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Contract Risk Considerations

In business, commercial interactions presuppose the intent is a contractual one and certainly the most effective way to achieve a commitment is in the form of a contract, however let’s consider the risks:

  • As authorised signatory did you expect other authorising line managers to have fully read and understood the contract terms and to have investigated possible business risks before the documents came to you for final approval? What evidence do you have this was done satisfactorily?
  • Did you fully appreciate what you were agreeing to or did you rely on certain information from others?
  • Has the concept been socialised amongst all key stakeholders? Do you have their acceptance?
  • Who is going to have accountability for the contract performance after execution?
  • What is the business risks associated with this agreement?
  • How often is the contract or the supplier’s performance going to be reviewed?
  • What is the process for measuring your businesses performance against the terms and obligations contained in the contract?
  • What are the key performance indicators for your company? How do you measure risk?
  • Have core business impacts been properly assessed?
  • Are all stakeholders aware of the company’s obligations contained in the contract?
  • Are your businesses risks still the same as when the deal was signed?
  • What happens if the agreement is not working, can it be changed?
  • Do you even have a contract or formal agreement in place? Where is it?
  • Can it be terminated, effectively?
  • What 'skin' does the supplier have in the 'game'?