This paper provides practical insights into the challenges associated with the contracting process in agile projects in the Norwegian software industy. We conducted interview with 32 agile practationers from 25 different software development organizations in Norway. The data were analayzed using grounded theory. This analysis found several concepts that gave rise to two core categories, namely challenges involved in the contracting process and contracting process management. We used Glaser`s six Cs coding family to represent the data analysis. The findings revealed the causes of the challenges related to contracting process. The consequences are also discussed in the paper. Based on the interview data analysis, we present contracting process management strategies to overcome the challenges related to the contracting process.