Contract management is about risk management. This presentation addresses six important topics in commercial contract management: regulatory compliance, performance obligations, representations and warranties, insurance tracking, counterparty risk, and contract portfolio. REGULATORY COMPLIANCE Contracts operate within a legal context of federal, state, and local law. Lawyers and contract managers responsible for managing contracts need to perform routine compliance reviews by contract. PERFORMANCE OBLIGATIONS The majority of contract provisions discuss behavior of both parties. Actions are required, permitted, or prohibited. Under certain conditions, the performance obligation can change. This metadata framework transforms text into data to improve contract management. REPRESENTATIONS AND WARRANTIES Parties often make promises about the condition of their business or the subject of the contract. Reps and warranties can be as mundane as the promise that the organization is organized in a specific jurisdiction. The promise might be essential to the detail, such as ownership of intellectual property and the license is free from any third party claims. INSURANCE TRACKING Contracts allocate risk between the parties. To address unknown contingencies, contracts often require a party to carry insurance and maybe even name the other party as an "additional insured." Insurance polices, however, usually expire during the term of the contract. If you do not track the expiration of the other party's insurance policy then you may not get the benefit of the policy when its needed. COUNTERPARTY RISK Contracts connect one organization to another. Organizations consist of people, and as such they change overtime for good and ill. Contract managers need to keep careful tabs on counterparties, independently of contracts. CONTRACT PORTFOLIO A single large customer or reliance on one supplier of a key product or process are well understood risks, but many organizations under appreciate contract portfolio risks. Portfolio risk is unique to each organization. Typical sources of contract portfolio risk include: - customers concentrated in a specific geographic location where economic conditions can affect the group; - customers concentrated in a particular sector where regulatory changes or economic event can cause reversals in a significant segment of the customer base; - contracts containing the same material provision ruled unenforceable by a court; - several purchasing or licensing contracts that contain pricing escalators not tied to organization performance; or - contracts that contain provisions that limit strategic alternatives like new capital structures, acquisitions or restrictions on an organization's activity. These challenges to your organization are clear only through the lens of contract portfolio analysis.

1. Contract
Management
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!
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Advanced issues

2. Contract
Management
How would you answer
these questions?
Berkman | Solutions
!
10260 SW Greenburg Road, 4th floor
Portland OR 97223
United States !
1 (855) 517-2193 North America
+1 (503) 517-4293 Worldwide
www.BerkmanSolutions.com
info@berkmansolutions.com

3. Regulatory
compliance

4. !
Do we know Q what
federal, state, and local
laws conflict with or
modify our contracts?
"

5. ! a
"
Yes, we have listed
important regulatory
requirements.

6. ! Moreover, a
we conduct
routine compliance
reviews of contracts
and store results with
the contract record.
"

7. Performance
obligations

8. !
Can we easily Q find the
detailed, specific
provisions of each
contract?
"

9. ! a
Yes, we have identified
each important
provision in our
contracts.
"

10. ! Moreover, a
we
categorize each action
as required, permitted,
or prohibited for us and
the counterparty.
"

11. Reps and
warranties

12. !
Do we know Q all the
promises we and our
partners have made
about our business?
"

13. ! a
"
Yes, we track each
representation and
warranty separately.

14. ! Moreover, a
we deliver
and monitor reps and
warranties routinely so
we can test for
compliance.
"

15. Insurance
tracking

16. !
Do we actually Q track
other parties’ insurance
coverage provided for
in our contracts?
"

17. ! Yes, their insurance
a
ends before contract
expiration, but we track
each certificate due
date.
"

18. ! Moreover, a
we receive
automated alerts about
insurance due dates
and provide coverage
reports.
"

19. Counterparty
risk

20. Q !
"
Do we we know how
many contracts we
have with each
company?

21. ! Yes, all contracts a
are
linked to the correct
counterparty record so
we can report by
counterparty.
"

22. ! Moreover, a
we perform
routine reviews of
strategic partners and
keep the results in one
place.
"

23. Contract
portfolio

24. !
Senior management
can’t review Q every
contract. Do we have a
one page view of our
entire contract
portfolio?
"

25. ! a
Yes, we provide a one
page contract portfolio
analysis.
"

26. ! a
"
Moreover, we can
provide that report
automatically.

27. Contract
Management
Advanced issues
Berkman | Solutions
!
10260 SW Greenburg Road, 4th floor
Portland OR 97223
United States !
1 (855) 517-2193 North America
+1 (503) 517-4293 Worldwide
www.BerkmanSolutions.com
info@berkmansolutions.com