CONTRACTS MANAGEMENT Vs LEGAL MANAGEMENT
Legal management is a practice followed from ancient times and it’s almost successful as the average result may cross more than 75%. Contracts management is usually followed by legal experts and entrepreneurs to the major extent. A report from IACCM reveals that 9.2% of Revenue every year across the World is lost because of poor contract management.
There is a thin line between legal and contracts management. Generally, we approach to the Advocates once the situation is out of our control and we expect legal experts can bridge the gaps. Yes, this can happen for the majority of the cases, but, this cannot happen for some cases, which fall under minority. These issues under minority can create losses and sometimes may take off the complete profits of the company.
JUSTACONTRACT Team are attempting to intricate those significant aspects on the differences between legal and contracts management. Let’s examine the differences, advantages, disadvantages and the care and caution that are required.
– Generally, only major agreements will be referred to Legal Team.
– We execute major agreements in consultation with Legal Experts.
– We try to understand the importance of some of the clauses.
– We also negotiate important clauses.
– We try to settle the issues ourselves as practically as possible and refer to the legal experts once the issue is beyond our control.
– Legal experts guidance, generally avoid several issues or disputes.
– Understanding the important clauses of our contract terms and conditions helps to execute our contracts efficiently and smoothly.
– Negotiation on important clauses favourable to both parties fairly is a very good move and avoids disputes or claims.
– Settling the issues without legal guidance is a good initiative and this will sometimes have adverse effects.
– Minor issues in the agreements may also create major challenges, losses etc.
– All agreements besides of major or minor have some related problems.
– All clauses in the contract need attention as they may create issues in the future.
– Oral Settlement may sometimes create unnecessary disputes. A document combined with oral discussion always gives good results.
– Executing the terms and conditions in an agreement ensuring that those terms and conditions are linked with the activities that are to be executed as per that agreement.
– Providing the solutions to the challenges/issues/legal requirements/failures/breaches that may occur in executing such agreement.
– While executing the agreement at the ground level, the work is to be executed as per the contract terms and conditions of the agreement.
– If there are any misses in the plans while executing, the reasons are to be substantiated with relevant support documents and communicate the same to another party in emails/letters and also the parties should have open discussions and keep best efforts to resolve such issues amicably.
– If the breaches by either party are increasing, the other party to send the correspondence as per the contract clauses as agreed in the contract and accordingly submit claims or invoke dispute and try to settle amicably.
– Irrespective of contract values or issues, the contract execution can be smooth and maintains the good relationship with the parties.
– There can be a significant increase in reduction of losses in all types of contract.
– Appropriate clauses and correspondence always help to a recovery of losses through the legal due course.
– Appropriate contract and correspondence always help for amicable settlement.
– Contracts Management may consume some time and costs.
– Without contracts management also contracts execution may go well up to 70% of total contracts execution and the balance 30% may put the company in losses and also exhaust the profits that were made in the 70% of other projects.
HOW CAN WE TAKE ADVANTAGES ON APPROPRIATE CONTRACTS MANAGEMENT?
– Parties should spend time in understanding all the terms and conditions of their contracts.
– Terms and conditions of the contracts are always to be prepared in conjunction with real issues that may arise while executing that particular project or contract.
– Solutions for such issues always to be captured in the terms and conditions of the contract. If such issues arise while executing the project, the terms and conditions will come to rescue.
– Relevant execution, sales Team, and all other functions should understand the terms and conditions and have the summary sheet of their contracts to enable them to implement the agreed terms and conditions more efficiently.
– Action points by the parties on the contracts have to be clearly listed.
– Breaches of the Contract by either party could lead to unexpected losses and hence be very expensive misses.
– Implementation of appropriate contracts management in the project execution or in executing any agreement will help in building necessary documentation and this will help in minimizing the losses and maximize the profits.
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