Managing risk under commercial contracts without proper guidance can be daunting. Not only will there be the need to consider productivity and business drivers — such as the desire to increase revenue and reduce costs — but from a legal perspective, there is the ever-present need to avoid disputes and litigation.
There are a few general principles that can assist with establishing a governance process around an organisation’s commercial contracts. Having such a process in place can help ensure that the management of risk under those contracts is a relatively straightforward and cost-effective exercise. If risk is properly managed at the front-end of contract negotiations, it may be possible for an organisation to avoid (or at least be in a position to carefully manage) potential disputes and litigation.
