> ... > Qualifications Advanced diploma in procurement supply Managing contractual risk

Managing Contractual Risk (L5M3)

Module Purpose

On completion of this module, learners will be able to evaluate the legal and process issues relating to the formation of contracts and the legal implications of contractual non-conformance. They will also assess the impacts of breach of contract and examine potential remedies and provisions that are available under such circumstances.

Module aim(s)

As organisations outsource activity it is vital that they ensure the associated contracts deliver expected services and/or products. Those tasked with managing the procurement and supply function must identify, monitor, and manage contractual risk. This module is designed to help learners examine the nature of contract risk, and the legal implications relating to contract formation and non-conformance. Learners will also consider the impact and management of breach of contract.

Next steps

Starting a CIPS qualification programme means you will join the largest institute in the world for those working in procurement and supply. You can join as a student member online today. Once joined you can book your examinations online

Key Module Details

Icon showing the letter C, with CORE MODULE written below the green-bordered circle.

Icon showing the letters OR, with OBJECTIVE RESPONSE EXAM written below the green-bordered circle.

Icon showing the number 1.5 and the word HOURS, with EXAM DURATION HOURS written below the green-bordered circle.

Icon showing the number 60 and the word HOURS, with MODULE LEARNING TIME written below the green-bordered circle.

Icon showing the number 6 and the word CREDITS inside a green-bordered circle.

Icon showing the number 46 and the word QUESTIONS, with IN THIS EXAM written below the green-bordered circle.

DOWNLOAD FULL SYLLABUS

Learning outcomes, assessment criteria and indicative content

1.1 Analyse the issues relating to the formation of contracts and the associated risks

1.1.1Contract risks associated with offers
1.1.2Risks associated with counter offers
1.1.3Contract risks associated with acceptance
1.1.4Contract risks associated with precedence of documents
1.1.5Contract risks associated with contract amendments, variation, and changes

1.2 Analyse the various elements of contractual process on overall risk

1.2.1Indemnities and liabilities
1.2.2Contractual risk of insurance
1.2.3Guarantees
1.2.4Liquidated damages guarantees
1.2.5Payment
1.2.6Delivery and completion
1.2.7Force majeure
1.2.8Sub-contracting

2.1 Analyse types and impact of contract breach

2.1.1Minor breach
2.1.2Material breach
2.1.3Fundamental breach
2.1.4Anticipatory breach
2.1.5Repudiation

2.2 Compare and contrast the methods to manage breach of contract

2.2.1Formal versus informal action
2.2.2Negotiation
2.2.3Litigation and implications
2.2.4Alternative dispute resolution: mediation, arbitration, conciliation, ombudsperson

2.3 Explain options to mitigate the consequences of a breach of contract

2.3.1Sub-contracting and novation
2.3.2Use of liquidated damage provisions
2.3.3Managing reputational damage
2.3.4Making claims and management of the process

3.1 Contrast remedies that apply to the nonperformance of contracts in procurement and supply

3.1.1Contract non-performance, remedies, service credits, and the relationship with contract breach
3.1.2Contractual provisions as remedies for contract non-performance
3.1.3Default clauses as remedies for contract nonperformance
3.1.4Assessment of consequential loss as a remedy for contract non-performance
3.1.5Liquidated damages, unliquidated damages, and penalty provisions as remedies for contract nonperformance
3.1.6Serving notice as a remedy for contract nonperformance

3.2 Analyse the legal consequences of terminating a supplier relationship for non-performance in procurement and supply

3.2.1Contract termination and amicable dissolution
3.2.2Drafting and issuing termination notices
3.2.3Assessment of damages
3.2.4Contractual warranties and conditions
3.2.5Specific performance
3.2.6Termination clauses

View other modules

Four core modules make up 42 of the required credits for this qualification, choose three elective modules to make up the 18 remaining credits