Contract-Related Business Risk
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A Contract-Related Business Risk is a contract-related risk that is a business risk that arises from the creation, execution, or management of business organization contracts.
- Context:
- It can (typically) involve potential financial losses or legal liabilities stemming from contractual obligations.
- It can (often) be influenced by factors such as contract drafting, negotiation, interpretation, and enforcement.
- It can range from being an Internal Contract-Related Risk to being an External Contract-Related Risk.
- It can be mitigated through Contract Risk Management Practices such as thorough contract reviews, legal consultations, and contractual insurance.
- It can impact various aspects of business operations, including supply chain management, client relationships, and financial planning.
- ...
- Example(s):
- Internal Contract-Related Risks:
- Breach of Contract due to failure to meet obligations
- Unfavorable Contract Terms resulting from poor negotiation
- Contract Interpretation Errors leading to disputes
- Inadequate Contract Management causing missed deadlines or payments
- External Contract-Related Risks:
- Changes in Contract Law affecting existing agreements
- International Contract Enforcement challenges
- Force Majeure Events impacting contract performance
- Regulatory Changes necessitating contract modifications
- ...
- Internal Contract-Related Risks:
- Counter-Example(s):
- Market Risks not directly related to contracts
- Operational Risks unconnected to contractual obligations
- Reputational Risks arising from non-contract-related issues
- See: Contract Management, Legal Risk, Business Law, Risk Assessment, Contractual Liability