As businesses increasingly delegate various functions through outsourcing, it is crucial to ensure that the contracts associated with these activities deliver the expected services and/or products. Those responsible for overseeing procurement and supply face a fundamental challenge in identifying, monitoring, and effectively managing contractual risks.

This training course on Contract Risk Management & Compliance aims to equip individuals involved in the contracting function with the skills to appropriately assign risks to responsible parties and manage them in the most effective manner. While a contract cannot eliminate risks entirely, it plays a vital role in categorizing risks, specifying responsibilities for risk management, and outlining the consequences in the event of risk occurrence. Contractual risks and uncertainties are pervasive, spanning complex regulatory procedures, heightened globalization, intricate supply chain networks, to contracts influencing strategic outcomes and competitive advantages.

In the realm of business, contract management has emerged as a critical aspect for mitigating various risks—be they strategic, operational, compliance-related, financial, reputational, or legal. At the heart of every business relationship lies a contract delineating formal responsibilities assumed by companies. However, numerous businesses persist in operating with suboptimal contract management practices, often perceiving contracts merely as legal and administrative challenges.

The participants will attain the following goals:

• Grasp best practices for mitigating risks.
• Acquire the ability to shift contracts from a tactical approach to a more pertinent strategic perspective.
• Define the competencies required to identify potential risks.
• Utilize skills in allocating risks associated with contracts and procurement.
• Categorize contract terms and conditions that assign risk.
• Comprehend the distinction between contractual risks overseen by the contract and those overseen by the project.
• Implement the principle of placing risk where it can be optimally managed.
• Explore risks and opportunities throughout the entire contract life cycle, including the dynamics of risk transfer.

Participants will enhance their skills through diverse instructional approaches, such as lectures, case studies/exercises, the examination of published articles, checklists, and group discussions addressing contemporary practices and their correlation with the application of novel concepts.

They will be urged to contribute authentic instances of challenges on a confidential basis for discussion and to share their insights into specific issues within their company or industry.

DAY ONE: RISK TYPES & MANAGEMENT

• Defining Risk
• Organizational Imperatives for Contractual Relationships
• Diverse Categories of Contractual Risks
• Risk Assessment Process
• Risk Management Procedures
• Qualifying Suppliers: Evaluation Protocols
• Internal Control Defined
• Shared Control Dynamics

DAY TWO: RISK MINIMIZATION AND TRANSFER

• Risk Transfer via Contract Types
• Firm Fixed Price or Lump Sum Contracts
• Cost Reimbursable Contracts
• Incentive Contracts
• Award-Fee Pricing Arrangements
• Indemnities
• Cross Indemnities
• Insurance Strategies

DAY THREE: TERMS & CONDITIONS RELATED TO RISK

• External Events Impacting Contracts
• Force Majeure Considerations
• Strikes and Labor Disputes
• Risk and Title Provisions
• Assignment and Novation
• Other Clauses Applicable to Sub-contractors
• Risks Linked with Sub-contractors

DAY FOUR: ADDRESSING FINANCIAL RISKS

• Managing Payment-Related Risks
• Fraud and Corruption Mitigation
• Liability Limitations or Exclusions
• Contractual vs. General Law Liability Distinctions
• Gross Negligence Awareness

DAY FIVE: REMEDIES FOR UNFORESEEN EVENTS

• Addressing Mistakes and Misrepresentations
• Impracticability of Performance
• General Remedies Overview
• Types of Remedies Available
• Liquidated Damages Considerations
• Warranties Examination