20 - Management of Contracts
Management of contracts is an important aspect of controlling Liability exposures. Written contracts can transfer legal liability for activities from one party to another. Acceptance of Indemnity or "Hold Harmless" clauses can result in major liability exposures. Contracts can cover Provision of Services, Sale/Purchase of property, Leases, Performance Guarantees etc. Legal review by an experienced, independent contracts lawyer is a worthwhile investment with complex contracts.
What do we look for?
- Contracts signed without proper review.
- Acceptance of inappropriate customer Conditions of Purchase.
- Lack of training for staff involved with contracts.
- Management assessment of all contracts.
- Legal review wherever appropriate.
- Use of Standard Conditions of Contract where possible.
- Good document retention procedures.
- Legal review by an experienced, independent contracts lawyer is a worthwhile investment when dealing with complex contracts.
- For major contracts, a sign-off procedure should be implemented to make sure that the head of all relevant departments has a chance to review contracts before they are executed.