Contract Creation and Management Simulation

Contract Creation and Management Simulation

To: Kevin Grant – Director of Projects – Span Systems

Date: March 30, 2011

From: Michael Louie

Re: Contract Status - $6 million dollar one-year contract and the legal risks and opportunities between Span Systems and Citizens-Schwarz AG (C-S).

This memorandum is written with the importance to address the $6 million dollar one-year contract and the legal risks and opportunities between Span Systems and Citizens-Schwarz AG (C-S). Span Systems is in its eighth month of the performance of the contract and Leon Ther - IT Outsourcing Director of C-S is upset with the progress and nature of the deliverables. He is seeking to rescind the contract and asking for Span Systems to turn over the code, stating that C-S cannot afford schedule slip-ups with regard to the deliverables as the deadline for the release of the transaction software is drawing close.

With the possibility of bidding on the larger e-CRM project in the future, Span Systems must work with C-S to ensure the proper performance of the current contract. Below are the status details of the contract to date.

Legal Issues and Principles Identified

A one-year valid bilateral contract was entered into by the offeror - Span Systems with the offeree - Citizens-Schwarz AG (C-S), to deliver banking software for the consideration of $6 million dollars (Cheeseman, p. 157). C-S is looking for rescission by canceling the contract and asking for restitution from Span Systems by having the code transferred to C-S (Cheeseman, p. 254).

Upon hearing that C-S wishes to rescind the contract, Span Systems’ CEO advises his staff that the contract disputes be settled amicably. The project metrics work in favor of Span Systems as the schedule slip-ups and deliverables are more than substantial to show proof of performance here in the eighth month.

Legal Principles - Breach of Contract

To ascertain the direction to approach C-S aggressively or passively, a review of the contract is...