medium · Project Management Professional Hybrid Approaches
A project manager at Grayling Software is using AI to draft a contract for a new vendor. The AI includes a liquidated damages clause that is 40,000 per week for delays. The vendor requests this be reduced to $10,000.
What should the PM do first?
- Escalate to the Legal Department to let them decide the final liquidated damages figure.
- Accept the 10,000 figure to ensure the vendor signs the contract and the project starts on time, while documenting the decision in the issue log.
- Determine the actual financial impact to the organization for each week of delay to establish a defensible negotiation baseline.
- Tell the vendor the clause is 'AI-generated' and cannot be changed by the project team.
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