Course Description
In every organisation care is taken to manage
risks, by seeking to eliminate those that can be removed, and reducing and
managing the remainder. Part of this process involves developing robust
contracts which apportion risk equitably and include a structure of indemnities
with contractors, supported by a comprehensive insurance regime. In addition,
it is important that contract personnel understand contractual risks and what insurance
can (and cannot) do to remove the financial consequences of such risk;
remembering always that insurance only mitigates the effect of risk, it does
not make the risk itself go away. This programme is designed to:
· Provide
an understanding of contract structures, and how and why contracts are drafted
in particular ways
· Enhance
understanding of the legal principles behind contracts
· Provide
an understanding of some of the main clauses in different types of agreements
· Explain
the commercial impact of particular provisions
· Explore
the usual models for indemnity regimes in international contracts
· Enable
participants to understand the significance, and limitations of such regimes
· Help
participants to understand the meaning of insurance arrangements, and the
terminology used
· Ensure
participants appreciate the effect of insurance, and it limitations in the
management of risk
· Explain
how to use contract provisions to reduce the risk of disputes
· Where
disputes do arise, show how the contract can be used to minimise these
disputes, and some of the methods by which disputes are resolved in
international contracting (including non-traditional approaches, such as
mediation)
Course Objective
· A
more in depth understanding of the elements of a contract
· How
to analyse complex contact documents, and understand the inter-relationship
between clauses
· How
to develop effective indemnity regimes
· Appropriate
type and form of indemnities in different contracts
· How
to use indemnities to manage risks
· The
limitations of indemnity clauses
· How
to link indemnity and insurance arrangements
· What
types of insurance are available in a contracting context
· How
to develop insurance clauses
· The
latest thinking in dispute resolution techniques
Who Should attend?
· This
intensive 5-day programme is suitable for all personnel involved with
contracting, whatever their background:
o Engineering
o Projects
o Construction
o Tenders
o Contracts
o Legal
o Insurance
o Risk Management
o Buying
o Purchasing
· Those
new to the function, preparing for a major project, or experienced managers
looking for a refresher will also benefit from this programme
Course Outline
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DAY 1 -
Commercial Risk and Mitigation through the
Contract
· The
need for contracts
· Identifying
risk
· Risk
mitigation or impact mitigation?
· Title
· Incoterms
· Intellectual
property
· Types
and nature of contracts
· Definition
of terminology i.e. Conditions of contract & terms of contract etc
· Different
legal systems – how to look for common practices but understand the
differences
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DAY 2 -
How and why Contracts are Drafted
· Why
we use contracts
· Formation
of a Contract
· Oral
or written?
· The
key elements of a contract
· Terms
and Conditions of contract
· Liquidated
damages/penalties
· Limits
of liability
· Suspension
and termination
· Acceptance
and Certificates
· Guarantee/Warranty/Maintenance
· Agency
issues
· The
basic structure of a contract
· Incorporating
documents by reference
· Standard
Forms
· Incorporating
tender documents
· Letters
of Intent or Award
· Letters
of Comfort or Awareness
· Side
Letters
· Bank
bonds and Guarantees
· Parent
Company Guarantees
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DAY 3 -
Insurance
· The
purpose of insurance
· What
insurance covers, and what it does not
o Limits on cover
o Duty to disclose
information
o Meaning of "All
Risks”
· Relationship
with risk management
· Types
of insurance used in contract clauses
o Workmen’s
compensation/employers’ liability
o Third party/liability
insurance
o Property damage
o Professional
indemnity/errors and omissions
o Construction All
Risks
o Motor and aviation
o Marine insurance
o Hull and machinery
o Protection and
indemnity ("P&I Clubs”)
· Other
relevant insurances
o Pollution
o Goods in transit
o Business interruption
o Unfair calling cover
(bonds and guarantees)
o Export credit
insurance
· Insurance
for projects
o Who arranges?
o For whose benefit?
o Extension to
subcontractors (National Oilwell case)
o Terms – involving
contractors
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DAY 4 -
Indemnities
· Meaning
of indemnities
· Making
indemnities work – irrespective of negligence or breach of duty (the Piper
Alpha litigation)
· Link
with insurance
· Cross
indemnities
· Personnel
· Property
· Catastrophe
risks
o Value of covenant
o Issues with
indemnities under Civil Law system
· Third
parties
· Liability
in negligence – relationship with contract conditions
· Claims
handling
o Managing claims under
project policies
o Making timely claims
o Information
o Involving insurers
o Resolving disputes
o Self insurance
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DAY 5 -
Resolving Disputes
· Negotiation
· Staged
Dispute Resolution clauses
· Litigation
· Arbitration
· Enforcement
of Judgments and Awards
· New
best practices in dispute resolution
o Mediation
o Conciliation
o Early Neutral
Evaluation
o Expert determination
o Pendulum Arbitration
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