What is the significance of the Draft state in a CLM workflow, and which transitions are typical from Draft?

• A. Draft is editable; typical transitions to In Review or Out for Signature, or to Cancel; cannot be signed from Draft.
• B. Draft is final; transitions to Approved; cannot be edited.
• C. Draft is archived automatically
• D. Draft is only for templates

Answer: (A)

Draft represents the editable creation stage in a CLM workflow. It’s where you build, modify, and organize the contract content and set up the routing (who reviews, who signs, and in what order). Because it’s not yet finalized, the document can be edited and adjusted before any approval or signing takes place.

From this starting point, a contract typically moves to In Review to collect internal approvals or to Out for Signature to begin the signing process. You can also cancel the document at this stage if you decide not to proceed. Signing isn’t possible directly from Draft because the contract isn’t finalized and hasn’t been routed to signers yet. Once it leaves Draft and reaches a signature state, it becomes eligible for signatures. Draft is not inherently a template-only state, nor is it automatically archived or treated as final.