Business Law 531 Case Study

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Business memo: Contract Creation and Management Simulation Attention: School: University of ...... Course: Business Law 531 Student Name: Annet Tuhaise  A contract is a legally binding agreement between two or more parties as identified in the agreement. All involved parties are bound to fulfill the agreed upon terms and conditions of the agreement. The contract should be signed and dated by all the involved parties as an acknowledgement and agreement to the terms and conditions there in. In business, whether local or international, contract creation and management with customers, vendors, partners, or employees are essential part of management. Contract creation and management includes identifying and negotiating…show more content…
So many issues came up right from the start of the contract. This could have been due to the fact that, the contract was hard to make in the first place, whereby both parties fiercely negotiated every clause of the contract and worse still could hardly reach any consensus. The contract became more complicated because software requirements were not very clear to either party. The contract was ambiguous and both parties went ahead and signed it anyway. Lack of clarity of purpose can be a risk and a legal issue leading to disputes. The major legal principle here is that, companies should always endeavor to clarify and understand each and every clause of the contract so that they know what they are committing themselves too. It lessens on the misery caused during times of disputes. No matter how easy and simple it may appear during the contract signing process, it becomes totally complicated to understand and agree upon a common interpretation of ambiguous clauses when disputes come up. For instance, in the simulation given, there were ambiguous clauses like “ordinary requirements change” which became a source of conflict because the software user and system requirements changed over time which were had to just incorporate into the contract because of the big effect they had on the project costs and…show more content…
According to Citizen Schwarz Ag (C-S), Span Systems did not deliver on schedule and more to that, the quality of the deliverables were substandard with bugs in the testing stage. Citizen Schwarz Ag (C-S) therefore requested immediate rescission of the contract and release of the code. However sensible this might have been to them, Span systems had delivered over 50% of the deliverables therefore it would be breach of contract if the contract is cancelled. Citizen Schwarz was too concerned with the deliverables but it did not take into account the entire new user and system requirements that had changed over time causing delivery slips. The new changes have been difficult to accommodate within the existing budget and timeline. The client did not take into consideration the fact that, adding new requirements would greatly affect the projects schedule. The legal principle here should be that, companies need to stick to the agreed upon contract clauses and in the event of change like system requirements, the involved parties should amend the contract by revising the relevant clauses to capture the new terms and conditions. In simulation, performance and delivery schedule disputes were resolved by agreeing to revise the terms that included recruiting and scaling up the team members on the Span Systems side in order to speed up the delivery schedule. The quality issue was to be addressed by

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