---
sourceDocument: Yokohama Finance and Supply Chain
sourceDocumentLink: https://servicenow-prod.fluidtopics.net/r/yokohama/source-to-pay-operations

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    - yokohama

ft:locale :

    - en-US

ft:publication_title :

    - Yokohama Finance and Supply Chain

ft:clusterId :

    - stpop

bundleId :

    - stpop

workflow :

    - Employee


---

# Contracts

# Contracts {#ariaid-title1}

* Release version: Yokohama
* 
* Updated January 30, 2025
* 
* ![](https://www.servicenow.com/docs/portal-asset/ico-clock) 5 minutes to read

A contract defines the terms and conditions along with pricing agreed for a product
with the supplier​. An active contractual price determines if the pricing of a product or
service is displayed on ShoppingHub.
Use the purchasing view to view contract details in the Sourcing and Purchasing Automation module. You can also create a new contract with the contract_manager role.  
In addition to purchase requisitions, systematic creation of a contract occurs during a sourcing request or negotiation. This is configured accordingly in flow designer. The various scenarios for pre-purchase contract creation are:

* Negotiation exists, created manually: Trigger contract creation, including NDA if required, against the negotiation when the state of the negotiation is Planned.
* Negotiation exists, created systematically through third-party sourcing integration: Trigger contract creation, including NDA if required, against the negotiation when the state of the negotiation is Negotiation in Progress.
* Negotiation does not exist: Trigger NDA contract creation, if required, against the sourcing request when the state of the sourcing request is Awaiting Supplier Response. A procurement specialist or contract team can manually create other contracts against the sourcing request before creating a purchase requisition. If contracts are not manually created against the sourcing request, they are systematically created against the awarded purchase requisition after approvals are complete.
* New supplier created from manual sourcing or third-party sourcing integration: For third-party sourcing integration, trigger contract creation when a new purchase line is created for a new supplier. For manual sourcing, contract creation follows the manual negotiation creation or negotiation does not exist scenarios.
{#contracts__ul_rrj_vkz_msb}

When a supplier is awarded, contracts that were created for the other suppliers are
canceled, except NDAs. Contract metadata population remain as is.

In a contract, the following are the key fields:
{#contracts__table_wlb_5bb_hlb__entry__2}

| Field | Description |
|-|-|
| Contract model | Type of the contract. |
| Supplier | Supplier that is billed for this contract. |
| Contract number | Unique identifier for the contract that the vendor assigns. |
| Name | Short description of the contract. |
| Parent contract | Parent contract or agreement, if any. |
| Start date | Date from which this contract is effective. |
| End date | Date on which the contract ceases to be effective. |
| State | Status of the contract. For example, Draft, Active, Expired, or Canceled. |
| Substate | Substate of the contract. For example, Awaiting Review, Under Review, Approved, or Rejected. |
| License quantity entitled | Number of licenses included in the contract. This field is available for Maintenance and Software License contracts. |
| Contract administrator | Person responsible for managing the contract and interacting with the vendor. |
| Approver | User who approves or rejects the contract. |
| Business owner | Internal user responsible for the product in the contract. |
| Agreement type | License classification of the contract. |
| Description | Detailed description of the contract. |
| Purchasing ||
| Purchasing entity | The purchasing entity associated with the contract. |
| Payment term | The agreed to time and conditions under which a payment to a supplier is made. |
| Incoterm | Determines who assumes the liability and when a fixed asset must be capitalized. |
| Financial ||
| Invoice payment terms | Terms that explain how to pay the contract. For example, Net Monthly Account or Net 30. |
| Payment schedule | Schedule that defines when to make payments. For example, Monthly or Annually. |
| Payment amount | Amount paid for this contract so far. |
| Applicable taxes | Tax applicable for this contract. Select from Exempt or Sales. |
| Effective tax rate | Tax rate applicable to the total cost. This field is visible only if the applicable taxes is selected as Sales. |
| Tax cost | Total tax on the contract. This field is visible only if the applicable taxes is selected as Sales. |
| Total cost | Final cost of the contract after adjustments have been applied. If a contract has one or more rate cards, this field shows the combined value of all rate cards. |
| Vendor account | Account of the vendor with which the contract is associated. |
| PO Number | Purchase order associated with this contract. |
| Cost center | Cost center that is financially responsible for the asset. |
| Has rate card | Determines if the contract has an associated rate card. |
| Renewal ||
| Automatically renew | Indicates if the contract can be renewed at the end of its term. |
| Options | Duration of the contract renewal or extension. For example, 1 year. |
| Renewal start date | Date on which the contract renewal or extension takes effect. |
| Renewal end date | Date on which the contract renewal or extension ends. |
| Cost adjustment type | Type of cost adjustment applied to the contract: Fixed, Manual, or CPI (consumer price index). |
| Cost adjustment amount | Numerical increase or decrease in price of contract. To indicate a decrease in price, enter a negative number. Either a Cost adjustment or Cost adjustment percentage can be specified, but not both. |
| Cost adjustment percentage | Percentage increase or decrease in price of contract. To indicate a decrease in price, enter a negative percentage. Either a Cost adjustment or Cost adjustment percentage can be specified, but not both. |
| Terms and conditions ||
| Specific legal information in the contract. ||
[Table 1. Contract form]

{#contracts__table_wlb_5bb_hlb}  
The following are the related lists of a contract:{#contracts__table_hlx_mhb_hlb__entry__2}

| Related list | Description |
|-|-|
| Child Contracts | Lists any child contracts that exist for this contract. |
| Expense Lines | Lists all expense lines for this contract. |
| Assets Covered | Lists all assets covered by this contract. |
| CIs Covered | Lists all configuration items (CI) used in this contract. |
| Service Offerings | Lists all service offerings from this vendor. Activate Service Portfolio Management to see this related list. |
| Approval History | Lists all approvals for this contract. |
| Contract History | Displays the changes to the start and end dates of this contract and changes to the terms and conditions. |
| Purchase Requisitions | Lists all the purchase requisitions associated with this contract. |
| Purchase Orders | Lists all the purchase orders associated with this contract. |
| Supplier Products Covered | Lists all the supplier products covered under this contract. |
| Pre-payments | Provides information of the pre-payment details such as the amount and the payment date for this contract. |
[Table 2. Contract related lists]

{#contracts__table_hlx_mhb_hlb}

## Contract exception rules {#contracts__section_l4y_1nb_hlb}

Contract exception rules specify conditions in which a contract record is not created even if there is a corresponding contract type mapped to a model category. A procurement administrator​ can configure these rules from
decision tables which are in the administration section of the Sourcing and Purchasing Automation module.