Contract Management Case Study

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A contract is an agreement between two parties under which one party promises to do something for the other in return for compensation (Morris, & Pinto, 2007). In essence, it is an obligation on both parties to fulfil their part of the agreement and operate within the framework of law. The parties involved are the purchaser and the supplier or the sponsor and the vendor. The contract is an essential document that outlines the agreement made by both parties. The contract should contain specific language detailing the requirements of both parties. The contract defines what was agreed upon by each party, a definition of what happens when things change, a definition of obligations, a definition of the relationship between the parties and the level …show more content…

According to author of the book, Supplier Relationship Management, the litigation process is typically expensive and consumes vast amounts of time to prepare for, and may still fail to secure the required outcome. Since Project managers are not legal experts or lawyers, there must be a plan in place to handle contracts. This plan is termed contract management. Contract management is a process that an organization may use to manage the negotiation, execution, performance, modification and termination of contracts with various parties including customers, vendors, distributors, contractors and employees (Glutterman, 2013). Good contract management ensures that the process from beginning to end is conducted in a logical manner and sets the groundwork to prevent disputes and provides a means to resolve issues that …show more content…

According to the PMBOK (2013), close procurement is the process of completing each procurement. This is to ensure that all documentation and information are gathered carefully from one stage to the next to close out the contract. In short, it also allows for Project Managers to confirm the steps outlined in the Procurement Management Plan. For instance, documents are archived, stakeholders’ are notified and legal requirements are addressed. This is also to ensure that the involved parties understand their roles, because the buyer and the seller has certain rights and responsibilities during closure. For example, the buyer may have the right to terminate the whole contract or a portion of the contract, at any time, for cause or convenience (PMBOK, 2013). Responsibilities include the seller notifying the buyer with formal notice that the contract is completed and that the buyer resolves all deliverables outlined in the

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