Preparing Risk Management Guidelines Assignment

Preparing Risk Management Guidelines - Assignment Example ated and economical application of resources to minimize, monitor and control the probability and /or impact of unfortunate events (Howells & Schulze, 2009, p. 89). There are various causes of business risks such as natural causes, financial risks, market risks, credit risks, accidents, legal liabilities, and projects failures among others. A business should have well defined strategies to manage and control various risks that may occur in business including the contractual and vicarious liabilities (Austen-Baker, 2011). The risk management guidelines will help the business management to establish resources for designing and delivering professional and effective risk management strategies during execution of business its operations. The parties in a contract must follow the right channel of communication in order to minimize liability. For example, if some conditions arise that makes discharge of the contractual duties impossible or delayed the party should communicate with the other party immediately and agree on the best course of action to take (Austen-Baker, 2011). The most common methods of managing risks in business includes averting of risks, transfer of risk to a third-party such as insurance, reducing the negative impact of risks and acceptance of some or all consequences of risks (Stone & Devenney, 2014). The parties to the contract should do all they can to avoid the occurrence of risk during the implementation of the contract. If one party failed to perform according to the contract and the other party had an opportunity to mitigate the loss suffered due to partial performance or lack of performance of the contract, both parties will be held responsible, and the offended will be liable for contribut ory negligence. The damages that the offender can pay in such a case are reduced by the amount of damage contributed by the offended person as stated in the case of Nettleship v Weston [1971] 2 QB 691 in which the trainee driver was held partly accountable