Contract interpretation can cause many problems within the business industry. Recently, Citizens-Schwartz AG (C-S) and Span Systems have been faced with several issues regarding the terms of their contract. The main issue is breach of contract in substantial performance of the contract, communications and reporting terms and requirements change in the contract.
A breach of contract occurs when a party to the contract does something against the intent of the contract (FreeAdvice.com). One issue between C-S and Span Systems is the performance of the contract. C-S has demanded that all code be turned over and the contract be rescinded immediately because of the lack of quality of the project as well as the timely basis in which the project has been delivered. The terms of the contract state that 60% of the schedule has to be completed in order to satisfy the agreement. However, only 40% of the project has been completed and Span’s performance is far from substantial (Jennings, 2006). The main focus of Citizens-Schwartz should be to achieve the target goal.
Another issue is with the communications and reporting from the management team. There have been many delays with project reviews that has cause the schedule of the deliverables to fall behind. The company should focus on creating a better system for communication and reporting so that personnel will be notified immediately if there are any problems with performance, quality and/or schedule changes.
The requirements have grown substantially in relation to the contract terms. This has been an obstacle in meeting the deadlines in a timely manner. To prevent future obstacles of this nature, C-S should scale up a team of Span programmers to deliver the project within a reasonable timeframe. The programmers should be agreed upon by Citizens-Schwartz as well as Span Systems.
Another suggestion that will help alleviate any future problems in the project is to appoint a change control panel to review change...