Unit of competency details

BSBPUR402B - Negotiate contracts (Release 1)


Usage recommendation:
Is superseded by and equivalent to BSBPUR402 - Negotiate contractsUpdated to meet Standards for Training Packages 24/Mar/2015

ReleaseRelease date
1 1 (this release) 10/Mar/2009

Training packages that include this unit

CodeSort Table listing Training packages that include this unit by the Code columnTitleSort Table listing Training packages that include this unit by the Title columnRelease
AUR12 - Automotive Industry Retail, Service and Repair Training PackageAutomotive Industry Retail, Service and Repair Training Package 1.0-2.1 
AUR05 - Automotive Industry Retail, Service and Repair Training PackageAutomotive Industry Retail, Service and Repair Training Package 3.0-4.0 
BSB07 - Business Services Training PackageBusiness Services Training Package 5.0-9.0 
CUA11 - Live Performance Training PackageLive Performance Training Package 1.0 
CUA - Creative Arts and Culture Training PackageCreative Arts and Culture Training Package 1.0 
CUS09 - MusicMusic 1.1-1.2 
SFI11 - Seafood Industry Training PackageSeafood Industry Training Package 1.0-2.2 
CUE03 - Entertainment Training PackageEntertainment Training Package 3.1-3.2 
LMT07 - Textiles, Clothing and Footwear Training PackageTextiles, Clothing and Footwear Training Package 3.1-4.1 
SIR07 - Retail Services Training PackageRetail Services Training Package 1.3-3.3 
CUF07 - Screen and Media Training PackageScreen and Media Training Package 1.2 

Qualifications that include this unit

CodeSort Table listing Qualifications that include this unit by the Code columnTitleSort Table listing Qualifications that include this unit by the Title columnRelease
AUR50105 - Diploma of Automotive ManagementDiploma of Automotive Management1-2 
AUR40105 - Certificate IV in Automotive ManagementCertificate IV in Automotive Management1-2 
SIR40212 - Certificate IV in Retail ManagementCertificate IV in Retail Management1-2 
LMT60507 - Advanced Diploma of Fashion and Textiles MerchandisingAdvanced Diploma of Fashion and Textiles Merchandising1-2 
LMT41207 - Certificate IV in Fashion and Textiles MerchandisingCertificate IV in Fashion and Textiles Merchandising1-2 
CUA40213 - Certificate IV in Community CultureCertificate IV in Community Culture
CUA50513 - Diploma of Live Production DesignDiploma of Live Production Design
CUF40407 - Certificate IV in Make-upCertificate IV in Make-up
CUE40403 - Certificate IV in Venues and Events (Customer Service)Certificate IV in Venues and Events (Customer Service)1-2 
CUA50211 - Diploma of Musical TheatreDiploma of Musical Theatre
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SchemeCodeClassification value
ASCED Module/Unit of Competency Field of Education Identifier 090901 Business And Commercial Law  

Classification history

SchemeCodeClassification valueStart dateEnd date
ASCED Module/Unit of Competency Field of Education Identifier 090901 Business And Commercial Law  25/Jul/2008 
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Modification History

Not applicable.

Unit Descriptor

Unit descriptor 

This unit specifies the outcomes required to negotiate terms of contracts with suppliers, and prepare and finalise contracts.

No licensing, legislative, regulatory or certification requirements apply to this unit at the time of endorsement.

Application of the Unit

Application of the unit 

This unit applies to individuals who negotiate and formalise complex purchasing arrangements involving significant risk and/or significant expenditure and detailed legal and documentation arrangements.

This unit applies to individuals who negotiate contracts as part of a broad purchasing role but are not specialist legal practitioners. They are typically guided by organisational contract negotiation guidelines and work under minimal supervision of a senior purchasing manager or in consultation with senior management.

Licensing/Regulatory Information

Not applicable.


Prerequisite units 

Employability Skills Information

Employability skills 

This unit contains employability skills.

Elements and Performance Criteria Pre-Content

Elements describe the essential outcomes of a unit of competency.

Performance criteria describe the performance needed to demonstrate achievement of the element. Where bold italicised text is used, further information is detailed in the required skills and knowledge section and the range statement. Assessment of performance is to be consistent with the evidence guide.

Elements and Performance Criteria



1. Negotiate terms of contracts with suppliers

1.1. Offer advice and undertake negotiations without prejudice

1.2. Advise suppliers of the organisation's intent to accept their offers

1.3. Negotiate issues  with suppliers

1.4. Determine desired outcomes, negotiation plans and schedules for negotiations

1.5. Undertake negotiations and reach agreements with suppliers in accordance with plans

1.6. Negotiate and document contract requirements to the satisfaction of the organisation and suppliers

2. Prepare contracts

2.1. Draft required contracts  using legal expertise if required

2.2. Distribute draft contracts to relevant personnel  and suppliers

2.3. Ensure any discrepancies or disagreements are clarified and resolved to the satisfaction of all parties

2.4. Ensure checks  of the legality and validity of draft contracts are made

2.5. Obtain approvals to sign contracts

3. Finalise contracts

3.1. Ensure contracts are signed and exchanged between the organisation and suppliers

3.2. Ensure contracts and related documents are stored and safeguarded

3.3. Advise relevant personnel of contract requirements

3.4. Advise unsuccessful suppliers of non-acceptance of offers

Required Skills and Knowledge


This section describes the skills and knowledge required for this unit.

Required skills 

  • culturally appropriate communication skills to relate to people from diverse backgrounds and people with diverse abilities
  • communication and negotiation skills to liaise with suppliers and reach agreement with suppliers on contracts
  • literacy skills to draft concepts and write reports containing complex concepts
  • technology application skills to use a range of software programs relevant to purchasing and contracting.

Required knowledge 

  • identification and overview knowledge of key provisions of relevant legislation from all levels of government that affects business operations, codes of practice and national standards, such as:
  • consumer protection legislation
  • contract law
  • import of goods and services, where relevant
  • sale of goods legislation
  • Trade Practices Act
  • organisational practices, policies and procedures for purchasing
  • product knowledge about the goods and services being supplied
  • purchasing and procurement principles for:
  • accountability
  • probity and transparency
  • risk management
  • value for money.

Evidence Guide


The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment 

Critical aspects for assessment and evidence required to demonstrate competency in this unit 

Evidence of the following is essential:

  • documented agreement of terms with suppliers
  • drafting and completion of a contract with a supplier for goods and services
  • informing of successful and unsuccessful suppliers.

Context of and specific resources for assessment 

Assessment must ensure:

  • access to an actual workplace or simulated environment
  • access to office equipment and resources
  • organisation's purchasing strategies and relevant purchasing records.

Method of assessment 

A range of assessment methods should be used to assess practical skills and knowledge. The following examples are appropriate for this unit:

  • analysis of responses to case studies and scenarios
  • assessment of draft and finalised contracts for the supply of goods and services
  • direct questioning combined with review of portfolios of evidence and third party workplace reports of on-the-job performance by the candidate
  • observation of contacting successful and unsuccessful suppliers about the awarding of the contract
  • oral or written questioning to assess knowledge
  • review testimony from team members, colleagues, supervisors or managers
  • review of authenticated documents from the workplace or training environment.

Guidance information for assessment 

Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example:

  • other purchasing units.

Range Statement


The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Issues  may include:

  • issues relating to non-compliance with invitation to offer requirements
  • issues relating to occupational health and safety (OHS) performance standards
  • issues relating to the form and specific requirements of contract documentation

Contracts  may include:

  • agreements for one-off or ongoing supply of goods or services
  • agreements with Australian or overseas individuals, contractors, corporations, individuals and government agencies
  • electronic or paper-based agreements
  • memoranda of understanding/agreement

Relevant personnel  may include:

  • CEO
  • managers
  • leaders
  • coordinators
  • OHS specialists
  • supervisors
  • other persons authorised to commit the organisation to purchases
  • internal users of purchased goods and services
  • owner
  • Board
  • specialist personnel involved in purchasing, asset maintenance and finance

Checks  may include:

  • referring the contract to others such as:
  • external legal representative for organisation
  • legal officer within organisation
  • purchasing manager

Unit Sector(s)

Unit sector 

Competency field

Competency field 

Administration - Purchasing and Contracting

Co-requisite units

Co-requisite units