Contract life cycle

  • Release version: Xanadu
  • Updated August 1, 2024
  • 2 minutes to read
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    Summary of Contract life cycle

    The contract life cycle in ServiceNow governs the progression of contracts from creation through closure, controlling field editability and contract status changes. Contracts begin in a Draft state where most fields are editable. After moving beyond Draft, key fields related to dates, renewal, extension, and finances become read-only. The contract’s State and Substate fields remain read-only throughout the life cycle.

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    Contract Compliance Checks

    A nightly scheduled job, Contract Compliance Checks, runs automatically on the Contract [astcontract] table to manage contract states based on contract dates and approval statuses. This job:

    • Activates contracts that are approved and have reached their start date.
    • Renews contracts approved for renewal at the specified renewal start date.
    • Expires contracts that have passed their end date.

    The job’s override behavior for condition checks on parent and child tables is controlled by the system property contractcompliancecheckjob.enableoverride, which is enabled by default. This ensures child table checks override parent table checks for the same fields. Disabling this override requires setting this property to False.

    Expense lines are generated only from contracts in Active or Expired states.

    Contract States and Substates

    Contracts progress through predefined states and optional substates that indicate their current status in the contract management process.

    StateDescription
    DraftUser inputs contract details and assigns approvers.
    ActiveContract is approved and has reached the start date.
    ExpiredContract has reached its end date. Substates indicate renewal workflow status, such as Waiting for Review or Renewal Approved.
    CanceledContract is discontinued and inactive.
    SubstateDescription
    Awaiting ReviewContract is being prepared for review.
    Under ReviewContract is under approver review.
    ApprovedContract has been accepted by approver.
    RejectedContract has been declined by approver.
    Renewal ApprovedRenewal approved by approver.
    Renewal RejectedRenewal rejected by approver.
    Renewal in processRenewal workflow is ongoing.
    RenewedRenewal workflow is complete.
    Extension ApprovedContract extension approved by approver.
    Extension RejectedContract extension rejected by approver.
    NoneNo substate specified.

    Practical Implications for ServiceNow Customers

    Understanding the contract life cycle allows you to manage contract data integrity and automate contract status changes effectively. The Contract Compliance Checks job reduces manual oversight by automatically updating contract states based on contract lifecycle events, ensuring contracts progress correctly through Draft, Active, Expired, and Canceled states.

    Configuring the override property lets you control how condition checks apply across related contract tables, enhancing data accuracy especially when dealing with parent-child contract relationships. Monitoring contract states and substates helps track contract approval, renewal, and extension processes, providing clear visibility into contract progress and compliance.

    From creation until closure, contracts follow a life cycle that determines which fields can be edited.

    When a contract is in Draft state, almost all fields on the contract record can be edited. After a contract moves past the Draft state, certain date, renewal, extension, and financial fields become read-only. The State field and Substate field are read-only.

    The Contract Compliance Checks schedule job runs on the Contract [ast_contract] table automatically each night. For more information about the scheduled job, see Use Condition Check Definitions. The scheduled job performs the following actions:
    • Changes the contract state to Active if the contract is approved and reaches the specified start date.
    • Renews the contract if the contract is approved for renewal and reaches the specified start date.
    • Changes the contract state to Expired if the contract state is Active and reaches the end date.
    The system property contract_compliance_check_job.enable_override enables the Contract Compliance Checks job to override checks in a hierarchy. By default, this system property is set to True. When checks are defined on the same field of the parent and child tables, the Contract Compliance Checks job performs the following:
    • For the records on the parent table, the condition check on the table sets the field with the value specified in the condition.
    • For the records on the child table, the condition check on the child table overrides the parent table condition and sets the field value on the child table accordingly.

    For example, when a check is defined on the Description field of the Contract (parent) and Lease (child) tables, the field on the Lease table is set to the value specified in the child table condition. To disable the contract compliance check override functionality, set the system property contract_compliance_check_job.enable_override to False.

    Expense lines are only generated from contracts that are active or expired.

    Table 1. Contract states
    State Description
    Draft User adds information about the contract and specifies an approver.
    Active Contract was approved and has reached the specified start date.
    Expired Contract reached the specified end date. Expired contracts with an active renewal workflow that are waiting for approval have a substate of Awaiting Review. Expired contracts with an active renewal workflow where the renewal was approved, but the renewal date hasn’t yet passed, have a substate of Renewal Approved. Expired contracts with no active renewal or extension pending workflow have an empty substate.
    Canceled Contract was discontinued and is no longer active.

    In addition to a state, a contract can also have a substate.

    Table 2. Contract substates
    Substate Description
    Awaiting Review Contract is being prepared for review.
    Under Review Contract sent to the approver and the approver is reviewing the contract.
    Approved Contract reviewed and accepted by the approver.
    Rejected Contract reviewed and declined by the approver.
    Renewal Approved Contract renewal approved by the approver.
    Renewal Rejected Contract renewal rejected by the approver.
    Renewal in process Contract renewal is in progress through the contract renewal workflow.
    Renewed Contract renewal is complete through the contract renewal workflow.
    Extension Approved Contract extension approved by the approver.
    Extension Rejected Contract extension rejected by the approver.
    None No substate is specified.