INTRODUCTION
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)
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
PROGRAMME OBJECTIVES
·
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
TRAINING METHODOLOGY
The programme will combine
conventional teaching with a high level of participation; including an
interactive approach to involving participants in discussion of topics;
exercises; and encouraging participants to bring their own experiences forward
for discussion and debate.
PROGRAMME SUMMARY
·
Expanding
the expertise of personnel involved in contract negotiation and management will
allow tender preparation to be more effective, as clearer instructions can be
given to lawyers, and the final document can be more focused to the company’s
needs
·
Documents
will also be more effective if all parties involved in their preparation and
approval are confident in their understanding of the potential effect of
important clauses, and of best practice in the area concerned
·
Skills
learned on the course will allow contract negotiations to be conducted with
more confidence, and with the ability to deal with issues quickly and with
certainty, thus reducing the time taken to bring negotiations to a conclusion
·
Non-lawyers
will find it easier to instruct and work with specialist lawyer colleagues,
improving the performance of both parties
·
Dispute
avoidance skills will be enhanced, as will the ability to manage such disputes
as do arise in an effective manner
·
Delegates
will be introduced to some of the latest international practices in dispute
resolution, and shown how to build such practices into their contract documents
·
Heighten
understanding of the meaning of contract wording, and the inter-relationship
between clauses, and why contract law is important to you as either a Buyer or
a Seller
·
Increase
working knowledge of risk, legal implications and liabilities
·
Improve
confidence in handling negotiations on contract wording, and an understanding
of how contract wording is developed
·
Improve
understanding of different approaches to important issues in contracts
·
The
use of indemnities and insurance arrangements in major contracts, particularly
in the oil and gas industry, in an international context.
·
Help
develop general skills with application in these areas, and to allow
participants to have a better understanding of these important provisions,
which are frequently not understood by those operating the contract on a day to
day basis.
PROGRAMME OUTLINE
|
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
|
|
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
|
|
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
|
|
DAY 4 -
INDEMNITIES
·
Meaning
of indemnities
·
Making
indemnities work – irrespective of negligence or breach of duty (thePiper
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
|
|
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
|
