Understanding Effective Contract Evaluation

The Managers Guide to Understanding Effective Contract Evaluation gives managers and employees an understanding of how organizations review and evaluate contracts in the course of business.

The current climate of business is one of heightened awareness of risk and of continued attempts to outsource and transfer such risk, wherever possible. Failure to detect attempts to unfairly transfer such risk can have devastating effects upon an organization. Executives do not wish to be exposed to personal liability for having committed their company to a major loss-making contract or one that lacked basic and necessary safeguards. Worse still would be the case where valuable proprietary rights were actually surrendered.

The differences between the competing methods that organizations employ in the evaluation of contracts are explained. The merits and disadvantages of these differing methods are considered, as well as illustrating the impact of each method on the effectiveness of the contract evaluation process.

By gaining an understanding of these methods, the reader will be equipped to consider the effectiveness of their own organization’s methods and to assist in reassessing and improving them.
Other key points:
Not all managers and employees understand the nuances of contract documents. Indeed, some have been encountering them for many years, sometimes without an appreciation of their full significance and potential ramifications.
Reactive or proactive?
When dealing with contracts, it all comes down to whether your organization wishes to be reactive or proactive:
** Does your organization focus on plugging holes after they have been seen and their effects have been felt? If your answer is “yes” you belong to a reactive organization.
** Does your company focus on finding holes before they leak and cause a disaster? If your answer is “yes” you belong to a proactive organization.

It is a simple difference in execution, producing a drastic difference in outcome. This is the very essence of devising and implementing effective risk management strategies.

The focus of this book is on organizations adopting a proactive mindset and attitude to contractual risk planning.

In contract evaluation, preventative measures and safeguards are the best tools available.

Once you have committed to an unduly onerous contract that has not been properly scrutinized, it is often too late to renegotiate. Remembering that you cannot “unring” the proverbial bell.