Commercial Contracting (L4M3)

• Understand the legal issues involved in forming commercial contracts.
• Analyse documentation used in commercial agreements for goods and services.
• Understand specifications and key performance indicators used in supplier contracts.
• Understand important clauses and terms included in formal commercial contracts.
• Recognise different contractual and pricing arrangements.
• Understand the role of payment terms, liabilities, guarantees and other contractual provisions.

1. Legal issues relating to the formation of contracts

• Commercial agreement documentation.
• Invitations to tender and requests for quotation.
• Specifications and key performance indicators.
• Contract documentation and pricing schedules.
• Health and safety records, supplier staff details and subcontractor arrangements.
• Non-disclosure and confidentiality agreements.
• Invitation to negotiate and invitation to treat.
• Offer and acceptance.
• Consideration and intention to create legal relations.
• Capacity to contract.
• Battle of the forms and precedence of contractual terms.
• Risks of contracting on supplier terms.
• Risks associated with oral contracts.
• Vienna Convention provisions for international sales of goods.
• Misrepresentation at pre-contract award stages.
• One-off purchases.
• Framework arrangements and agreements.
• Mini-competitions and call-offs.
• Services contracts.
• Hire and leasing of assets.

2. Specifications and key performance indicators

• Market dialogue with suppliers.
• Benefits and risks of supplier involvement in specification development.
• Drafting specifications as legally binding documents.
• Contractual performance measures.
• Key performance indicators (KPIs).
• Service Level Agreements (SLAs).
• Quality performance measures.
• Timeliness and delivery measures.
• Cost management.
• Resource efficiency.

3. Key clauses in formal contracts

• Express and implied contractual terms.
• Standard terms of business.
• Model form contracts.
• Indemnities and liabilities.
• Subcontracting provisions.
• Insurance and guarantees.
• Liquidated damages.
• Labour standards.
• Environmental, social and governance considerations.
• Pricing schedules.
• Fixed-pricing arrangements.
• Cost-plus and cost-reimbursable pricing.
• Indexation and price-adjustment formulas.
• Incentivised contracts.
• Payment terms.

5 days

Certification: CIPS Level 4 Diploma in Procurement and Supply – Commercial Contracting (L4M3)

Duration: 1.5 hours

Questions: 60 Objective Response questions

• Anyone planning a career in procurement and supply.
• Individuals in operational procurement and supply roles.
• Individuals managing or supervising procurement and supply functions.
• CIPS Level 4 Diploma learners.
• Professionals seeking to develop their procurement and supply career and work towards MCIPS Chartered Procurement and Supply Professional.

• A minimum of two A-levels or international equivalent, or a CIPS Level 3 Advanced Certificate qualification.
• Alternatively, a minimum of two years' relevant experience in a business environment.
• These are the entry requirements for the CIPS Level 4 Diploma qualification.