Contract

Contract in ERPNext is used to manage legally binding agreements between your organization and a customer or supplier. It enables businesses to document contract terms, monitor contract validity, track fulfilment obligations, and maintain references to related business transactions from a single record.

Contracts define the rights, responsibilities, and obligations of all involved parties for the supply of products, services, or both. Storing contracts within ERPNext ensures that important business agreements remain organized and easily accessible throughout their lifecycle.

A Contract serves as the central record for legal agreements and can be linked to multiple ERPNext transactions such as Quotations, Sales Orders, Projects, and Invoices.

How to Create a Contract

Follow these steps to create a new Contract:

1. Go to Home → CRM → Sales Pipeline → Contract.
2. Click New.
3. Select the Customer with whom the agreement is being created.
4. Enter the Contract Terms manually or select a predefined Contract Template.
5. Review the contract information and save the document.

After saving, the Contract becomes available for tracking, updates, and linking with related ERPNext documents.

Party User

The Party User identifies the employee from your organization who is responsible for communicating with the customer regarding the contract. This helps establish a clear point of contact throughout the contract period.

Contract Status

ERPNext uses different statuses to indicate the current state of a contract.

• Unsigned – The contract has been created but has not yet been accepted or signed by the customer.
• Active – The contract has been signed and is currently valid within the specified contract period.
• Inactive – The contract has expired or is no longer valid after the contract period ends.

Keeping the contract status updated allows businesses to quickly identify which agreements are active and enforceable.

Contract Features

Contract Period

Every contract includes a validity period that defines when the agreement becomes effective and when it expires.

• Start Date specifies when the contract becomes active.
• End Date specifies the last day on which the agreement remains valid.

This allows organizations to monitor active agreements and identify contracts approaching their expiration dates.

Signee Details

Once the customer signs the agreement, enable the Signed option to record the signing information.

The following details can be captured:

• Signee – Name of the individual who signed the contract.
• Signed On – Date on which the contract was officially signed.

Recording signee details provides a complete audit trail of contract acceptance.

Contract Details

The Contract Terms section contains the legal terms, conditions, responsibilities, payment conditions, service commitments, and other clauses agreed upon by both parties.

Instead of entering the terms manually each time, ERPNext allows users to select a predefined Contract Template that automatically fills the Contract Terms field.

Fulfilment Details

If the contract includes obligations that your organization must complete, they can be recorded in the Fulfilment Terms table.

Each fulfilment entry includes:

• Requirement – The specific obligation or deliverable that must be completed.
• Notes – Additional instructions or information related to that requirement.

Examples of fulfilment requirements include:

• Product installation.
• User training.
• System implementation.
• Warranty activation.
• Annual maintenance services.

Tracking fulfilment requirements helps ensure that contractual commitments are completed on time.

Contract Template

A Contract Template is a reusable format that contains standardized legal clauses and contract wording.

Instead of writing the same terms for every contract, users can select a template that automatically populates the contract with predefined content.

ERPNext also supports Jinja templating, allowing dynamic values from the Contract document to be inserted automatically into the template.

For example:

The parties enter into this contract on {{ start_date }}.

When a contract is created, {{ start_date }} is automatically replaced with the contract’s actual Start Date.

Using templates improves consistency while significantly reducing the time required to prepare contracts.

References

Contracts can be linked to related ERPNext documents to maintain complete traceability between legal agreements and business transactions.

Supported reference documents include:

• Quotation
• Project
• Sales Order
• Purchase Order
• Sales Invoice
• Purchase Invoice

Linking these documents allows users to easily navigate from the contract to the associated operational transactions.

Document references create a complete relationship between contracts and the sales, purchasing, accounting, or project activities carried out under the agreement.