Contract obligations are duties that each party is responsible for in a contract agreement. Since contracts are legally bound, it's imperative that both parties duly perform these duties to ensure compliance. 

Failing to perform the obligations results in adverse regulatory and financial consequences. It also leaves the organization with damaged business relationships. For these reasons, obligation management is a vital part of any business. 

In Zoho Contracts, all the obligations of the organization related to a contract can be tracked and managed from the Obligations tab within the respective contract. The contract owner can create and assign obligations to the organization members, and set reminders for them. Obligation owners can notify the contract owner if an obligation needs their attention, as well as delegate obligations to other members. 

With the help of dashboards and reports, one can be on top of the real-time progress of the obligations across multiple contracts. 

In Zoho Contracts, there are two types of obligations. 

• Task Obligations 
  
• Non-Task Obligations 

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Task Obligations 

Obligations that play the role of action items are called Task Obligations. Based on the number of times they occur, task obligations are further classified as follows:   

• One-Time Obligations 
  
• Recurring Obligations 
  

One-Time Obligations

These occur only once. For example, in a procurement contract, the buyer is legally obligated to make a certain amount of payment in exchange for a certain amount of goods or services. The payment could be added as a One-Time obligation and assigned to a person in the Purchase department. 

Recurring Obligations

Recurring obligations are obligations that keep recurring at regular intervals of time. In recurring obligations, when an obligation owner marks one of the dues of an obligation as complete, the next one will automatically be generated based on the configured repeat pattern.

For example, in a procurement contract for periodic procurement of raw materials, the payment for each transaction could be added as recurring obligations. 

Non-Task Obligations

Besides actionable obligations, a contract also contains general principles that the contracting parties are obligated to. 

For example, in a Non-Disclosure Agreement (NDA), the parties involved are obligated to hold the information pertaining to the agreement in confidence. This confidentiality obligation could be added as a Non-Task Obligation.