The California Consumer Privacy Act (CCPA) ushered in a new era for contract compliance management when it became effective on January 1, 2020. The CCPA lays out comprehensive rules for businesses that sell to Californians and handle consumer data.
If a business has at least $25 million in annual revenue, or it collects and/or sells sensitive personal information from California consumers above certain thresholds, then it must adhere to strict requirements including how it handles that data, how quickly it notifies consumers of data breaches, and how it responds to access requests and consumer requests to opt-out of the collection of identifying information.
Businesses that fail to comply with the law potentially face sizable statutory damages and other penalties.
So how can your legal team quickly review for CCPA compliance and determine which contracts need updates and what language you need to add to or change in your business’s existing contracts? There are three questions you’ll probably want to ask about contract terms and compliance issues as you get started:
- How many of my contracts already contain the standard language that I want for my business?
- How many of my contracts have clauses that are non-standard, but still acceptable?
- How many of my contracts contain “ticking time bomb,” non-standard, non-approved language?
This is where a contract intelligence platform can help. Using the power and speed of artificial intelligence, you can drastically reduce the time you spend searching for and replacing terms in your existing contracts.
Good contract management software can serve as a central repository for your entire portfolio of agreements, or it can alternately pull in your documents from whichever storage solutions you already use and allow you to manage them from a central location, adapting the contract management process to work with your preferred tools.
A reasonable place to begin would be to identify which of your contracts are already good to go. If you provide the exact language you’re searching for, then within a matter of seconds, a good contract intelligence platform can find all of the contracts and clauses throughout your portfolio that contain that language.
However, thanks to the power of AI, you’re not limited to rigid, exact-match searches in your agreements. Natural language processing (NLP) capabilities allow you to search not only for exact language matches but also for the true meaning of the language in your agreements.
Review CCPA Contract Requirements 1000 Times Faster
An AI algorithm, thoroughly trained on a myriad of variations of dozens of standard provisions, can recognize the content and purpose of a clause based on the language that is actually in that clause.
AI can help you find data privacy clauses containing language that’s completely different from your standard language. It can also identify clauses in other sections of your agreements that contain relevant terms or obligations.
Furthermore, a leading contract intelligence platform will have the power to find specific types of clauses that exclude the particular language you’re looking for. Searching for those non-standard terms throughout your portfolio is as easy as adding another field to your search query.
In addition, the potential for natural language processing tools isn’t limited to identifying exact matches or exclusions. For example, a contract intelligence platform could assess how closely the language in a contract mirrors the language in question and rank clauses in different contracts based on how far they are from your target language.
This ability would allow you to prioritize the more divergent clauses before moving to the agreements that contain terms that are closer to what you need.
The ability to understand context can also be useful when you need to identify whether your obligations extend beyond the contents of your own contracts. For instance, many contracts contain a simple clause stating that a separate data privacy agreement is incorporated into the contract by reference.
Contract Intelligence Platforms
A smart platform can help you find those clauses just as easily as it can locate the more detailed clauses that layout your obligations directly within the contract. Add to that the convenience of having parent and child documents linked together automatically within the contract management system, and you can eliminate hours spent searching for documents stored in different places or lost in various inboxes.
After you’ve run a search, organizing different groups of documents can be as easy as clicking a button. If you’ve just identified a cluster of contracts with high-risk provisions, for example, you could immediately tag the entire group of documents as “high risk,” or move them into a folder together—whichever approach better suits your workflows. You should also have the option to save each search so that you can run it again with just one click in the future.
If that flexibility isn’t enough, a good contract management platform will not limit you to working solely within its interface. It should be easy to export search results in an Excel file that contains all of the relevant clauses and related information you need for each document that a search has returned, along with hyperlinks allowing you to access all of those documents directly from the spreadsheet.
Once you’ve identified the contracts that need clause updates, a contract intelligence platform can greatly simplify the process of amending agreements and sending a letter with new language to vendors/clients for signature.
Systems that have built-in approval workflows and e-signature can automate this entire process, keeping all documents in one system, preventing the creation of duplicates, and tying all amendments to the master agreement. You spend less time on revisions and more on strategy. That speed and reliability saves you time and money.
With new data privacy laws under consideration at both the federal level and the state level in the United States, and the GDPR already in place in the European Union, contract managers and data protection officers need smart, powerful tools to ensure compliance with data protection laws.
A state-of-the-art contract intelligence platform can provide you the peace of mind of knowing that you’re ready to quickly adapt to regulatory changes as they take shape.
Ready to learn more about how Evisort can help you update and monitor your contracts to ensure compliance with the CCPA and other data privacy regulations? Schedule a demo today!