Contract Creation

Contract Creation and Management Memo

Span Systems is based in California and is a custom e-banking software development company that has entered into a $ 6million contract with Citizen Schwartz (C-S) to develop new banking software. A contract is defined as a promise for which the law gives a remedy. All parties must agree and understand the terms and conditions before a contract is signed. The companies are eight months into the contract and have experience poor performance, organizational changes, poor communication and reporting and lack of project structure. All of the previous listed items have the possibility of resulting in a breach of contract. This memo examines the legal risks, opportunities presented, and alternatives for solving disputes in the Contract Creation and Management Simulation.

Legal Risk and Opportunities

Citizen-Schwarz AG agreed to a contract with Span Systems in order for them to create custom e-banking software. The contract was created mapping out the details of the agreement. This agreement included timeliness, quality of work, and proper communication between both parties. The two companies are disputing due to lack of quality and schedule conflicts. The negotiator on behalf of C-S is threatening to transfer any codes that are not completed and rescind the contract. Several risks were assumed by both parties involved in the contract and the uncertainty of the contract increased these risks. C-S and Span Systems have negotiated to revise the contract in order to suit both parties.

Breach of Contract

The fundamental principle of Span Systems is the first contractual breach. In the recent few months C-S alleges that Span Systems deliverables are unsatisfactory with major defects and are greatly behind schedule. “The contractual agreement on performance stated that neither party can cancel the contract when more than 50 percent of the promised specifications are completed” (University of Phoenix, 2010). The risk of...