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Contractual Risk
Management
© 2004Associate Professor, doctor juris
Petri KeskitaloThe Faculty of Law, University of Tromsø
Version 03.02.2004
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StrategicC-RM
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OperativeC-RM
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Introductionto
Contractual Risk
Management(C-RM)
© 2004Associate Professor, doctor juris
Petri KeskitaloThe Faculty of Law, University of Tromsø
CONTRACTUAL
RISK
MANAGEMENT
IN
TRANSNATIONALSALES CONTRACTS
Version 03.02.2004
RISK MANAGEMENT:
”Risk management is a comprehensive view of the risk factors threatening the business operations and at the same
time a systematic course of action, which aims at minimising the likelihood of risk materialising and the economic losses
caused by the risk”
Eero Luotonen
CONTRACTUAL RISK MANAGEMENT
- A systematic method for use of proactive contracting i.e. contract design and contract governance for the purpose of
holistic management of risks to the firm
“CONTRACTUAL” RISK MANAGEMENT:
- Forms a part of the firm’s total risk managementbut adopts a view internal to the contracting activities
for the management of the risks to the firm
- Offers a common language for the various groups of professionals in charge of the firms contracting and risk management
- Alternative methods are for example:production-technical solutions
finance-technical solutionsinsurances
CONTRACTUAL RISK MANAGEMENT
- Can be tailored for the purposes of the firmsstrategic and operative risk management:
- Strategic contractual risk management will enable the firm to systematically develope and manage it’s contracting activities
- Will enable the firms contracting activities also to fullfill the demands set by the ISO 9001-standard
- Is based on an integration of thelegal, economics and risk management
perspectives to the management of the risks to the firm with help of contrating activities
- Operative contractual risk management will enable the firm to systematically manage it’s single business transactions
CONTRACTUAL RISK MANAGEMENT
“CONTRACTUAL” RISK MANAGEMENT:
1) Risk identification
2) Risk evaluation
3) Risk mitigation- risk bearing- risk elimination- risk reduction- risk transfer
4) Risk management monitoring and control
RISK MANAGEMENT PROCESS:
CONTRACTUAL RISK MANAGEMENT
Development of strategies and procedures
Monitoring and control of contractual risk management
Contractual risk mitigation
Risk evaluation
Risk identification
Identification of strategies1)
2)
6)
4)
5)
3)
RISK MANAGEMENT:THEORY OF CONTRACTUAL
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Power Point-show available at:
www.jus.uit.no/ansatte/keskitalo/CRM-TSC.pps
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