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Risk Management Agreements

We understand risk as any event, circumstance or condition that may occur and lead to adverse results. Interfaces are known sources of risk, particularly in areas where different elements of a project or components of complex installations are manufactured in different locations. A notable example was the $300 million loss of NASA`s Mars Unmanned Climate Orbiter in late 1999, with a construction company`s engineering team using English measuring units for a navigation operation for space vehicles, while NASA used metric units. Implementation of Robust Contractual Risk Management Processes Unless the Organization has guidelines, processes and technologies to make all contracts visible, regardless of where the Organization creates them, it is not possible to develop a complete picture of the overall contractual risk. While it is important to minimize the potential risks of your contracts, it is also important that you do not miss out on great opportunities for fear of risk. As hockey legend Wayne Gretzky put it: «You`re 100% short of the shots you don`t take.» This article explains how you implement risk management in your contract management processes. A standard method of risk management in contracts is to assign any risk to the party best placed to manage it. To better manage contract risk, your staff must be able to identify it. In the January 2014 issue of Contract Management, John Miller provides two broad categories of contractual risk: This has implications for the detection of intrinsic risks in a contract if the type of knowledge required to draft the contract is not available for verification. One of the key roles of a contract is therefore to manage in one way or another different risks, to take into account the past and to anticipate future possibilities in order to prevent or minimize its future appearance and its effects. This is achieved by improving clients` understanding of the general components of contractual liability and risk management, analyzing individual contractual risk assessments for major new transactions, and analyzing contractual portfolios, as shown in the table below.

Our partner consulting solutions are provided by a combination of diagnostic controls and risk management and financing solutions, taking into account the risks incurred by the company and the company`s risk-taking. The following eight steps can help risk managers review and negotiate contracts: contracts in all their forms are integrated into virtually every part of the university activity and provide an important and comprehensive support mechanism to support Harvard`s mission.

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