Running head: Recognizing Contract Risk and Opportunities Memo
Recognizing Contract Risk and Opportunities Memo
Chris Kirkwood
Law/531
Pamelya Herndon
Abstract
Contract disputes in business are inevitable if contract clauses are ambiguous or vague. Such clauses are left for individual interpretation benefiting that party creating risks of dispute or breaches of contract with the other party. These avoidable risks are costly in time and money and can have devastating effects on business. Crafting language as the results of proper discovery and review of what potential risks are associated with a contract will assist with driving, not hindering, business.
Recognizing Contract Risk and Opportunities Memo
Span Systems began a $6M (banking software) development project for Citizen-Schwarz AG (C-S) eight months ago. Leon Ther, IT Outsourcing director of Citizen Schwarz AG, claims contractually agreed upon performance and quality are severely lacking; demands the immediate release of all unfinished software; and has stated Span Systems is in breach and has asserted the rescission of the contract. This rescission will impact a larger, more profitable eCRM project with (CS) that is in Span Systems’ revenue pipeline.
This memo will explore the potential breach of contract issues between (CS) and Span Systems; identify and minimize the risks associated with those issues; and identify and seek the benefits of any opportunities presented by those issues. The goal is to come to an amicable agreement to execute as best as possible to reach the objectives of C-S. Additionally, Span Systems needs to keep C-S as a customer for the forthcoming project.
Contractual Clauses
Substantial Performance. Substantial performance is defined as one party of the contract claims the work performed by the other party is not fulfilling the promise of the contract (Jennings, 2006). The contract between C-S and Span Systems (the “Contract”) states that...