As part of any organisation there will be key contracts in place which are crucial to the ongoing success of the organisation. These contracts may be with a key supplier, investor, customer or partner. Whichever the contract type each contract represents a key relationship for the organisation which will have its own unique risk profile.

However, organisations still do not enter contractural agreements having been fully equipped with this risk profile enabling them to effectively understand the risks to the success of the relationship and subsequently structure the contract accordingly prior to agreement to ensure the risks are effectively apportioned and addressed.

Failure to carry this process has resulted in a number of unprotected liabilities which end up costing millions of pounds in unbudgeted capital every year for UK organisations.

Critical questions you need to consider:

• Prior to contract structure to what extent do you have a clear line of sight on what the risks are to the success of the relationship you are entering?
• To what extent is the contract shaped and the Terms and Conditions amended to reflect the risk profile of the relationship?
• How are risks formally apportioned within the contract?
• Where risks are referenced within the contract how do you manage these to ensure your own contract performance?