Contract risk management clauses—checklist


Published by a UUÂãÁÄÖ±²¥ Commercial expert
Checklists

Contract risk management clauses—checklist


Published by a UUÂãÁÄÖ±²¥ Commercial expert

Checklists
imgtext

Introduction

It is important to ensure that when contracting in a business to business context, there is as much contractual protection for a party as its bargaining position will allow. This Checklist considers how certain key contractual clauses can manage risk in contracts and protect businesses (from the perspective of both supplier and customer) and how these clauses can be negotiated to gain maximum benefit from them.

Key provisionsGeneral comments
Payment
Payment securityCheck that the entity you are buying from or selling to is financially secure by obtaining a credit check.
Consider whether some form of payment guarantee is required, eg:
• A parent company guarantee or
• A letter of credit or performance bond from a bank
CustomerSupplier
• Is the supplier financially able to meet your supply requirements?• Will the customer be able to meet its payment obligations?
• Consider the need for credit insurance.
• Important to continue doing credit checks on the customer throughout the duration of the contract to manage overall exposure to financial risks.
Payment
Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Related legal acts:

Popular documents

Whose liability is it anyway? The impact of strike action on contracts

Commercial analysis: 2022 has seen a significant increase in industrial strike action across many industries causing major disruption to supply chains in the UK and beyond, in circumstances where businesses are already experiencing staff shortages. Logistics and transport businesses have, in

What are the legal issues for contracts impacted by war and sanctions following the Russian invasion of

What are the legal issues for contracts impacted by war and sanctions following the Russian invasion of Ukraine?IntroductionThe Russian invasion of Ukraine has seen traditional warfare and military conflict within the geographical parameters of a nation and the increased potential for cyber attacks

Where a subsidiary is sold, and a parent company guarantee is not released or novated to the new parent

Where a subsidiary is sold, and a parent company guarantee is not released or novated to the new parent company, is the ‘old’ parent company still liable for its former subsidiary’s performance under the guarantee?Guarantees are given by a guarantor (in this case, the parent company) in favour of a

Contract cover sheet

Contract cover sheet[insert commercial sensitivity status eg ‘confidential’, ‘privileged and confidential’, ‘restricted’ etc]For internal use only: not to send externallyThis document is a summary of the main terms of the contract for quick reference only. Do not use it as a basis for making