Contract Dispute

“A contract is a promise or set of promises for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.” (Jennings 2006.p497) Quite often when two businesses merge as one or work on a project together, a contract is developed in order for the businesses to understand each other’s roles. As stated in the introduction of the simulation, a contract that is poorly written could cause more of a headache for both businesses. The problems between Majestic Hotel and InfoBuild the software programming company began even before the contract was finalized. The companies could not agree on the terms and conditions of the contract, which created problems that ended up being litigated in the court. Even though the court favored in Majestic Hotel for a settlement of over $100 million dollars, there was clearly a no winner in this. The reservation system the hotel was looking for was never built; cost of the litigation took years, which was a waste of resource and money for both parties. The introduction of the simulation clearly states, a good contract is a start of a good relationship between both parties.

A contract could be considered as a “private law” (Jennings 2006, p 496) between businesses. A contract could be the main source of the problem in disputes between businesses. In the second simulation, Software Company, Span Systems, signed a $6 million one year contract with Citizen-Schwarz AG (C-S), a large German bank. C-S relied on the software company to complete the tasks efficiently and without delays; so that, the bank would receive a profitable e-CRM order.

After eight months, Span Systems’ performance has not satisfied Citizen Schwarz, due to poor quality of work and slow delivery service, which is worrying Citizen Schwarz, because of their anticipated release of the new software to the market. Due to the problems with the software company Span, C-S has asked the company to immediately transfer...