The definition of Contract is given under S2 h of the Indian Contract Act 1872 which provides a contract is an agreement enforceable by law Whereas an agreement has been defined under S 2 e as follows every promise and every set of promises forming consideration for eac ID: 1002174
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1. CONTRACT MANAGEMENTCORPORATE
2. The definition of Contract is given under S.2 (h) of the Indian Contract Act, 1872 which provides ‘a contract is an agreement enforceable by law’. Whereas an agreement has been defined under S. 2 (e) as follows: ‘every promise and every set of promises, forming consideration for each other. When a proposal is accepted it becomes a promise. Thus an agreement is an accepted proposal. Therefore, in order to form an agreement there must be a proposal or an offer by one party and its acceptance by other party.The second part of the definition deals with enforceability by law. An agreement is enforceable u/s 10 if it is made by competent parties, out of their free consent and for lawful object and consideration. Thus, a Contract = Agreement + Enforceability. What is Contract ?
3. It refers to the processes and procedures that companies may implement in order to manage the negotiation, execution, performance, modification and termination of contracts with various parties including customers, vendors, distributors, contractors, employees etc.What is Contract Management ?
4. The answer to this question is that contracts need to be methodically managed in order to ensure that financial and operational risk is minimized and performance maximized. It can be one of the most lucrative areas for building business relationships and generating revenue. WHY Contract Management ?
5. First analyze and evaluate all existing contracting processes, and then categorize each by the following criteria:Level of Risk – High , Medium and LowValue to the Organization- In terms of transaction and volumeRoutine Agreements & Contracts vs. New/Infrequent Contracts Draft questionnaire, contract checklists and draft templates accordingly.How to manage ?
6. Up to execution of the Contract Begin with Contract Information and details: Thorough investigation of both the business and legal background for the contract and the proposed transaction and business relationship in which the contract is to be used.Drafting, review, discussion, revision and completion of all required items and activities.Negotiation of the essential terms of each contract and have a list of questions that will need to be answered in order for the contracts to be completed.Approval of parties concerned and their consent. Execution of the contract with proper stamp duty and jurisdiction.
7. Post execution of the ContractRevisions and amendments are a common part of the lifecycle of a contract. Track the clauses of the contract which is time specific, performance specific, service specific etc.Have periodic audit schedule and checklist, which will ensure obligations are met and value is realized.Alerts should be set for deadlines and renewals. Missed renewals mean lost opportunities and lost revenue.
8. Such standards should include maintaining accurate documentation from the start to end date of a contract.All negotiations documented during the contractKeeping complete contract addendums, noting any changes in the contractual arrangement.Revision, renewal documents and correspondence in this regard.Contract management standards and Documentation
9. Expected business benefits and value for moneyBoth parties understand its obligation No disputesNo surprisesOpen and constructive environment Professional discussion over changes and issues, if any.Relationship with trust and transparencyWHAT achieved by the contract Management ?
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