Managing Contracts Essay Example | Topics and Well Written Essays - 3000 words

Managing Contracts - Essay Example Contract management is not an exact science (Gray and Larson, 412) and there is no perfect contract management system (412). An effective contract management system acts as an interface between the buyer’s and the supplier’s organization. Individuals or teams applying the contract management system should have requisite technical, contractual, and business knowledge to understand both sides of the arrangement. A contract is a legally binding instrument typically carried out with customers, vendors, partners or employees. It includes negotiating terms and conditions and ensuring their compliance. A contract results when each party, the contractor and the customer, promises the other a valuable benefit. The customer must have all the funds ready for the execution of a project and cannot expect any benefits until the completion of the project. Contract or agreement is the document that enables the initiation and conduct of a project (Hill, 611). Contract is the confirmation of the customer’s request for the project and represents the contractor’s intent to achieve project deliverables and objectives (Hill, 611). Contract is more than a formal agreement between two parties and is a codification of the private law, which governs the relationship between the customer and the service provider (Gray and Larson, 413). Contract can be made with or within an organization. This usually means while one party promises to deliver certain goods, property or services by a specified date and the other party promises to accept the goods, property, or services and pay for them. Failure of one party to keep its promise may result in action by the other for breach of contract (Lock). Since contract management requires time and effort, adequate resources must be allocated to it. The conditions of the contract need to be clearly