Course details

Overview ?

The Course

In every organisation the commercial and business structure is based on contracts. These may vary from simple purchase orders, or even handshakes, through to highly-complex financing agreements. The development, negotiation and management of these contracts are often in the hands of skilled professionals, but the general managers handling the delivery of the product, service or project may not be fully familiar with the complexities of the documents concerned. This course is intended to allow professional managers with a background other than law or contracts to better understand the processes and issues involved, and therefore improve their overall management skills.

In the programme you will learn how to:

Explore the reasons why we use contracts, and how they can be developed.
Examine different contracting structures, and how they allocate and manage risk.
Review some of the major provisions in contracts, and discuss why they are drafted as they are, and what pitfalls there may be if they are not managed properly.

The Goals

Improve understanding of the structure and purpose of contracts
Show how different structures can be used in different situations
Improve the ability of managers to communicate with and instruct legal and contracts personnel
Explain some of the pitfalls that exist within commonly-used contract clauses

The Delegates

Anyone involved in: Engineering, Project, Construction, Tenders, Contracts, Buyers, Purchasing, Financial personnel, including especially those from a Project Management or General Management background who do not think they yet have a sufficient understanding of contract issues
Those new to the function, preparing for a major project, or experienced managers looking for a refresher

The Benefits

Participants attending the programme will learn:

How to be more effective in selecting contract types and structures
How to ensure risk is properly allocated and managed in different situations
How to anticipate problems and manage risks through the contract
How to integrate the contract within the structure of project management
How to handle disputes and performance issues, including the latest methods of dispute resolution
How to establish appropriate terms and conditions, and what the different provisions in common use mean in practice

The Results

Better ability to communicate with and instruct legal advisers
Better project management skills in the areas where these overlap with contracts
Better general management ability to understand and control contract negotiations and management
Better ability to avoid or resolve disputes

The Core Competencies

Risk identification and management
Understanding legal and contractual terms
Contract management
Project management – where it interfaces with contracts
Negotiation
Dispute resolution

The Programme Content

The programme covers contracts in a range of areas, written in the English language, but used in an international context. The intention is to develop general skills with application to a wide range of contractual situations, and to allow participants to have an awareness of practices in other areas and other industries which may add value to their own situations.

The programme will combine conventional teaching with a high level of participation; including an interactive approach to involving participants in discussion of topics; exercises; and encouraging participants to bring their own experiences forward for discussion and debate.

The Programme Content

Day One

The Basis of Contracting

Why we use contracts
How contracts are formed
- Legal requirements for a valid contract
- Oral contracts
- Electronic contracts
- Incorporating other documents by reference
Terms and conditions of the contract
Authority to contract
The role of agents
Proving authority
Methods of signing – seals, chops etc.
Internal contracts within a Group – some dangers from ignoring the need for formal arrangements

Day Two

Risk and Different Contracting Types

Different types of risk
How to assess and manage risk
- Commercial risk within the contract
- Risk of damage
  - Use of ICC Incoterms to determine when risk passes
- Other risks
Selecting appropriate contract types
Traditional
- Lump sum
- Bill of Quantities/Schedule of Rates
- Reimbursable
Hybrid
Fixed Fees
Economic Price Adjustment clauses
Escalation
EPC/Turnkey
Convertible LSTK
Build Operate Transfer
Alliance/Partnering
No Cure No Pay
Bonds/Bank Guarantees
Parent Company Guarantees
Letters – Intent; Instruction/Award; Comfort; Awareness
Side Letters
Which Law?
Which Courts?
Non-Traditional
Collateral documents
Law

Day Three

Major Contract Terms

Obligation to perform
- Testing and acceptance/rejection
- Defective goods
- Patent and Latent Defects
Limits of liability
Consequential loss
Overall caps
Connection with negligence
Liquidated damages and penalties
People
Property
Indemnities – what they mean, and why they are important
Ownership of existing rights
Ownership of rights created under the contract
Dealing with claims of breach
Insurance, and how this links with indemnities
Intellectual property
Warranty and rework
Force Majeure
Notices
“Entire Agreement” clauses
Implied Terms – some examples