PRE MST

Civil & Environmental Engineering Department, VJTI, Mumbai

Scheme

• Course Title: Contracts, Claims, and Dispute Management
• Code: Not specified
• L-T-P (Hours/Week): 2-0-0 = 2 hours
• Credit Hours: 2
• TA: 20
• MST: 20
• ESE: 60
• ESE hours: 3

Course Outcome

After completing this course, students will be able to:

• Demonstrate the ability to manage contract lifecycles, from initiation to closure, by effectively drafting, negotiating, and administering various contract types.
• Develop the skills to identify, document, and analyze different types of claims and insurance issues, using critical thinking to prepare effective claim resolutions.
• Apply various dispute avoidance and resolution techniques, including alternative dispute resolution methods and litigation strategies, to manage conflicts effectively.
• Assess the legal frameworks, regulations, and ethical considerations that impact contract and claims management.

Course Contents

1. Contract Management
2. Contract Formation and Negotiation
3. Contract Administration
4. Claims and Insurance Management
5. Construction Dispute Resolution
6. Dispute Avoidance and Resolution
7. FIDIC Contracts and Claims
8. Legal and Ethical Considerations

References

• Civil Engineering Contracts and Estimates by BS Patil (Fourth Edition)
• Construction Project Management THEORY AND PRACTICE by Kumar Heera Jha
• CONTRACTS, AGREEMENTS AND PUBLIC POLICY IN INDIA Edited by SAIRAM BHAT (NLSIU Book Series-1)

What is a Contract

• A contract is defined as: "An agreement made between two or more parties which is enforceable by law to provide something in return for something else from a second party".
• The two parties are expected to perform the various obligations they have undertaken, as expressed in a mutually agreed set of contract documents.

Contract Strategy

A proper contract strategy for a project involves four key decisions:

• Setting the project objectives and constraints.
• Selecting a proper project delivery method.
• Selecting a proper contract form / type.
• Contract administration practices.

Contract Need

• Contracts provide a description of responsibilities and liabilities.
• Contracts bind parties to their duties.
• Contracts can establish a time frame for duties.
• Contracts can secure payment.
• Contracts can provide resources.

Contract Documents

The contract is defined by the contract documents, which are developed from the tender documents.

• Agreement Form
• General Conditions
• Special Conditions
• Additional (unspecified)

Contracting Process

• Identify Project
• Prepare Scope
• Select Contract
• Prepare Tender Documents
• Invite Tenders
• Tender Meetings
• Tender Evaluation
• Place Contract

Types of Contracts

• Cost-based:
  • Cost Plus
  • Target Cost Contract
• Price-based:
  • Unit Price
  • Lump Sum

Construction Industry Parties

The key parties involved in most construction projects and considers what each of their roles are and how they are linked to one another, i.e., the contracts that are entered into between them.

• Employer
• Contractor
• Professional Team (Engineer)
• Sub-Contractors
• Employer's Agent/Project Manager
• Funder/Sponsor

Relationships between Parties

The relationship between all the parties differs according to the contract type, form, and conditions.

• Employer contracts with the Engineer and the Contractor.
• The Engineer and Contractor interact based on the contract.

Why Contract Management Matters

• Risk Mitigation: Ensures compliance with legal and regulatory requirements, reducing the risk of disputes and financial losses.
• Improved Efficiency: Streamlines processes, enhances collaboration, and optimizes contract performance for better outcomes.
• Enhanced Profitability: Maximizes value from contracts, improves contract performance, and strengthens relationships with stakeholders.

Key Components of Contract Management

• Contract Drafting: Creating clear, concise, and legally sound contracts that protect the interests of all parties involved.
• Contract Negotiation: Achieving mutually beneficial terms and conditions through effective communication and strategic negotiation.
• Contract Execution: Ensuring timely and efficient execution of contracts with proper approvals and documentation.
• Contract Monitoring: Tracking contract performance, identifying potential issues, and proactively addressing any deviations from agreed-upon terms.

Effective Contract Negotiation Strategies

1. Preparation: Thoroughly research and understand the contract, your negotiation goals, and potential counterparties.
2. Active Listening: Pay close attention to the other party's needs and interests, demonstrating empathy and understanding.
3. Strategic Communication: Clearly articulate your position, using persuasive language and focusing on mutually beneficial outcomes.
4. Creative Problem Solving: Find innovative solutions to address concerns and achieve a win-win agreement for all involved.

Contract Lifecycle Management

1. Initiation: Identifying the need for a contract, defining scope, and establishing goals.
2. Drafting: Creating a draft contract that reflects the agreed-upon terms and conditions.
3. Negotiation: Communicating with parties to reach mutually acceptable terms.
4. Execution: Formalizing the agreement, obtaining necessary approvals, and signing the contract.
5. Performance: Monitoring and managing the contract's implementation, ensuring compliance with its terms.
6. Termination: Completing the contract's obligations, resolving any outstanding issues, and closing the contract.

Managing Contract Risks and Compliance

• Risk Assessment: Identify potential risks associated with each contract, analyze their impact, and develop mitigation strategies.
• Legal Compliance: Ensure contracts adhere to all relevant laws and regulations, minimizing legal exposure and potential liabilities.
• Data Security: Protect sensitive information, ensure data privacy, and comply with data protection regulations.
• Audits and Reviews: Regularly review and audit contracts for compliance, identifying potential issues, and implementing corrective actions.

Evolution of Contract Law Through Time

Ancient Contract Law

• The ancient period of contract law in India began around 1500 BCE and continued through the medieval period.
• Early contracts were based on custom and tradition.
• Ancient legal codes, like the Code of Hammurabi, established rules for commercial transactions.
• Contracts often involved oral agreements and relied on witnesses.
• Writing was rare and reserved for important transactions, such as land sales.

Code of Hammurabi

• One of the earliest known sets of written laws.
• Hammurabi codified the rules and penalties for every aspect of Babylonian life.
• Close to 300 laws.
• Laws attributed to the gods.
• Wealthy were given more protection than the poor.
• Based on retribution (an eye for an eye).

Ancient Contract Law - Dharmashastra

• The ancient Indian legal system, embodied by the Dharmashastra, recognized different types of contracts.
• These contracts were governed by principles of fairness, good faith, and mutual consent.

Vyavaharmayukha

• The Vyavaharmayukha portion of the law contained the rules that governed contracts.

Kingdoms and Dynasties

• The Mauryas, Cholas, Guptas, and Delhi Sultanate contributed to the legal development of contract law during the medieval period.

Contract Law in the Middle Ages

1. Rise of Formalism: Medieval law emphasized formality and specific language in written agreements.
2. Influence of Canon Law: Canon law influenced contract law, introducing notions of good faith and fairness.
3. Growth of Trade: The expansion of trade led to the development of standardized contracts for commercial transactions.

Legal Formalism: Law as Science

• All law is established, and it is the role of the courts to discover the appropriate rule and to apply it.
• Scientific application of legal precedence to new cases gives certainty and predictability to law.
• Formalism can be said to be a positivist explanation of how law and legal systems operate.

Contract Law in the Renaissance

• Revival of Roman Law: The Renaissance saw a revival of Roman law, which provided a framework for contract principles.
• Rise of Commercial Law: New forms of contracts emerged, such as insurance policies and bills of exchange.
• Emphasis on Individualism: The Renaissance fostered a greater emphasis on individual rights and freedom of contract.

Contract Law in the Age of Enlightenment

• Rationalism and Natural Law: The Enlightenment emphasized reason and natural law, influencing principles of contract fairness and equality.
• Freedom of Contract: Enlightenment thinkers advocated for freedom of contract, enabling individuals to enter agreements without undue restrictions.
• Balance of Power: Contract law sought to balance the interests of parties, ensuring fairness and preventing exploitation.

Contract Law in the Industrial Revolution

1. Industrialization led to complex commercial transactions, requiring clearer legal frameworks.
2. The rise of corporations and standardized contracts facilitated large-scale production and trade.
3. Legal doctrines, like the doctrine of consideration, emerged to address the specific needs of industrial society.

British Period and Contract Law in India

• The advent of the British East India Company in the 18th century marked a significant shift in India's legal system.
• The Company's judicial system, heavily influenced by English common law, gradually expanded, setting the stage for a more formalized legal framework.

Rise of British Administration

• The British Crown assumed direct control of India in the mid-19th century.
• The introduction of English law, including contract law, became a cornerstone of the colonial administration.

Key Principles of English Contract Law

1. Offer and Acceptance: A valid contract requires a clear offer from one party and unambiguous acceptance from the other, forming the foundation of the agreement.
2. Consideration: Both parties must exchange something of value, be it goods, services, or money, for the contract to be legally binding, ensuring each side is receiving something in return.
3. Capacity: The parties entering into a contract must have the legal capacity to do so, meaning they must be of sound mind and legal age, ensuring the agreement is not formed under duress.
4. Legality: The purpose and subject matter of the contract must be legal, meaning the agreement does not violate any laws or public policy, preventing contracts for illegal activities.

Evolution of the Indian Legal System

• 1860s: The Indian Contract Act, 1872, was enacted, codifying principles of contract law derived from English common law, laying the foundation for modern Indian contract law.
• 1947: India gained independence, inheriting a legal system heavily shaped by British influence. The Indian Contract Act remained a key legal instrument, undergoing amendments and interpretations to reflect post-independence needs.

The Indian Contract Act, 1872

• This landmark legislation established a comprehensive framework for contract law in India, significantly shaping the legal landscape for commercial transactions.

Adoption and Adaptation of Contract Law in India

• Codification: The Indian Contract Act, 1872, codified many key principles of English contract law, tailoring them to the Indian context. This provided a consistent legal framework for commercial transactions.
• Contextualization: While largely drawing upon English law, the Indian Contract Act also incorporated elements of traditional Hindu and Islamic law, reflecting India's diverse legal heritage.
• Flexibility: The Act allows for judicial interpretation, giving judges the flexibility to adapt contract law principles to specific circumstances, recognizing the need for context-sensitive application of the law.

The Advent of The Indian Contract Act, 1872

• The Indian Contract Act as applied today's was drafted originally by the third Indian Law Commission in the year 1861 in England.
• The Indian Contract Bill tried to defined laws relating to Contracts, Sale of movable properties, Indemnity, Guarantee, Agency, Partnership and bailment.

Amendments to The Indian Contract Act

• The act came into effect in 1872 but soon afterwards amendments were made
• Section 76 to 123 dealing with the sales of goods act were repealed and separate legislations were enacted called Sales of Goods Act 1930
• Section 239 to 266 dealing with partnership was repealed and new legislation was enacted called Indian Partnership Act 1932.

Conclusion

• It can be concluded that through different time periods the contract law has been amended and interpreted in different ways in different communities, but general principles remain unchanged and no attempt has been made to change it.

Introduction to Contract Management

Contents

• Definition
• Importance of contract management
• Types of contracts
• Contract lifecycle: initiation, execution, and closure

Contract Management Definition

• Contract management refers to the business processes that manages the creation, implementation, and evaluation of contracts to maximize business performance and minimize risk.

Benefits of contract management

As per Figure 1:

• Aids Business Functioning
• Improves Functional Efficiency
• Improves Spend Visibility and Minimizes Maverick Spending
• Increases Visibility of Suppliers
• Enforces and Improves Compliance

Best practices for contract management

• Centralized repository
• Ensuring team collaboration
• Enabling compliance throughout contract lifecycle
• Standardize contract management processes

Stages of contract management

1. Contract Preparation (drafting)
2. Author the contract (Pay attention to each word written)
3. Negotiate the contract (with other parties/stakeholder)
4. Get approval (setting up an approval workflow)
5. Execute the contract (Signing the contract)
6. Keep up with Amendments and Revisions (Keep track of periodic amendments and revision)
7. Post-signature management (performing regular audit)

Stage 1: Drafting

• Identity your needs
• Establish goals
• Define risks

Stage 2: Author the contract

• Pay attention to each word
• Consider state/country of the two parties
• Consult with a lawyer
• Draft it as per template

Stage 3: Negotiate the contract

• Anticipating and researching other party’s needs
• Creates strong foundation for lasting relationship among stakeholders
• Use platforms that can manage contracts online

Stage 4: Get approval

• Audit approvals /manager approvals
• Company's procurement policies

Stage 5: Execute contract

• Signing and making contract official
• Electronic signatures to save time

Stage 6: Amendments

• Revisions
• Reduce confusion

Stage 7: Managing contracts

• Regular audits
• Alerts on deadlines

Contract Management Process – Key Points and Activities

• Managing Service Delivery: To ensure that the products are delivered as and when they are ordered.
• Managing the Relationship: This is the communications between the vendor and the purchaser.
• Managing the Contract: This is the ongoing contract administration to ensure that the day-to-day procurement activities follow the spirit and sections of the contract.
• Seeking Improvements: Improvements within a procurement environment mean greater efficiencies and an increase in profits.
• Ongoing Assessment: The entire procurement activities are assessed on a continual basis to ensure that the contracts are adhered to and the purchasing processes followed.
• Managing Change: In a long term procurement relationship, there are sometimes changes in activities, requirements or products available. All of these changes need to be noted and handled effectively.

Contract Lifecycle Management Process

• Template Creation
• Contract Creation
• Contract Drafting
• Contract Review
• Contract Approval
• Contract Execution
• Contract Performance
• Contract Expiration

Contract drafting Important clauses

• Preparation of LOI / LOA
• Drafting of clauses of contract
• Scope
• Price, Statutory levies, PV
• Time schedule
• Force Majeure
• Liquidated Damages
• Termination & risk Purchase

What should be in a contract?

• Who: the parties
• What: the rights and duties of the parties
• When: the terms of delivery etc
• Where: the place of performance
• Why: any relevant background
• How: method of performance
• How much: the amount and terms of payment
• What if: termination rights and remedies, LD

Main sections of a contract

• Preamble - Latin: 'Prae' - before; ‘Ambulare'- to go, to walk; it means - to precede; Preamble- preface of a book.
• Recitals - Latin: Recitare - to read out,
• Subject matter of contract/Scope
• Definitions
• Key commercial & legal clauses.
• Signatures {preamble (starting)- signature(ending) is sometimes called the Frame of contract}

Segments of a contract

• Preamble/ Recitals/Defined terms
• Operative clauses
• Standard terms & conditions/BP clauses
• Signatures & Annexures

The effective date of contract

• The contract can start with the date of the agreement
• If there is to be any linkage to any activity, take care to stipulate it clearly
• On completion of the activity, incorporate the effective date (if necessary by mutual consent)

The parties to the contract

• Names of the parties should be correctly set out
• With individuals, full names are advisable
• With limited companies, the names should exactly match their tender
• Defining the parties at the outset is useful

The parties to the contract - example

• This agreement for sale and purchase of Gas is executed and dated…
  • BETWEEN (…), a company
  • AND(…), a company

Preamble and Recitals

• The 'PREAMBLE' of a contract is the introductory paragraph that identifies the parties to the agreement.
• It is typically followed by paragraphs known as 'RECITALS', which are sometimes labelled as 'Whereas clauses.

Preliminary clauses (Recitals)

• Preliminary clauses, sometimes headed 'whereas' are helpful in explaining (reciting) relevant background to the contract.
• They can also help clarify the intention of the parties
• They are traditionally called 'recitals.

Defined terms

• Defined terms are valuable to clarify the meaning of the words or phrases used several times in a contract and to avoid repetition.
• If the words or phrases are supposedly industry phrases or acronyms, make sure they are clear and agreed, as such things often mean different things to different people

Key words and phrases

• Title: Title means legal ownership of the goods.
• Risk in goods: Risk in the goods means liability for loss or damages to them.
• When does risk pass to the buyer? Risk and title pass on delivery unless the contract states otherwise.

Key words and phrases

• Condition: A condition is something that has to be done or fulfilled. Breach or failure to fulfill a condition may be seen as material breach and may justify termination.
• Representation: A representation is a statement of fact or capability (what a person or product can actually do). A false representation can trigger damages claim.

Key words and phrases

• Warranty: It is a statement of fact, often used in conjunction with representation. Breach of warranty can give rise to damages for the actual loss caused, but normally won't justify termination
• Indemnity: This is an obligation to pay money to make good a third-party claim (hold harmless). Some indemnities are drafted widely, pushing major elements of risk on to the Supplier

Key words and phrases

• Assignment: An assignment is a transfer of non-physical property (contract or license). Most contracts can be assigned without the other party's consent unless a) the contract prohibits this or b) the personal identity of the parties is critical to the deal
• Sub-contracting: Sub-contracting is delegation of all or part of your role whilst retaining full responsibility. A sub-licence is a form of sub-contract of intellectual property or similar rights, such as copyright or software rights.

Key words and phrases

• Jointly and severally: When contracting with two or more parties- companies or individuals- make their obligations joint and several. This means that each of them is liable for all their joint obligations (breaches)
• Without prejudice: If you negotiate a settlement, make sure your discussions are without prejudice. This phrase should prevent any offer being used against you if the case is taken to court.

Key words and phrases

• Risk purchase claim (loss): It's the difference between the initial contract price and what the purchaser had to pay against the fresh contract.
• Mitigation of loss: This demands that the contract victims must take all reasonable steps to reduce their loss. Otherwise, their R/P claim will not be valid in the eyes of law

Boilerplate clauses

• "Boiler plate" clauses are standard clauses. They are ready-made, all-purpose clauses inserted into most commercial contracts under the headings standard, Miscellaneous or General
• Sometimes they appear in tiny print at the end of a contract. We, consumers, routinely ignore small print when buy software, join a website or sign credit card agreements

Timing issues and time of the essence

• Suppliers are sometimes reluctant to commit to delivery dates
• If they offer a firm schedule, state in the contract that ‘Time is the essence of contract'.
• This will mean that if the due date is missed, the buyer can then cancel the contract and claim damages

Contract drafting: Delivery schedule

• Specify when and at what rate the goods are required to be delivered or services to be performed
• Specify the date of commencement and completion:
  • Example: Delivery of 300 Nos of computers shall commence on Oct 1, 2022, and the same shall be completed as follows:
    • (i) 100 Nos of computers by 31.10.2022
    • (ii) 100 Nos of computers by 30.11.2022
    • (iii) 100 Nos of computers by 31.12.2022. Time is the essence of contract.

What is 'Force Majeure'

• 'Force Majeure' is a situation in which either of the parties is prevented, temporarily or permanently from performing its obligations under the contract due to circumstances beyond its control.
• The FM events can be classified into:
  • (i) Acts of God/ Nature- Earth quake, Tsunami
  • (ii) Acts of Sovereign Governments- Banning export
  • (iii) Acts individuals/ Groups- Acts of terrorism

Drafting of FM Clause-1

• "Force Majeure means any event including acts of God or other events beyond the reasonable control of and not attributable to the affected party."
• Wide in scope; There is a catch-all phrase like 'beyond reasonable control'; Possible to argue that pandemic, Govt actions etc. are included

What are Liquidated Damages (L/D)

• Liquidated Damages: Alleviate sufferings. Monetary compensation
• Where a party suffers due to breach of contract it has a right to claim damages thereof. S-73

Liquidated Damages clause in a contract

• The clause, usually, states that in the event of delay in performance under the contract, liquidated damages shall become leviable at the rate of ½ % per week or part thereof of delay subject to a ceiling of 10% contract value.
• In some cases, the rate specified is 2% per month or part thereof of delay with a ceiling of 10 %
• In some cases, no ceiling is fixed

Termination of Contract

• During the implementation of a contract, there are normally the following three events which may lead to termination of contract:
  • Prolonged Force Majeure situation
  • Prolonged default
  • Cancellation of Export Licence by the Govt of the supplier's country

Termination of Contract (continued)

• In these cases, the final remedy provided to the Purchaser is a right to terminate the contract.
• This clause gives the purchaser, through a written notice sent to the supplier, a right to terminate the contract in whole or in part.

Contract Dispute resolution

• Strategy for dealing with disputes
• Prevention of disputes
• Settlement of disputes

What is a dispute?

• A dispute means an assertion of a right (claim) by one party and repudiation thereof by another
• A claim and counter-claim (w/o repudiation) does not constitute a dispute

Prevention of Dispute

• Fair allocation of contract risks
• Unambiguous drafting of key clauses
• Timely action by the parties
• Team approach
• A standing DRB (prevents growth of a dispute)

Main contract clauses

• Operative clauses
• Financial terms
• Risk management clauses
• Innovation and technology-related clauses
• Boilerplate clauses
• Termination clauses
• Dispute resolution clauses

The 'laws' of Contract

• Applicable Laws and jurisdiction: State the laws that will govern the contract. Specify the court that will have the jurisdiction
• Incorporate a dispute resolution mechanism: mutual discussion, conciliation, arbitration, litigation. Seek written consent for conciliation and arbitration

Warranty

• Warranty: A period after delivery during which the seller has express or implied liability to the buyer for defects in the goods.
• The seller gives assurance regarding proper design, materials, Manufacturing and Workmanship and promises to rectify/ replace the equipment free of cost if the equipment does not function properly.
• The period of warranty, usually, ranges between 1 to 5 years

Warranty vs Guarantee

Indemnity v Guarantee

• Indemnity and guarantee are a type of contingent contracts.
• Indemnity implies protection against loss in terms of money to be paid for the loss. Indemnity is when one party promises to compensate the loss occurred to the other party, due to the act of the promisor or any other party.
• On the other hand, Guarantee is when a person assures the other party that he will perform the promise of the third party, in case he defaults.

Quasi Contract (S 68-72)

• It is an obligation which the law creates in the absence of an agreement
• Quasi Contracts are based on principle of equity, justice, and good conscience. There should be no unjust enrichment, no one shall enrich himself at the expense of other

What is a Contingent Contract?

• Section 31 of ICA, 1872- "A contingent contract is a contract to do or not to do something, if some event collateral to such contract does or does not happen."
  • 'A' contracts to pay 'B' Rs 100000 if B's house is burnt. This is a contingent contract
• A contingent contract is an if-then agreement.
• It is called contingent because the terms are based on certain events occurring.

Are Wagering agreement valid?

• Literally, the word 'wager' means 'a bet', something stated to be won or lost on the result of a doubtful issue and therefore a wagering agreements are ordinarily betting agreements.
• Sec 30 of ICA reads as "agreements by way of wager are void."

Review of Contract before signature

• In line with the laid-down guidelines, the draft contract should be reviewed clause by clause by a team consisting of officers of purchase wing, technical wing, finance wing, and legal wing.

Negotiation techniques and strategies

• Conflict is inevitable.
• The process of reaching a mutual agreement by the two or more parties is called Negotiation.
• It is one of the most commonly used and beneficial skills that a manager can develop.

The Process of Negotiation: Common elements in negotiation

• The parties involved are in some way interdependent.
• The parties are in conflicts over goals and processes.
• The parties involved are motivated and capable of influencing one another.
• The parties believe they can reach an agreement.

Effective Communication Strategies

1. Active Listening: Pay close attention to the other party's concerns and perspectives.
2. Clear and Concise Language: Use simple, straightforward language to avoid misunderstandings.
3. Empathy and Understanding: Seek to understand the other party's needs and try to find solutions that benefit both sides.

Steps of negotiation process

1. Investigation and preparation
2. Preparation
3. Bargaining
4. Agreement

Types of Bargaining Strategies

Introduction to Negotiation Styles

• Positional Bargaining: Focuses on claiming a larger share of a fixed pie. Each side starts with a position and attempts to persuade the other to concede. Can be adversarial and lead to deadlocks.
• Integrative Bargaining: Seeks to expand the pie by identifying mutual interests and creating value for all parties. Collaborative and focuses on finding mutually beneficial solutions.

Characteristics of Positional Bargaining

• Competitive: Each party aims to win at the other's expense.
• Fixed Pie Mentality: The belief that there is a limited amount to be gained, so concessions must come at the other's expense.
• Focus on Positions: Emphasis on initial demands and negotiating from those positions.

Drawbacks of Positional Bargaining

• Limited Solutions: Focus on positions can lead to an impasse, leaving little room for creative solutions.
• Damaged Relationships: Adversarial nature can damage relationships and lead to mistrust.
• Suboptimal Outcomes: Focus on winning can result in outcomes that are not in the best interest of either party.

Key Principles of Integrative Bargaining

• Collaboration: Parties work together to find mutually beneficial outcomes.
• Creativity: Focus on generating creative solutions to expand the pie.
• Open Communication: Clear and open communication fosters understanding and trust.
• Focus on Interests: Understanding underlying needs and motivations drives solutions.

Identifying Shared Interests

1. Identify each party's interests, both tangible and intangible.
2. Look for common ground and areas where interests align.
3. Frame solutions that address shared interests, creating win-win scenarios.

Staking Out the Bargaining Zone

(Refer to the image in the transcript for a visual representation of the bargaining zone with Party A's and Party B's aspiration ranges, target points, and resistance points)

Individual Differences in Negotiation Effectiveness

1. Personality Traits
2. Moods/emotions
3. Culture
4. Gender differences

Situational Factor of Negotiation

• Location
• Physical settings
• Timelines
• Audience characteristics

Ethics and Negotiation

• Selective Disclosure: Negotiators highlight positive information and downplay or fail to mention negative information.
• Misrepresentation: Most of the time negotiators misstate facts and information or their position. For example, they misrepresent the lowest price they are willing to accept.
• Deception and Lying: Negotiators give the other party factually incorrect information or information that leads to incorrect assumptions or conclusions.
• False threat and false promises: negotiators provide misinformation about actions that they may take and concessions they may be willing to make.
• Inflict direct or indirect harm: Negotiators intentionally sabotage the other party's chance of success.

Third-Party Negotiations

1. Mediator
2. Arbitrator
3. Conciliator

Comparison of Mediator, Arbitrator, and Conciliator

Common Mistakes in Negotiation

• Failing to Negotiate/Accepting the First Offer
• Letting Your Ego Get in the Way
• Having Unrealistic Expectations
• Getting Overly Emotional
• Letting Past Negative Outcomes Affect the Present Ones

Contract Administration

Contract Administration Definition

• Contract management is the process of managing contract creation, execution, and analysis to maximize operational and financial performance at an organization, all while reducing financial risk.

Contract Management Vs Contract Administration

Objectives of Contract Administration

The main objectives are:

• The successful delivery of the procurement in a timely and economic manner.
• To ensure performance by all parties in accordance with the requirement of the contract.

Duties of contract administrator

• Manage the obligations and duties of the procurement entity specified in the contract; Ensures that the supplier or contractor performs the contract