3. Contractual Risk Management © 2004 Associate Professor, doctor juris Petri Keskitalo The Faculty of Law, University of Tromsø Version 03.02.2004

4. Go to Strategic C-RM Go to Operative C-RM Go to Introduction to Contractual Risk Management (C-RM)

5. © 2004 Associate Professor, doctor juris Petri Keskitalo The Faculty of Law, University of Tromsø C ONTRACTUAL R ISK M ANAGEMENT IN TRANSNATIONAL SALES CONTRACTS Version 03.02.2004

6. 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

7. - 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 management but 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 solutions insurances CONTRACTUAL RISK MANAGEMENT

8. - Can be tailored for the purposes of the firms strategic 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 the legal, 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:

9. 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

10. Development of strategies and procedures Monitoring and control of contractual risk management Contractual risk mitigation Risk evaluation Risk identification Identification of strategies 1) 2) 6) 4) 5) 3) RISK MANAGEMENT:THEORY OF CONTRACTUAL Go to Strategic C-RM Go to Operative C-RM EXIT Restart

11. Development of strategies and procedures Monitoring and control of contractual risk management Contractual risk mitigation Risk evaluation Risk identification Identification of strategies 1) 2) 6) 4) 5) 3) RISK MANAGEMENT:THEORY OF CONTRACTUAL Go to Strategic C-RM Go to Operative C-RM EXIT Restart

12. Power Point-show available at: www.jus.uit.no/ansatte/keskitalo/CRM-TSC.pps Comments to: petri.keskitalo@jus.uit.no