Recognizing Contract Risk and Opportunities Memo

Recognizing Contract Risk and Opportunities Memo

Jelena Knowles

University of Phoenix

Business Law

BUS/531

Professor Jason Johannes

August 09, 2010

MEMO

To: Span System Managers

From: Jelena Knowles

Date: August 09, 2010

Re: Citizen-Schwarz AG (C-S) Project/Contract Creation

Hello All,

I am sending this memo to help guide you in avoiding unnecessary risks, minimizing liability, and realizing legal opportunity by describing a recent project related issue with our biggest client Citizen –Schwarz AG (C-S). I hope that you will find benefit in the below scenario.

Situational Analysis

Span Systems was facing a major issue regarding a possible cancellation of contract from C-S. The contract was worth six million dollars and was to be completed within a 12-month period. During the point of conflict, Span Systems was eight months into the project but they were faced with un-anticipated challenges due to an ambiguously worded contract between the two organizations. Fortunately, I was able to mitigate the legal issues and save the business relationship by addressing the issues and identifying legal opportunities as they arose.

C-S Issues vs. Span Issues

The first legal threat came in form of a letter from C-S’ negotiator Mr. Ther, asking for o immediate transfer of all unfinished code. Mr. Ther also stated that he was asserting the rescission of contract by C-S. The grievances listed by Mr. Ther included:

• Span’s deliverables in last two months have been behind schedule

• C-S can't afford schedule slips due to deadline of release of transaction software

• Quality has been unacceptable: major bugs detected during testing stage

Based on Mr. Ther’s letter, we knew that there were serious issues. Before considering our legal options and responses to Mr. Ther’s letter, I reviewed the metrics below:

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After reviewing the metrics, I also considered the issues that Span Systems was having with the C-S Project. The issues I...