Managing Contract Risk - Importance of A Contract Management Process
Contracts are at the heart of virtually all business transactions. However, because contractual relationships vary drastically within and between companies and sectors, not all contracts can be treated in the same manner. Managing contract risk is an important part of the contract management process. Doing so can ultimately help a company’s bottom line. And failing to do so can result in dire consequences, both financial and otherwise. There are a wide range of potential contract risks, including complicated pricing that can lead to overpayment for goods and services and diminished revenue, obscure language resulting in miscommunication and/or misaligned goals, and inadequate or non-existent clauses pertaining to the treatment of intellectual property (IP) or confidential information, the compromise of which may cause inadvertent but major damage to a company’s finances or reputation.
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