A contract is a legal agreement between a purchasing enterprise and a supplier, which dictates buying, payment and delivery terms over time.

SAP Sourcing enables you to create a contract from an RFx, auction, or master agreement. Each contract is based on a contract document template, which consists of clauses and sections of standard legal terms.

Clauses can contain variables that are automatically replaced with terms and other detailed information taken directly from a sourcing event such as an RFx or auction or from a specific agreement. These features enable streamlined contract creation that saves time and eliminates repetitive tasks.

The contract document is a Microsoft® Word file that is attached to the sourcing event from which it is created. After it is created, a contract can be edited in Microsoft Word and used for negotiation with the supplier.