Introduction

One of the major functions of contracting is to ensure that risks to owners and contractors are identified and managed in a way that both parties are satisfied with the project outcome. While a contract cannot, of itself, make risk “go away”, it can, and should, identify the risks, determine who is responsible for managing each individual risk, and for the consequences should the risk occur. We developed this interesting and fast-paced course to provide participants with:

• Critical understandings of the risk mitigation process.

• Knowledge to move contracts from the tactical to a more important strategic focus.

• Ability to identify risks that can arise.

• Skills in allocating contract and procurement risk.

• Examples of Contract Terms and Conditions which allocate risk.

Course Objectives 

The Primary Objectives of the Course are to help Delegates to:

• Provide an understanding of how risk arises·

• Compare different methods of identifying and assessing risk·

• Review the impacts of different approaches to risk allocation·

• Explore different Contract types to transfer risks·

• Consider the contractual techniques to ensure effective risk allocation·

• Review risk management techniques during the life of a contract·
   

Target Audience 

• Contract managers and administrators
• Legal advisors and in-house counsel
• Procurement and sourcing professionals
• Risk and compliance officers
• Project managers overseeing contractual obligations
• Professionals involved in negotiation, insurance, and indemnity management
• Senior executives responsible for governance and contract oversight
   

Outlines:

Day 1: Types and Management of Risk

• The Need for Contractual Relationships

• Defining Risk

• Categories of R for Both Sides of a Contract

• Risk Assessment Process

• Managing Risk

• Qualifying Suppliers

• Defining Internal Control

• Proportionality of Control

Day 2: Minimizing and Transferring Risk

• Transferring risk through Contract Types

• Firm Fixed Price or Lump Sum Contracts

• Cost reimbursable Contracts

• Incentive Contracts

• Award-Fee Pricing Arrangements

• Indemnities

• Cross Indemnities

• Insurance

Day 3: Risk-Related Terms & Conditions

• External events

• Force majeure

• Strikes and other labor disputes

• Risk and Title

• Use of ICC Incoterms

• Assignment and Novation

• Other clauses that need to flow down to sub-contractors

• Risks associated with Sub-Contractors

Day 4: Dealing with Financial Risks

• Controlling Risk Associated with Payments

• Currency Risk

• Economic Risk

• Fraud and Corruption

• Limiting or excluding liability

• Distinctions between liability in contract, and the general law

• “Gross negligence”

• A review of some sample clauses from standard contracts, and other real documents

Day 5: Remedies When Bad Stuff Happens

• Mistakes and Misrepresentations

• Impracticability of Performance

• Remedies Generally

• Types of Remedies

• Liquated damages

• Warranties

• Cover

• Discussion of real examples (delegates are encouraged to bring real or made up examples for discussion)

• Review of course and question and answer session