Management of Contract Risks for Successful Contract Closure

This programme can run as an online or classroom training (Available also for Customised Training by Duration, Venue and Fee)

Contract risks in business relationships are any uncertainties about the future that threaten the ability to accomplish a contract’s mission. They can emanate from both parties or even from a third party. So, in the management of contracts note should be taken that risks are shifting from a compliance “management” to a “governance” perspective. It is always important to ensure that contract conditions and terms are met.

Course Contents

Day One

Components of a Valid Contract

• Underlying economics of the contract

• Competent parties

• Legal purpose

• Offer and acceptance

• Consideration

Contract Risks and Why They Arise

• A Contract’s lifecycle

• Common underlying causes of contracting risks

• Identify the risks

• Analyse the risks

• Evaluate and prioritise risks

Types of Contract Risk

• Cost overruns

• Quality failures

• Bad planning

• Ill-informed buying

• Deliberate contract manipulation

• Misinformation or miscommunication

Establishing the Context

• Balancing risks and opportunities in a commercial contract

• Costly or difficult commitments

• Acting in the best interest of own principal

• Ascertaining the business opportunities behind a contractual relationship

• choice of the right contractor and/or subcontractors

• Prudent control strategies to mitigate contract risks

Treat the Risks

• Specific language of the agreement – the clauses

• Legal knowledge

• Equitable compensation against embedded risk

• Independent reviews.

Day Two

Assessment of a Contract’s Potential Risks

• Low, moderate, high, extreme

• How likely

• How frequently

• Possible effects

• Risk appetite and financing mechanism for unintended losses

Transfer of Associated Risk Exposures

• Indemnification

• Limitation of liability

• Waiver

Contract Insurance and Risk Cover

• Size and scope

• General commercial

• Professional

• Environmental

• Construction

• Fidelity

Financial Limitations of Aggravated Risks

• Death

• Bodily injury

• Breach of security

• Breach of confidentiality

• Infringement of intellectual property

• Data loss.

Day Three

Making Sure the Contract Delivers

• Constant and quality information

• Regularly reviewing your contract

• Management of your suppliers

Risk Management in Key Areas

• Prevention of financial loss

• Disaster recovery

• Business continuity

• Corporate crisis

• Health and safety

• The Environment

Risk Sharing

• Subcontracting

• Outsourcing

Contract Review Checklist

Corporate Policy for Contracts Risk Management.