What is contract management and why is it needed?

Contracts are legally binding agreements that can cover a wide range of transactions, from simple purchase agreements to complex business partnerships. Contract management is the process of creating, negotiating, implementing, and overseeing contracts between different parties to ensure that all parties involved in the agreement fulfill their obligations and that the contract is executed effectively. Effective contract management is crucial for businesses and organizations to mitigate risks, ensure compliance, and optimize their operations.

Contract management is particularly important for organizations that deal with a large number of contracts, as it helps ensure that they maximize the value of their agreements while minimizing potential risks and disputes. Effective contract management can lead to improved relationships with business partners, reduced legal risks, better financial outcomes, and enhanced overall operational efficiency.

Contract management process:

1. Contract creation: This involves integrating the request of the client to formalize a working arrangement for the supply of goods or services. It could translate into renewal, amendment or termination of the contract in question.
2. Negotiation: During the negotiation stage, commercial and legal terms are incorporated into the contract. This involves several rounds of discussion with the client to assess their needs and arrive at a mutually desirable position between the client and the counterparty of the contract.
3. Execution: Each party must sign the final agreement, the formalities prior to execution must be completed if any, and the contract becomes effective between the parties, post execution.
4. Contract administration: Each party must comply with its rights and obligations during the tenure of the contract. A systematic process of evaluating the performance and management of disputes or problems of quality must be in place.
5. Contract end or renewal: When a contract is due for expiry, several actions may be taken, the contract may be renewed under the same terms and conditions, re-negotiated or terminated. Parties need to be notified in all these cases.

How MBG can help

In the UAE, contract management services are particularly important for businesses operating in sectors such as construction, hospitality, real estate, and finance, where contracts play a critical role in defining business relationships and ensuring the successful completion of projects. By outsourcing contract management services, businesses can ensure that they have the necessary expertise and resources to manage their contracts effectively while focusing on their core activities

We have a team of qualified lawyers from different jurisdictions who can understand the needs of clients in different sectors and are experienced in providing highly quality and effective advice. Our services encompass all aspects in the contract management lifecycle:

• Drafting of various commercial agreements such as joint venture agreements, business transfer agreements, MOA/AOA, shareholder agreement, power of attorney, EPC contracts, distribution agreements, leasing and warehousing agreements, etc.
• Preparing and negotiating bid documents, project finance documents, investment contracts such as SAFE and/or SAFT.
• Preparation of Management Information Services (MIS) for existing contracts.

In case you require any assistance, please contact [email protected]

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