Commercial Contracting (L4M3)

1.1 Analyse the documentation that can comprise a commercial agreement for the supply of goods or services

• 1.1.1Invitation to tender or request for quotation
• 1.1.2Specifications
• 1.1.3Key performance indicators (KPIs)
• 1.1.4Contract documentation
• 1.1.5Pricing and other schedules (such as for health and safety records, details of supplier’s staff, use of sub-contractors, non-disclosure/confidentiality agreements)

1.2 Analyse the legal issues that relate to the creation of commercial agreements with customers or suppliers

• 1.2.1Invitation to negotiate, also known as invitation to treat in English law
• 1.2.2Principles relating to offer and acceptance, consideration, intention to create legal relations and capacity to contract
• 1.2.3Principles relating to the battle of the forms and precedence of contract terms
• 1.2.4Risks presented by contracting on supplier’s terms
• 1.2.5Risks presented by contracting oral contracts
• 1.2.6The Vienna Convention provisions for the International Sale of Goods and the impact on the formation of a contract
• 1.2.7Misrepresentations made at pre-contract award stages

1.3 Compare types of contractual agreements made between customers and suppliers

• 1.3.1One-off purchases
• 1.3.2Framework arrangements and agreements
• 1.3.3The use of mini-competitions
• 1.3.4Call offs
• 1.3.5Services contracts
• 1.3.6Contracts for the hire and leasing of assets

2.1 Analyse the content of specifications for procurement activities

• 2.1.1Benefits and risks of market dialogue with suppliers
• 2.1.2Drafting of specifications to form a binding legal document

2.2 Appraise examples of key performance indicators (KPIs) in contractual agreements

• 2.2.1Defining contractual performance measures or key performance indicators (KPIs)
• 2.2.2The use of service level agreements (SLAs)
• 2.2.3Typical KPI measures to assess quality performance, timeliness, cost management, resource efficiency and delivery

3.1 Analyse sources and purpose of contractual terms for contracts that are created with external organisations

• 3.1.1Express and implied terms: understand the role or use of different types of contract terms
• 3.1.2The use of standard terms of business by both purchasers and suppliers
• 3.1.3The use of model form contracts

3.2 Recognise examples of contractual terms typically incorporated into contracts that are created with external organisations

• 3.2.1Key terms in contracts for indemnities and liabilities, sub-contracting, insurances, guarantees and liquidated damages
• 3.2.2Terms that apply to labour standards and environmental, social and governance issues

3.3 Recognise types of pricing arrangements in commercial agreements

• 3.3.1The use of pricing schedules
• 3.3.2The use of fixed-pricing arrangements
• 3.3.3Cost-plus and cost-reimbursable pricing arrangements
• 3.3.4The use of indexation and price adjustment formulae
• 3.3.5The use of incentivised contracts
• 3.3.6Payment terms