Contract management is a process to manage the contracts developed with many of the people such as employees, customers, vendors and/or partners and so on (Apttus.com, 2018). It does not only include preparation of a contract but this process ensures that all the terms and conditions of a contract are in place and properly complied with (Goodrich, 2013). Management of the amendments that arise in the terms of a contract while it is execution is also a part of contract management. While discussing the contract management, the discussion of Contract Manager is necessary. As the name implies a contract manager is a person who is responsible for contract administration/management (Sports-management-degrees.com, 2018). The term of contract manager can further be understood while looking after his/her role, responsibility, and duties. The presented report is focused on the role of Contract Manager. In addition to the role of a contract manager, another related aspect such as the settlement of contracts, potential disputes, liabilities of parties and business planning will also be discussed. The role of contract manager is necessary to study in order to understand the fact that how valuable he/she is. It will develop an understanding of the reader that how important a contract manager is and what function he/she carries.
Contract managers play a vital role in an organization as they oversee and direct all the contract through the lifecycle of a contract (Linsley, 2018). Regardless of the nature of the organization, the functions of a contract manager usually remain the same. They serve their duties as a liaison between the organization, customers, vendors, individual contractors, and employees and provide services like record keeping, recommendations, monitoring, negotiation, change management and many more (Sparrow 2012: 120). The role of a contract manager becomes more critical when it comes to engineering and constructions. The reason behind the same is that in the field of construction, there are more chances of disputes and in order to define the obligations and rights of the parties and to settle the cases, a contract manager and his/her effective manager need to be there. Similarly, in automotive sectors, a contract manager needs to be there. The reason behind the same is that this industry is facing many challenges due to fluctuating market conditions (Ultria.com, 2018). Further, in this industry, there is a trend of joint ventures and partnerships between the companies and in such a scenario the role of contract manager becomes more crucial and necessary. In addition to this, an effective contract management can develop a long-term business relationship, and the same can bring profitable results to the business (Uher and Davenport 2009). Moving towards the role of a contract manager, the same is defined as hereunder:
This is to be stated that the role of a contract manager starts with the preparation of a contract. A contract manager is a person who is responsible for the management of all kinds of contract (Naughter, 2017). In order to perform their duties, such contractors define the purpose of the contract in addition to the expectations of the parties from a contract. They evaluate the whole scenario and then after make negotiations (Paulsen, 2018a). They provide such recommendations, which make all the parties satisfied at the end of a contract. Communication and monitoring are important for the success of a business and contract manager ensure the presence of the same. In the automotive sectors, such managers are responsible to draft the contract and set the terms after negotiation while dealing with the other partner companies, employees, suppliers of machines and other materials and customers.
This is another role of a contract manager where the same keeps all the records of every contract that has been developed by him/her and/or about management of those, such manager is responsible. A good contract manager understands the need to keep these contracts safe along with other contractual documents (Paulsen, 2018b). In case of any disputes or confusions, these are the documents, which resolve the matter. Record management provides evidence, which are easily accessible and can help in audit trails. In addition to the same, this role is also important as the same help other departments in cases of necessity. In the past times, contract managers were used to keep these documents in physical mode but by the passing of time, globalization of businesses and development of technology, it does not seem practical to carry these records in physical mode anymore, therefore these managers are using technology for the same these days (Yee and Oh 2012). It provides many advantages to them as well as to organizations. From the point of view of the automotive industry, at this stage, a contract manager plays an important role as the same keeps every contractual document secure and supports the situations of disputes.
In order to prevent the issue of breach of contracts, such managers develop some plans and policies, which ensure that employees are working for the vision of the organization (Ungm.org, 2018). They create and develop such policies, which enable them to manage the entire lifecycle of a contract. These policies are more often related to the management of the contracts and there is nothing to do at the end of the other employees of the organization. An organization related to the automotive sector is often a large one with many departments and hence the contract managers are required to place the policies in order to effectively manage the contracts.
In a contract management, many of the aspects and terms are there which ones need to understand while reviewing the role of the contract manager. In addition to this, among these terms, many are of nature, which gets influenced by the local laws and customs. These are legal aspects of contract management. As mentioned above, that regardless of the nature of industry and size of the organization, the procedure of a contract management remain the same but some aspects are there which the laws influence and therefore contract managers need to consider them. On the other side, some aspects are universal in nature, which does not get influenced by any local laws, and contract managers of every jurisdiction consider them in an equivalent manner. The reason behind the same is that every nation has a different legislation on the subject of the contract. Basic concepts of the contracts are similar, yet local laws define and decide other aspects.
Every contract manager needs to know the common law provisions (Young, 2012). Any contract starts with an offer. Once a person makes the offer, the other is required to accept the same. It is a universal aspect. However, local laws of every nation are different and hence affect the manner in which an offeror addresses an offer to the offeree. In addition to the offer, acceptance is also an aspect, which is universal in nature. An acceptance to an offer gives birth to a contract and from there only the role of a contract manager comes into light. Until unless there is no acceptance to an offer, there will be no contract, and there will be nothing to do by a contract manager. Therefore, this would not be wrongful to state that the existence of an offer and acceptance is a universal aspect related to contract management, however manner of them are influenced by local laws. Further, settlements of contracts are completely influenced by local laws. A contract law of the nation defines the manner in which a contract needs to be settled. Contract Manager is responsible for the effective settlement of the contracts as he/she is the person who negotiates the term and takes responsibility to manage a contract. Automotive industries have to comply with local laws of the nation and the way in which a contract is required to be settled decides by these laws. Contract managers cannot use any universal approach in the same. Apart from the offer, acceptance, and settlement of the contracts, letter of intent is also there. A letter of intent (LOI) can be understood as a document, which defines the intention of the writer (Rocketlawyer.com, 2018). This is a summary of key points of a contract, which explained that what is going to be held in a contract. This is also known as a memorandum of understanding (Business Dictionary, 2018). A contract manager is required to develop an LOI very carefully as it further decides the intention of the parties along with the enforcement of the contract. In the automotive industry, many of the times there are a circumstances where the actual date of the transaction is not a current date and contract actually need to perform later. In these situations, a letter of intent plays an important role. Here, the contract manager needs to understand that whether an LOI was only a prescription of intention of the parties or the same was a legally binding agreement. An LOI is a universal aspect where in general there is nothing to do by local laws.
Areas of potential dispute remain similar in the same kinds of contracts. For instance, in the automotive sector of each country, situation is expected to be the same. They develop similar kinds of contract. Apart from the automotive industry, in every organization, there are some particular areas where happening of disputes are potential. Contract Manager is required to identify those areas and to cover them in a contract (Commitmentmatters.com, 2008). As contract manager is a person responsible for development and management of the contract, it is necessary on his/her part to deal with these issues wisely. The ultimate purpose of a contract is to avoid future disputes and therefore a contract manager is required to make certain provisions with respect to areas of potential disputes. In addition to the potential dispute, liabilities of the parties also need to define while developing a contact. This is a very important aspect that needs to be considered while developing a contract. This is a step where parties get to know that what liabilities they owe in respect to each other. This is also a universal aspect of contract management. Despite the size and industry of an organization and nature of a contract, this is a universal aspect and act in the process of a contract management. In the automotive sector, there can be many contracts such as Joint ventures, employment contract, and contract with vendors of parts, customer, and many others. In each kind of contract, liabilities of the parties are a common thing to include. However, this is also necessary to mention that while defining these liabilities, contract managers need to check the local laws. It means consideration and defining of liabilities of parties is a universal task to do in a contract management but the local laws can influence the same. For instance:- In a contract of selling of a car, provisions related to Sale of goods or transfer of title laws of the nation can define the liabilities of the parties. In such a situation, parties cannot overrule the provisions of law by their mutual dealing. In the field of liabilities of parties to a contract, some aspects such as privity of contract and liquidated damages are there which is universal in operation. These are known as a legal aspect of contract management. Privity of a contract is a term, which states that only parties to a contract are legally bound with each other and not the third person. In every contract management, this aspect is applicable. On the other side, liquidated damages mean a sum of money, which a party needs to give to another one as compensation at the incident of breach of contract. Without the influence of local law, these aspects exist in every contract management universally.
In the Automotive sector, contract manager needs to consider some of the factors while performing their duties. Health and safety issues are one out of them. For instance, in the contracts related to employment, it is necessary to insert the provisions of health and safety. This is universal in nature. It is common that an employer is liable to provide a safe and healthy environment for the employees. It is applicable to all types of contracts. In the process of contract management, every manager is required to review the issues related to health and safety of employees (in cases of employment contracts). Provisions can be further defined according to the requirements of local laws, but consideration of the issue is universal in nature. In addition to the same, the title of the property is also a required term to consider. It becomes responsibilities of a contract manager to include the provisions related to the title of the property in the contract and to negotiate accordingly. In the automotive sector, it becomes more important. Contract managers are the responsible person to decide the event or point of time of transfer of title of a vehicle after reviewing the complete transaction. Further, in the contracts of constructions also, this aspect is universally to include. Tort is a civil wrong (Mullis and Oliphant 2011: 1). In the contract management, the aspects related to tort law are necessary to mention. There is always a chance that either party can do a civil wrong with the other one. The aspect relates to tort law is often defined under exception rules of a contract where contract managers include the provisions related to this law. In some of the nation, Tort Law is a common law whereas in other there is legislation on this topic. Local laws make an influence on the provisions of a contract related to Tort law but the inclusion of these terms are universal. Irrespective of the local laws, a person who owes a duty of care in respect to other is liable to pay damages to the victim and this aspect is universally accepted. The reason behind the universal nature of these aspects is that the same secure right of a victim party. The inclusion of Tort law provisions becomes more necessary in the contracts related to constructions. In the absence of these provisions, there will be no benefit of contract management. The areas and aspects discussing hereby are those, which all the contract managers consider universally.
Scheduling and project planning are two important tasks of contract managers. These are necessary as the same helps in timely and suitable payment and project budgeting. There are many benefits of scheduling and project planning and the same can be considered a universal aspect. In the construction contracts mainly, contract manager focus on these terms. However, this is necessary to mention that these some local laws govern these terms and therefore contract managers need to consider the same. In an overall view, these are universal aspects but somewhere get influences from local laws. Regardless of the countries, contract managers are used to focus on scheduling and project planning as a necessary tool for overall management. In order to review the role of contract manager in relation to scheduling, this would not be wrong to mention that the person is responsible to plan a schedule according to the other terms and conditions of a contract. A contract manager is aware of all the other contracts of an organization and known the expected inflows and outflows of the funds (Cips.org, 2018). In this manner, he/she is able to develop a suitable scheduling. Further, different forms of contracts are there according to the nature of the project. Here, the contract manager understands the nature of the project and develops the planning accordingly. In the contracts, one can find that how effectively a contract manager planed the scheduling and managed the whole contract co-coordinating with other aspects of the particular project.
Conclusion
In conclusion, this is to be stated that a contract manager is a very important person in an organization. From the beginning of a contract till the performance, these managers play different roles. In the engineering, construction, and automotive sector, this role becomes more crucial as at every stage there is a requirement of proper co-ordination between the parties. These sectors include a significant value. In the aforesaid discussion, the focus has been made on the various general tasks that a contract manager do. In conjunction with the same, some aspects related to contract management, which is universal in nature, has also been discussed along with the specific role of contract manager. Schedule and project planning are some of the tasks by which a contract manager can improve their performance. Local laws play their important role in the development of a contract as disputes are often subject to local jurisdiction. Legislations are there to govern various issues yet some common aspects are there which is universal in operation and do not get influenced by local laws or customs. Being on a very significant position it becomes the responsibility of a contract manager to act wisely considering all the related aspects. Any mistakes in a contract
Following are some of the recommendations for the contract managers in order to make their working results more efficiently:-
By considering all the above-mentioned recommendations, a contract management can bring more effective result than the current ones.
References
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