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The 3 Phases of Contract Management

Overview:

Introduction

Commercial and business relationships are based on contracts of one type or another. These are becoming increasingly complex, and as trade becomes ever more international, the differences in approach between different legal and contracting systems becomes a greater issue. All business professionals need to understand what a contract does (and does not) require them and the other party to the contract to do, and the consequences for both parties of any failure. This course is intended to provide an understanding of contracting in the English language, but in an international context.

Course Objectives:

At the end of this course the participants will be able to:

  • Develop an understanding of the role of contracts in the business world Explain how contracts are structured.
  • Examine current thinking on contracting structures in an international context.
  • Improve understanding of the main terms and conditions of contracts.
  • Understand the importance of change management and control.
  • Develop an appreciation of the collateral documents that work alongside contracts; including bonds, guarantees, letters of intent etc.
  • Review the latest international thinking in alternative methods of dispute resolution.

Targeted Audience: 

  • Contract managers
  • Procurement professionals
  • Legal professionals
  • Project managers
  • Business analysts
  • Risk managers
  • Supply chain managers
  • Operations managers
  • Finance professionals
  • Executives and upper management are involved in contract decision-making.

Course Outlines:

Unit 1: What are contracts and how are they created?

  • The need for contractual relationships.
  • What is needed to create a valid contract?
    • Offer and acceptance.
    • Intention to create a legal relationship.
    • Written or oral?
    • Other legal formalities in different countries:
      • Signing and sealing.
      • Witnesses.
    • Authority to sign.
    • How to prove authority.
  • The tender process.
  • Involvement of agents.
  • What happens if there is no contract, but work is carried out anyway?
  • Making contracts enforceable – with particular emphasis on the international context.

Unit 2:Structure of contracts:

  • Form of Agreement.
  • General Terms and Conditions.
  • Special Terms and Conditions.
  • Schedules or Appendices.
  • Title (ownership) and risk of damage:
    • When does it transfer?
    • Use of ICC INCOTERMS.
  • Notices and other formalities.
  • Which law and which courts?
  • Different contractual structures.
  • Traditional.
  • New structures used in the Middle East.
  • New structures are not widely used in the Middle East.

Unit 3:Collateral documents:

  • Bonds and guarantees:
    • Tender Bonds.
    • Advance Payment Bonds.
    • Performance Bonds.
    • Warranty Bonds.
    • Parent Company Guarantees.
  • Retention/Withholding.
  • Retention Bonds.
  • Letters of intent.
  • Letters of the award.
  • Letters of comfort or awareness.
  • Types.
  • Who should carry the cover?
  • How should you manage claims?
  • Are banks or insurance companies good enough security?
  • Insurance policies.
  • Assessing the need for financial security in the current economic climate.

Unit 4:Collateral documents (2):

  • Changes to the Contract documents:
    • Need for consent.
    • Assignment/Novation explained and distinguished.
    • Waiver.
  • Changes to the scope.
  • Variation clauses.
  • Notice provisions.
  • Valuation of variations and changes.
  • Claims – what they are, and how they arise.
  • Delay caused by the client.
  • Delay caused by contractor/supplier.
  • Force majeure.
  • Delay and disruption.

Unit 5: Resolving Disputes:

  • Negotiation.
  • Staged dispute resolution clauses.
  • Litigation.
  • Arbitration.
  • New best practices in dispute resolution:
    • Mediation.
    • Conciliation.
    • Early neutral evaluation.
    • Expert determination.
    • Mini-arbitration.
    • Pendulum arbitration.
  • Final questions and review of course.

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