IACCM Contract Management Forum

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Seplat Petroleum Development Company Plc
2020-03-30 21:29:36

Legal department approach to risk

I have been having a running battle with the legal department in the company where I work for over nine months, on the need to have a simplified contract document of no more than 10 pages, than the current 72 pages contract document. The general terms of contract are usually the same for all contracts; only the scope of work, vendor details changes. My proposal is that the general terms should be warehoused somewhere, electronically, for the vendors to read and incorporate it by reference in the no more than 10 pages contract we will sign with them.
I have observed their opposition is based on the way they see risk: prevent all possible risks. This approach creates more "risks" in the form of not executing the contract document in time, leading to delay in the start and completion of project works. This runs counter to the business environment where speed is required. Risk should be seen as inevitable. Then seek ways to manage it.
 •  World Commerce & Contracting  •   2020-03-31 12:16:48

I agree that simplification is the only way to go. More and more companies are realising the benefits of reducing sales cycles, negotiation times etc together with ease of understanding of contracts by key stakeholders and customers.

I agree that too much emphasis is often placed on covering off risk when a certain amount of risk is an element of all contracts. Managing that risk in an intelligent manner is key and part of that management is using the right contract terms for the relevant offering. IACCM's VCU Framework will help companies to manage uncertainty through contracts.

We would welcome the opportunity to explain the benefits of contract simplification and design together with the VCU Framework to your senior business and legal teams. Please reach out to me personally if you would like to discuss. My email is pdoyle@IACCM.com

Best regards

Paula Doyle
VP and Global Head of Research and Analytics
Replies: 1
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