starts Date on which the contract takes effect. This field is mandatory if the contract model is Purchase Agreement or NDA.
    Ends Date on which the contract expires. Leave the end date blank to create an open-ended contract. This field is mandatory if the contract model is Purchase Agreement or NDA.
    PO Number Purchase order number assigned to the contract.
    Vendor account Vendor account associated with the contract.
    License type Type of license: Enterprise, SaaS, or Subscription. This field is available for Maintenance and Software License contracts.
    Application model Application model associated with the contract.
    Location Location covered by the contract.
    Contract administrator Individual who works for the vendor and is responsible for managing the contract.
    Approver User who approves or rejects the contract. List is filtered to only show users with the itil role.
    Description Detailed description of the contract.
    Renewal/Extension section
    Automatically renew/extend Indicates whether or not the contract can be renewed at the end of its term.
    Options Duration of the contract renewal or extension. For example, 1 year.
    Renewal/Extension date Date on which the contract renewal or extension takes effect.
    Renewal/Extension end date Date on which the contract renewal or extension ends.
    Renewal/Extension contact Individual who works for the vendor and is responsible for renewing the contract.
    Cost adjustment type Type of cost adjustment applied to the contract: Fixed, Manual, or CPI (consumer price index).
    Cost adjustment amount Numerical increase or decrease in price of contract. To indicate a decrease in price, enter a negative number. Either a Cost adjustment or Cost adjustment percentage can be specified, but not both.
    Cost adjustment percentage Percentage increase or decrease in price of contract. To indicate a decrease in price, enter a negative percentage. Either a Cost adjustment or Cost adjustment percentage can be specified, but not both.
    Financial section
    Cost center Cost center that is financially responsible for the asset.
    Tax exempt Indicates whether or not the contract is exempt from tax.
    Sales tax Indicates whether or not sales tax is applied to the total cost.
    Effective tax rate Effective tax rate to apply to the total cost, if applicable. Effective tax rate is usually the average tax rate charged.
    Has rate card Check box to indicate whether the contract has an associated rate card.
    Invoice payment terms Terms that explain how to pay the contract. For example, Net Monthly Account or Net 30.
    Payment schedule Schedule that defines when to make payments. For example, Monthly or Annually.
    Payment amount Amount which has been paid on the contract to date.
    Tax cost Total cost of the tax.
    Total cost Final cost of the contract after adjustments have been applied. If a contract has one or more rate cards, this field shows the combined value of all rate cards.
  4. Right-click the form header and click Save.
  5. Continue entering information in the additional sections and related lists that appear.
    Table 2. Contract form fields and related lists
    Field Description
    Terms and Conditions section
    Terms and conditions Specific legal information in the contract.
    Related lists
    Assets Covered Lists all assets covered by this contract.
    Users Covered Lists all users covered by this contract.
    Contract used by Lists all configuration items (CI) used in this contract.
    Terms and Conditions Lists all terms and conditions of this contract.
    Expense Lines Lists all expense lines in this contract.
    Contract History Displays the changes to the start and end dates of this contract and changes to the terms and conditions.
    Service Offerings

    Lists all service offerings from this vendor.

    This related list is available when Service Portfolio Management is activated.

    Service Commitments for Contracts

    Lists all service commitments for this vendor's offerings.

    This related list is available when Service Portfolio Management is activated.

  6. Perform one of the following actions.
    • Click Update to save and exit the contract.
    • Click Submit for Review to send notification to the approver.