Contractual Management (CM) aims at the steering of organizations, transactions and business cooperations through the use of contracts. As an inductive, management-oriented concept, the CM approach is based on the perspective of a decision-maker and thereby covers and aligns all contract-related processes and parameters that must be considered in order to achieve the objectives of the organization or institution.
The CM approach and its instrumentalization, the CM Model, were developed by Ralph Schuhmann and Bert Eichhorn. The approach and model merge the theoretical findings of new institutional economics, in particular asymmetric information, principle-agent and relational management theories, with the applied, management-oriented approaches of Proactive Law and Keskitalo’s concept of Contractual Risk Management which both emphasise the use of risk management for contract deployment. In contrast to contract management, the CM approach is not concerned with the management of the contract, but rather with the management of an organization or relationship through the use of the contract.
The CM Model
The CM Model represents a holistic system that comprises all elements relevant for the use of the contract as a steering instrument. It highlights the fact that the contractual management tasks – contract plan, draft, implement, monitor, and evaluate – are executed within an environment which is determined by management processes and decision parameters. Risk management and knowledge management comprise the core management processes that enable a goal-oriented deployment of the contract through their interactions with the processes of corporate management and management of the relationship. The particular company and business relationship as well as societal norms and value systems determine the specific decision parameters which will ensure compliance with company objectives.
Fields of application
The CM approach and the CM Model were originally developed for the governance of transactions and business cooperations in the private sector. Case studies show evidence that the approach and model are also applicable to public organizations if adapted to the specific working conditions of administrative bodies. Furthermore, the CM approach may be equally useful in the management of quasi-markets through contracts and thus are applicable on an institutional macro level. Even constellations encountered in political management can be addressed by the contractual management approach and model.
- ^Schuhmann, Ralph; Eichhorn, Bert (2015-01-01). “From Contract Management to Contractual Management”. European Review of Contract Law. 11 (1): 1–21. doi:10.1515/ercl-2015-0001. ISSN 1614-9939.
- ^Keskitalo, Petri (2006). “Contracts Risks Management”. Nordic Journal of Commercial Law. 2006: [i].
- ^Schuhmann, Ralph; Eichhorn, Bert (2017-07-10). “Reconsidering Contact Risk and Contractual Risk Management”. International Journal of Law and Management. 59 (4). doi:10.1108/IJLMA-02-2016-0023. ISSN 1754-243X.
- ^Eichhorn, Bert; Schuhmann, Ralph (2012). “Integration von Wirtschaft und Recht: Vertragswissensmanagement”. Akademie. 2012-2: 41–44.
- ^Schuhmann, Ralph; Eichhorn, Bert (2019). Contractual Management: Managing through Contracts. Wiesbaden: Springer Vieweg. ISBN 9783662584811. OCLC 1066107607.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.