According to Contract Management Benchmark Report from Aberdeen Group, poorly constructed clauses incur huge business losses to as high as “$153 billion per year in missed savings, opportunities and increased risks”. In addition, many companies are faced with difficulties to increase their profit margin when negotiating for better terms and fees while holding their suppliers accountable when potential contract breach or dispute arises.
The problem here is that most companies faced difficulty in drafting, structuring and managing an effective, well-structured commercial contract due to poor use of contractual language, unclear contract clauses and ambiguous provisions. In addition, companies are hindered by the lack of knowledge and techniques in structuring and developing good negotiation and risk mitigation strategies to increase profitability and hold your supplier accountable when contract disputes and complications arises.
Without in-depth knowledge and good application techniques of effective drafting and fee negotiation skills, companies may face project delays, miscommunication, misunderstanding and adverse business impacts such as profit loss and high legal charges.
Designed for non-legal professionals, this comprehensive 2-day program will help you master contract drafting and negotiation. You will gain understanding of working parts of a valid contract, how to draft sound and watertight commercial contracts, and negotiate effectively to help your company achieve the intended commercial outcomes, benefits and profitability.
Led by Michael Twomey, widely recognized as leading contract lawyer with over 25 years of immaculate track record, he will show you effective techniques and frameworks to draft clear, concise and unambiguous clauses consistently and coherently by understanding the legal language, the local contract law context and how to align it to your business objectives. You will also learn to adapt relevant and reliable drafting precedents to save time and trouble while avoiding common errors, omissions, and ambiguities that may jeopardize the agreement. Furthermore, you will acquire best-in-class negotiation techniques to successfully steer your negotiation to a desirable binding contract that enhances your business profitability and effectively mitigating any potential legal risks and disputes that may arise.
Packed with real-life case studies and interactive discussion sessions, you will leave this program strong legal knowledge and powerful negotiation techniques that will improve your skill, efficiency and confidence in drafting an effective contract and negotiating for greater profitability while protecting your organization’s interest.
Ensuring Profitability in the Contract: Key Clauses and Identifying Risks
· Case study identifying the key provisions
· What are the risks and how can the contract provide for them?
· What will be your negotiation strategy and how will the other side respond?
· What conditions should be satisfied prior to signing the agreement?
· What are the liabilities associated with pre-contract negotiations?
Identification of and Provision for Changes That Could Affect Value
· Known knowns, known unknowns, and unknown unknowns
· Providing for the foreseeable – identifying and drafting express terms
· Providing for the unforeseeable – what are the options?
· Reasons for change and how to prevent change affecting profitability
Risks of Not Identifying and Managing Change Effectively
· The risks of doing nothing – a trap for the unwary
· The risks of doing something
· Variation – what does that contract say and can we rely on it?
· Waiver – does the no-variation clause work?
· Protective provisions in the contract
· Effect on guarantees and performance bonds – caution needed!
Dealing with Change – Price Variation
· Drafting effective price variation provisions
· Dealing with increased costs – options
· Proposal, assessment, evaluation and agreement
· Setting out a clear and workable process
· Change orders and extensions of time
· Formal change control procedures – ensuring the provisions work
· Ensuring strict compliance with the provisions
· Service Level Agreements and other mechanism for adjusting payments
· Liability for changes – legal issues
Preserving Value and Preserving the Contract
· Negotiations to manage change
· The legal issues relating to negotiations
· Care needed to avoid inadvertent agreements and liability
· Renegotiation: variation, novation or replacement
· Identifying and assessing the options
Resolving and Managing a Dispute
· What does the contract say?
· Assessing the options
· Resolving the dispute though mediation, expert determination, of other methods
· Arbitration or litigation?
· Essential commercial and legal concerns
· The vital steps and tactics when a dispute arises
Terminating an Unprofitable Contract
· What does the contract say?
· Can you terminate for convenience and how?
· Can you terminate for cause?
· What is the cost of termination?
Liability – the Cost of Breach
· How are damages assessed?
· What are liquidated damages and are LD clauses effective?
· Have the parties limited or excluded liability?
· Are the clauses effective?
· Assessing the likely outcome of litigation or arbitration