Contract creation & Management
This memo is to inform and to help guide managers on how to handle different contract situations.
TO: MID-LEVEL MANAGEMENT
FROM: UPPER MANAGEMENT
SUBJECT: LEGAL RISKS AND OPPORTUNITIES
CC: WHOM IT MAY CONCERN
The Contract creation and management simulation was based upon a scenario between the company Span and the bank Citizen Schwarz AG. Span is a software company in California and C-S is a large German based bank. Eight months into the contract Span’s deliverables had been behind schedule in the last couple months and on top of that the product has been unacceptable with major bugs in the user testing stage. From these allegations the lead negotiator for C-S asserts that the company can not afford schedule slips due to deadlines and then asks for immediate transfer of all unfinished code and asserted the rescission of the contract by Citizen Schwarz.
The legal troubles for both companies occur when Span begins having issues with keeping the delivery schedule and not being able to create acceptable products. In the act of not keeping to the agreed time frame for delivery and not creating bug free software when presented the Span firm is in breach of the contract by not substantially performing the duties they promised to complete efficiently and effectively, however with C-S review time being affected by change it is project management and user and system requirements have changed since originally determined in the system study making them difficult to accommodate within the original agreed upon costs and time lines. It is true that quality was compromised; however this occurred in order to meet the original delivery schedule.
Both have breached the contract in some form, but as managers we do not want to go through the courts and pay for expensive lawyers and spend months in litigation when both firms can re-negotiate the terms and come up...