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Contract is another name for business relationship. Understandably, companies and government undertakings get into a large number of contractual relationships with numerous companies and suppliers. A company gets into a contractual relationship with the state to get a project, licence or business. Companies and government undertakings get into contractual relationships with raw material and component suppliers and service providers. Companies get into relationships with distributors, wholesalers, and retailers for selling their products and services.
Liberalization and globalization of the Indian economy has brought about significant changes in business relations. With liberalization, business entities have a choice regarding who to contract with and what to contract for. As the economy has become competitive, there has been much outsourcing of activities. A large segment of the economy has been opened up for private participation particularly in infrastructure development including highways, electricity, telecommunications, airports, and railways. These changes have led to a proliferation in contractual relationships. As a result, managing contracts for supply of goods and services has become a dominant activity for managers in both public and private sectors.
Contract failures lead to inefficient performance, financial losses, and disruption of work; initiation of arbitration and litigation; loss of reputation; and other direct and consequential losses. Thus, it has become important for executives to understand the rights, responsibilities, and obligations arising from contracts.
Most of the contracts are drafted with standard pre-given terms. Even when contracts are drafted afresh, clauses on different aspects of the contract are standard, taken from different sources. Standardization has become widespread as it hugely reduces transaction costs. In this context, for successfully negotiating and implementing contracts, managers need to be well versed with the significance of the terms in contract documents. Drafting the terms of a contract or designing and amending General Conditions of Contract (GCC) is a specialized function and must be done by law persons. Seemingly insignificant modifications in the terms of a contract can have severe implications. The programme is not intended to, nor is it possible, to make law specialists out of managers to undertake amending and drafting terms of a contract. The objective of the programme is to understand the significance of the existing terms of contracts.
The programme will cover the following themes:
- Formation of contract, including offer, acceptance, and consideration.
- Standard bid documents and award of tenders.
- Condition, warranty, merchantability and quality of goods.
- Transportation, delivery, and Incoterms.
- Letter of credit, bank guarantee, and performance guarantee.
- Impossibility of performance (force majeure clause).
- Breach, termination, damages and liquidated damages.
- Arbitration and dispute resolution.
- Significance and application of exemption clauses.
- Contracts and taxation.
Who should attend
The programme is intended for middle and senior level managers in private and public sector organizations implementing contracts in the fields of production, services, construction and fabrication, infrastructure development, materials, and sales and distribution. The programme is open for medium and large organizations.