Contractual Risk Management

Course Objectives

• To enable the participants to determine the elements of the contract risk management procedure
• To enable the participants to draw a parallel between contract management and contract risk management
• To highlight the effective ways to detect, assess, reduce, and monitor contract risks
• To recognize and describe the many ways in which contract risks manifest
• To enable comparison between different strategies for identifying and measuring risk
• To assess the consequences of various measures when allocating risk
• To understand the effects of various risk-allocation strategies
• To highlight techniques of risk transfer in contract management
• To develop the ability to comprehend real contract management requirements and client accountability
• To facilitate better communication between the commercial, technical, and legal departments to handle issues throughout the lifecycle of a contract

 Understanding and Detecting Contracting Risk

• Different types of risks in risk management
• Contractual Relationships: What You Need to Know
• Both sides of a contract have risk categories established.
• Risk assessment procedure
• Management of risks

Transferring and Minimising Risk

• Risk is transferred through several contract types
• Contracts with a lump sum payment or a hard fixed price
• Contracts: reimbursable costs
• Incentive Contracts as a Concept
• Arrangements for Pricing: Award fee
• Indemnities as a concept
• Description of the Cross Indemnities Concept: Insurance

Types of Contractual Risks

• Financial contract risk
• Value leakage
• Legal contract risks
• Reputational contractual risks
• Controversial contract terms
• Security contract risk

Conditions and Phrases Associated with Risk

• Events on a larger scale
• Force majeure
• Strikes and labour disputes
• Title and danger
• Assignment and novation
• Clauses for subcontractors
• Risks linked with subcontractors

 Dealing with Financial Risks

• Payments: Managing the risks associated with payments
• Currency dangers
• Economic Risk as a Concept
• Corruption and deception
• Excluding or restricting liability
• Distinctions between contract liability and general liability
• Common law and the distinctions between contract and tort responsibility