Risk Management: Contracting Out The Risk
As we heard last week on the Vantage Performance Podcast Series many suppliers in the Mining sector work on a handshake deal, without the support of a contract. It’s a situation that’s changing as the industry faces slower growth and a less certain future. That means suppliers need to protect themselves by ensuring they have a watertight contract in place.
Michael Rochester, a partner at legal firm McCullough Robertson and guest podcaster, specialises in contracting for mining services and infrastructure projects. In this podcast he explains the importance of understanding the risks associated with a project and ensuring those circumstances are spelt out in the contract. He also talks about how to mitigate risk against non payment and the need to be aware of termination for convenience – the right for a customer to cancel a deal if their circumstances change. You need to ensure that the criteria around such a termination reflects the impact it could have on your investment in the project.