Contract Creation and Management

CONTRACT CREATION AND MANAGEMENT

Analysis of Issues in Contract Creation and Management Simulation

University of Phoenix

LAW 531

Abstract

California-based software developer, Span Systems and the German Bank, Citizen-Schwarz AG (C-S) decided to enter into a one-year long contract worth $6 million for the development of an e-CRM system for C-S. Kevin Grant, the Span Systems’ Project Director is in charge of monitoring the performance of the project. Harold Smith represents Span Systems as their attorney, and Leon Ther , the Outsourcing Director for C-S is the top negotiator for the beneficiary.

Eight months into the contract, the project experienced late deliverables and quality issues. As a result, Leon Ther becomes concerned with Span Systems' ability to perform as per the contract and makes threats to rescind the software development contract invoking the following issues: failure to deliver on time and the high number of quality problems determined during the testing period. In addition to the rescinding of the contract, Ther demands the release of all unfinished code for the transaction software still owned by Span (University of Phoenix, 2002). In attempt to rescue the situation, Span Systems responds to C-S proposing to consider each party’s rights and obligations under the following contractual clauses: (1) Breach of Contract under ‘Internal Escalation Procedures; (2) Breach of Contract under ‘Requirements Change’ and (3) Breach of Contract under ‘Communication and Reporting.

Just before the re-negotiation process starts, Span’s Marketing Manager in London reports that C-S is talking to an Indian-based software developer about completing the project that Span is working on. The Marketing Manager also alleges that C-S has shared software codes with the Indian business and that the Indian company began working on completing Span’s partial software development (Contract Creation and Management, 2011).

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