What is a Clause Library?

The longer you maintain an agreement—or an agreement template—the more changes you’ll probably have to make to it. Clauses need to be amended in certain cases, but not others;  contentious elements need to be dropped, edited, or rearranged. And all of this has to be done with extreme accuracy, as even the smallest mistake could throw the agreement's legality into question.

Clause libraries help professionals who manage agreements to stay organized so they can safely make changes to an agreement as quickly and accurately as possible. Read on to learn about clause libraries, including how to build and manage one of your own.

This blog post is offered for general information purposes only. It does not constitute, and is not a substitute for, legal advice.

What is a clause library?

A clause library is a collection of organized and categorized pre-approved clauses for inclusion in agreements such as contracts. Keeping a clause library allows you to quickly access and insert relevant clauses into new contracts and documents whenever needed, without the need to rewrite the clause completely.

What makes a clause library useful?

Clause libraries are valuable organizational tools. They can help you save time creating contracts, significantly improve the accuracy and consistency of your document creation process, and help you keep a reliable record of your organization’s standard procedures. 

Even better, the more you develop your clause library, the more frequently you can use it to expedite document creation. Whenever you add a new clause to your library, for example, it will always be available for placement in any document that might require it in the future. Well-maintained clause libraries tend to become even more useful over time.

How does a clause library work?

A clause library is only as useful as it is well-organized. Good clause libraries don’t just contain an exhaustive list of any clauses you want to hang onto; they also categorize those clauses in the manner most useful to whoever will use the clause library. For example, clause libraries in Docusign allow you to create and edit clause groups and taxonomies. 

Clause groups

Clause groups are collections of clauses around a specific topic. You can use clause groups to organize related clauses together for quick access. You might label each of your clause groups after a section of the document you are completing. In the image of the clause library below, for example, the clause groups listed are “Assignment & Change of Control,” “Audit & Inspection Rights,” “Compensation & Payment,” etc.

Each clause group can contain a large number of clauses, but for optimal organization, each clause group should only contain clauses that are related to each other or the section and topic the clause group encompasses. 

Clause types: primary and fallback language

Each clause within a clause group can also contain multiple variations. The most commonly used variation of this clause (ie, the one the user most frequently includes in the document by default) is considered the primary language of the clause. This version of the clause will appear first when the user selects the clause to review.

Within a clause group, a clause can have any number of variants, or fallback clauses. These fallback clauses are different versions of the original language. You may need these to account for case-specific differences in the document you’re creating. 

Docusign CLM and clause libraries

For any organization managing contracts, a clause library is an invaluable way to save time and stay organized.

In Docusign CLM, a clause library is a repository that contains standardized and pre-approved clauses for use in contract creation. Once an administrator has created a custom clause library, users can access and use it.

To get started with Docusign CLM, contact our sales team today.