Contract Negotiation

1590 Words Apr 29th, 2011 7 Pages
Contract Creation and Management Simulation


In the contract creation and management simulation involving Span Systems and Citizen-Schwarz AG (C-S) the conflict involved and possible resolutions could be beneficial or catastrophic for both companies. Legal risks for corporations in the process of implementation and development of a program are many. To prevent this there must be direct, quantifiable benchmarks that are acknowledged by all parties involved. Any contract ambiguity that occurs can result in differences in opinion on interpretation and the resulting need for negotiation, mediation, and possibly litigation. This would result in time, money, and effort for both parties which is not a desirable outcome. The
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With the current deployment of the system at 40% when they should have been at 60% according to the timeline, along with a substantial error rate, they are not in a position to argue these terms. The communication clause has been violated by both parties. As a manager of Span Systems communicating this fact and relating the delays and errors to C-S is a strong move toward renegotiation. C-S has to be aware of the timeline changes as a result of the added programming beyond the scope of the original contract. As a manager of Span Systems openly admitting to the lack of follow through on the communication clause would save face with C-S and allow negotiations for a new plan to meet the performance clause of the contract. An improvement in the contract would have been to have a ceiling or cap on the changes over a certain period and a resultant change in timeline and fees associated (Bond, 2007). Span Systems would be within their right to request a “Modification of Executory Contract Due to Unantipated Circumstances” due to the increases in modification of the program not anticipated at the time of original entry into the contract (Saunders & Rymsza, 2010). This is still a litigation process under Section 89 of the Restatement (Second) of Contracts. Caution should be made if this is going to be the grounds for modification as a manager at
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