Introduction

All areas of the commercial world are involved, directly or indirectly, with Contracts. They are the key business tool that is used to structure and manage business relationships between different companies, and even between companies in the same Group.

Everyone involved in making business decisions, and in instru

cting or seeking advice from specialist lawyers, needs to understand contract principles.

A failure to grasp these essentials may lead to misunderstandings that have legal consequences. Lack of clarity in the Contract wording, which could have been avoided by a different approach to drafting, is a frequent source of contract dispute.

One of the major problem areas concerns contract variation – requests for change orders for work that is claimed to be outside of the original Scope of Work. The program will devote particular attention to this topic, giving delegates the opportunity to practice their drafting and negotiating skills in a role play concerned with contract change.

The Contract Law for Business training course is intended to increase the knowledge of all those involved in the contracting process, and to improve their skills in understanding, negotiating, managing, and drafting Contracts.

Goals

TRAINING OBJECTIVES

• Provide an understanding of different types of contracting structures, and how and why contracts are drafted in particular ways.
• Enhance understanding of the legal principles behind contracts.
• Develop an understanding of why contracts are amended, and how to negotiate these changes.
• Allow Delegates to gain hands-on experience in analyzing and amending different types of contract clauses.
• Explain the commercial impact of particular provisions.
• Develop an understanding of the skills required to write successful contract clauses.

Training Methodology

The facilitator will deploy a full range of lively and interactive training methods, including exercises, role plays, case studies, contract drafting sessions and group discussions.

Each topic will be underpinned by a presentation that highlights key issues to focus on. The learning experience will be supported by a reference manual containing templates and examples of best practice. Participants will make presentations and receive personal feedback on their performance.

Model contracts will be reviewed and analyzed. Alternative approaches will be considered. Real examples of bespoke contracts from the petroleum industry will be discussed. Delegates will work on drafting clauses, or on reviewing and modifying real clauses from Model Form contracts, including those in use within the client’s business.

Delegates are encouraged to bring real examples with them and to share their experience of particular issues in their company or industry.

TRAINING SUMMARY

Contract creation and drafting will be more effective: by increasing the expertise of personnel involved in contract management, clearer instructions can be given to lawyers, and the final contract document can be more focused to the company’s needs.

Those involved in negotiations with bidders will have a better understanding of the issues involved when discussing contract wording, will have the ability to discuss drafting issues with confidence, and to make decisions with the assistance of advice from lawyers.

Scope of Work documentation will be better written, so that contractors and suppliers have less opportunity to demand change orders and fewer claims and disputes will occur.

Contract management systems and skills will be enhanced, improving the efficiency of contract management, and providing necessary support to project management activities.

The number of disputes arising from poor contract wording will be reduced. Dispute avoidance skills will be enhanced, and if disputes do arise the organization will be better positioned to address them through negotiation and discussion.

Program Content

Day 1 - Contract Basics

• Why do we use contracts.
• Key steps in the formation of a contract.
• Typical contract structure.
• Standard Form contracts.
• General and special terms and conditions.
• Why contracts are amended.
• Enforceability of contracts.
• Contract examples
  • Contracts for the purchase of goods.
  • Services contracts.
  • Construction contracts.

Day 2 - Main Contract Clauses

• The next two days will involve analyzing example clauses and considering how they apply. Delegates will be able to practice drafting clauses. The areas covered will include: 
• Obligations to deliver/perform.
• Clauses that deal with non-performance.
• Suspension and termination.
• Liquidated damages and penalties.
• Clauses that transfer risks.
• Warranty clauses.
• Product liability and defective goods – acceptance and rejection.
• Indemnities.
• Payment clauses.

Day 3 - Supporting Contract Clauses

• Limitation of liability.
• Contract Variations and changes.
• Dispute resolution clauses.
• Force majeure.
• Intellectual property.
• Confidentiality clauses.
• Entire agreement.
• Jurisdiction and choice of laws.
• Court interpretation of and interference in contracts.

Day 4 - Drafting and Changing the Scope of Work

One of the key areas of the contract may not be seen by the legal department: the Scope of Work. Badly drafted scopes of work can lead to requests for change orders that have a severe financial impact on the contract owner. Day 4 will look at:

• Drafting the scope of work correctly in the Invitation to tender.
• Avoiding ambiguity.
• Properly allocating risks to the parties.
• Defining levels of service.
• Contract variation clauses.
• Negotiating change orders – what to do when the contractor asks for a variation.

Day 5 - Standard Forms, Surety Contracts and Informal Agreements

Using Standard Form Contracts

• Selecting a suitable standard form.
• Necessary additional documents.
• Common Standard Form contracts:
  • JCT.
  • FIDIC.

Using Standard Form Contracts

• Selecting a suitable standard form.
• Necessary additional documents.
• Common Standard Form contracts:
• • JCT.
  • FIDIC.

Bonds, bank guarantees and security arrangements

Using Standard Form Contracts

• Selecting a suitable standard form.
• Necessary additional documents.
• Common Standard Form contracts:
  • JCT.
  • FIDIC.

Bonds, bank guarantees and security arrangements

• Collateral contracts to support the main agreement
  • Tender Bonds.
  • Performance Bonds.
  • Advance Payment Guarantees.
  • Retention Bonds.
  • Letters of Credit.
  • Other financial guarantees.

Using Standard Form Contracts

• Selecting a suitable standard form.
• Necessary additional documents.
• Common Standard Form contracts:
  • JCT.
  • FIDIC.

Bonds, bank guarantees and security arrangements

• Collateral contracts to support the main agreement
  • Tender Bonds.
  • Performance Bonds.
  • Advance Payment Guarantees.
  • Retention Bonds.
  • Letters of Credit.
  • Other financial guarantees.

The contractual status of Informal agreements

Using Standard Form Contracts

• Selecting a suitable standard form.
• Necessary additional documents.
• Common Standard Form contracts:
  • JCT.
  • FIDIC.

Bonds, bank guarantees and security arrangements

• Collateral contracts to support the main agreement
  • Tender Bonds.
  • Performance Bonds.
  • Advance Payment Guarantees.
  • Retention Bonds.
  • Letters of Credit.
  • Other financial guarantees.

The contractual status of Informal agreements

• • Letters of Intent.
  • Memorandum of Understanding.
  • Side Letters and Letters of Comfort.