Posts Tagged ‘contract management’

Why should you outsource contract administration?

December 16th, 2015 By Virtual Paralegal Services

For many small and midsize companies, managing contract administration efficiently can be a challenge. Growing businesses, preoccupied with building the business and supporting customers, do not necessarily develop contract management as a core competence.

Managing contracts is often a very disjointed process, managed by one or more parts of the business with no centralized organization, consistent use of terms, or cohesive process for efficiently reviewing, executing, and managing agreements. It many times becomes an added responsibility to an existing role such as the CFO, head of sales and marketing, or some other business manager.

In addition, there are multiple business partners that have differing priorities when it comes to contract administration. Sales personnel want quick contract turnaround times to shorten the sales cycle. Finance wants to eliminate revenue leakage and take advantage of pricing opportunities. Legal wants to mitigate risk and protect the business. Building and maintaining a contract administration process that manages the expectations and concerns of these business partners can be difficult.

By engaging an experienced contract administration partner, VPS clients have:

  • Improved turnaround times from months and weeks to days
  • Freed up existing resources to focus on their core responsibilities
  • Eliminated the costs and need to hire additional full time employees or additional resources
  • Mitigated risk through more consistent use of terms and conditions, especially non-negotiable terms
  • Increased visibility and accessibility by organizing all contracts across the business

 

Advantages of VPS over just hiring a contract administrator

Employing a team of senior contract administrators and contract paralegals, VPS becomes an extension of your organization that specializes in building and maintaining effective contract management processes. In addition, VPS leverages contract management best practices from a range of industries and companies to deliver the most efficient means for managing contracts. Contract management services from VPS are provided for a flat, predictable, monthly fee that costs far less than a full or even part-time employee.

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Arbitration

November 19th, 2014 By Virtual Paralegal Services

No one wants to think their relationship with another party will deteriorate; however, things do often fall apart, for a variety of reasons. Therefore, for those who are accustomed to entering into long-term contractual arrangements, having an arbitration clause in the contract is a good tactical move and will allow the parties to prepare for the worst.

What is Arbitration?

Arbitration is a faster, less expensive, and private process by which all parties agree, in writing, to submit their disputes to one or more impartial persons authorized to resolve the controversy by rendering a final and binding award.

Arbitration is guided by relatively informal procedures. Traditional courtroom rules of evidence are not strictly applicable. There is an informal discovery procedure. However, the arbitrators must make a final decision once all relevant information is present.

The Agreement

The written agreement is used to resolve any future dispute by the use of impartial arbitration. It is the key in a contract for resolution of future disputes; through the contract, the parties have come to an agreement to submit to arbitration any dispute, if and when it arises.

Another key benefit to having an arbitration agreement is it settles disputes over the locale of the proceedings. When the parties disagree, locale determinations are made by the American Arbitration Association (“AAA”) as the administrator, thereby precluding the need for intervention by a court.

The standard arbitration clause may also include reference to the American Arbitration Association’s optional rules for emergency measures of protection, before an arbitrator is sleeved, and for expedited arbitration. If the parties wish, standard clauses may also be used for negotiation and mediation. There are also standard clauses for use in larger, more complex cases. The AAA rules generally provide that any administrative fees be borne as incurred, and the arbitrators’ compensation be allocated equally between the parties. Fees and other costs can be dealt with in the arbitration clause.

Who are the Arbitrators?

The AAA maintains a screened and trained pool of available experts. Arbitrators are impartial and knowledgeable neutrals parties that are chosen to serve. Neutrality is a crucial part of being an arbitrator. Under the AAA rules, an arbitrator can be disqualified for showing any bias.

Usually, there are three arbitrators per dispute. Each party will choose one arbitrator, and the two will then select the third. They are selected for a specific case because of their knowledge of the subject matter; they are viewed as experts. Based on their experience, arbitrators will render an award grounded on thoughtful and informed analysis. The parties can request a reasoned award, and the arbitrators will provide conclusions based on law.

Confidentiality

Arbitration is a private dispute resolution method. Unlike court cases, whose judgments are public, the arbitral award is not released to the public.

Except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration without the prior written consent of both parties.

Arbitration is great method of resolving conflicts between parties. Contact us today to learn how to utilize arbitration as a conflict resolution tool to meet your needs.

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International Corporate Contracts

October 27th, 2014 By Virtual Paralegal Services

There are two bodies of law that govern international contracts: the Uniform Commercial Code (“UCC”) of America and the United Nations Convention on Contracts for the International Sale of Goods (“CISG”), which is an international body of law. It is important to know and understand a client’s business goals to better represent them regarding corporate contracts. And, as such, it is imperative to know which rule of law will govern their business.

UCC vs. CISG

The UCC is applicable when the transaction involves a sale of goods where U.S. law applies. It is applied automatically during sales of goods. In contrast, the CISG is applicable in commercial transactions of goods between the parties in signatory nations. These parties have the ability to modify the UCC in an international context. The most significant difference between the UCC and CISG is that the latter allows its parties to opt out of the convention. In order for the opt-out choice to be effective, both parties must opt out and both parties must clearly specify an alternate choice of law.

Both are only applicable during sale of goods. The CISG does not apply to service contracts; however, it does apply to a mixed contract of goods and services. Also, consumer goods are not regulated by the CISG, but are regulated by the UCC. The CISG will not cover certain items such as goods bought by auction, shares of stock, investment securities, sales of aircraft, and sales of electricity.

Similarities between UCC and CISG

Both UCC and CISG provide a Warranty of Merchantability (goods are fit for their ordinary purpose) and Warranty of Fitness for a Particular Purpose (goods are conformed to the purpose made known to the seller, where buyer reasonably relies on seller’s skill and judgment in choosing goods).

In the event of contract ambiguities, both the UCC and CISG allow for similar methods of interpretations. The court, or dispute resolution body, will look at either the course of dealing between the parties (previous contracts); course of performance (the parties interactions throughout the current contract); or the usage of trade terminology (how other parties in similar industries act).

Available Remedies under UCC and CISG

Although both codes use different words, they allow for similar remedies. In the event of a breach the non-breaching party has the right to purchase alternative or replacement goods. Consequential damages are available. The buyer has the right to receive the difference in the price paid minus the value of goods received from the seller. Finally, the seller has the right to force the buyer to pay, take delivery, or perform its obligations under the contract.

Damages and the Foreseeability Requirement

When a party alleges there was a breach to the contract, the CISG allows for recovery only in cases where the damages were foreseeable. However, under the CISG, the foreseeability requirement is much more relaxed than under the UCC, thereby allowing for greater recovery for the non-breaching party. The CISG only requires that the consequences of the breach be possible at the time of contract formation. In contrast, the UCC requires the breaching party to know or have reason to know of the potential consequences.

Do you have questions about contracts? Contact us today to find out how we may best serve your needs!

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