Managing Contract Risks and Ensuring Compliance

Introduction:

Managing Contract Risks and Ensuring Compliance is critical in ensuring that both owners and contractors effectively identify and control risks, achieving satisfactory project outcomes. Signing a contract does not eliminate risks; instead, a contract can only outline foreseeable risks, assign responsibility for managing them, and specify the consequences if those risks materialize. This Contract Risk Management and Compliance course focuses on equipping participants with the knowledge to manage risks associated with contracts, ensuring successful project results.

Objectives:

At the end of this Managing Contract Risks and Ensuring Compliance course, participants will be able to:

• Understand the concept of risk in contract management.
• Compare risk identification and analysis techniques.
• Evaluate the impact of various risk allocation methods on contract compliance.
• Identify contract types suitable for risk transfer in advanced risk management.
• Assess risk management tools, including contractual provisions.
• Address equity and contractual compliance issues in case of default or changes.

Training Methodology:

• Case studies
• Interactive workshops
• Exercises on risk assessment
• Group sessions
• Casuistry
• Simulation
• Expert inputs
• Scenario evaluation

Course Outline:

Unit 1: Types and Management of Risk

• The importance of risk in contract risk management.
• Risks for both parties in a contract.
• Managing risks using risk management tools.
• Basic principles of compliance risk management.
• Internal controls for managing contract risks.
• Relationship between risk management and contract management.

Unit 2: Minimizing and Transferring Risk

• Methods of risk transfer: contract types.
• Fixed-price vs. lump-sum contracts for measurable risks.
• Aligning objectives and controlling contract risks.
• Risk management tools: indemnities and insurance.
• Use of cross indemnities and insurance.

Unit 3: Terms and Conditions Related to Risks

• External risks and their management.
• Force majeure and other risk clauses.
• Impact of industrial actions and title risks.
• ICC terms and contract compliance measures.
• Management of risks related to subcontractors and other parties.

Unit 4: Financial Risks Management

• Payment-related risks and currency risk in international contracts.
• Economic risks and fraud management.
• Liability under contracts vs. general law.
• Impact of "wanton misconduct" on compliance.
• Understanding contract risks through standard documents.

Unit 5: Remedies for Contract Risk Issues

• Addressing errors and omissions in risk management.
• Doctrine of impossibility of performance and its role.
• Common solutions and remedies for contract risk compliance.
• Role of liquidated damages and warranties in contract management.
• Management of risk events and coverage.