For most businesses, the ability to win contracts with assistance in commercial contracts. Good contracts offer a framework for successful relationships and provide structure for subsequent performance.
Over the years, it has shown the effect of new regulation, of economic recession, of geopolitical insecurity, of shifts in technologies and business offerings. Yet it has also confirmed an underlying tendency for negotiators to focus on issues of risk consequence – and in so doing, to undermine the value that contracts can deliver.
Yet old habits die hard and many organizations continue to operate with highly fragmented commitment processes, with ‘the contract’ viewed as a legal or administrative output. As a result, relationships often suffer from the wrong form of agreement, inappropriate terms and conditions and poor management of performance and governance standards.
It is time for executive management to shift focus from internal operations onto external effectiveness and the integration with trading partners. The contracting process offers the route to this integration, through insights to market needs and value as well as actual performance standards and capabilities.
Winning contracts, placing contracts with suppliers, executing on contracts – the ability to undertake these activities successfully lies at the heart of any sustainable organization. Shifting business models are making capabilities in these areas ever more critical.
In the past, executive surveys revealed that most CEOs saw little importance in contracts except for their symbolic value in winning business. The exception to this was if they perceived significant risk or uncertainty. Today, risks and uncertainties abound – ranging from a myriad of regulations, through increasing internationalism in trade, into contracts that often commit to long-term outputs or outcomes. For many, gone are the days of simple commodity supply; the contracting process has become critical to addressing a wide array of business risks – financial, legal, regulatory and performance.
Good contracts offer a framework for successful relationships and provide structure for subsequent performance. It is time for executive management to shift focus from internal operations onto external effectiveness and the integration with trading partners. The contracting process offers the route to this integration, through insights to market needs and value as well as actual performance standards and capabilities.
The significance of contracting with suppliers continues to grow, as a higher proportion of revenue is spent on external supply (in some industries, as much as 80%). But this is only part of the story because steadily, the role and importance of contracts has increased and the complexity of performance has also grown,
Uniform Commercial Code
Assignment of Interest
Assignment of Contracts
Amendments and Addendum
Asset Purchase Agreements
Bill of Sale
Joint Operating Agreements (JOA)
Letters of Intent (LOI)
Policy and Procedures
Purchase Order Agreements
Statement of work (SOW)
Warranty and Limited Warranty Agreements
Oil and Gas contracts
Gas station contract
Master Service Agreement
Production Sharing Contracts (PSC)
Architect /Engineer/Construction Contracts
Release of liability
Contract extension agreement
General liability/Release of claims
Invitation to Bid
Joint Bid Agreements
Mutual Release and Rescission Agreement