Contract management plays crucial role in any project success. Failure in proper contract management can lead to many risks in projects.
Contractual risks relate to scope, assumptions, resource commitments, schedule commitment, penalties, incentives and many more. Essentially each clause in the contract can pose a risk to the organization if the clause is not clearly worded.
Some things that a Project Manager can do to avoid Contractual Risks are:
- Define policy for risk management while drafting contracts. This policy should also cover all the learning’s from the past projects.
- Create contract review check list to ensure common pitfalls are checked for.
- Ensure all contracts are reviewed and approved by Legal, Finance teams in your organization.
Drop a mail to receive the contract review check list at email@example.com