Premium Essay

Recognizing Contract Risk and Opportunities

In: Business and Management

Submitted By Renamrich
Words 1427
Pages 6
Recognizing Contract Risk and Opportunities LAW/531
Introduction
Contracts are a binding, critical part of any business deal between two or more parties. Because of the binding promise between these parties it is important that the contract is clearly worded, negotiated if-need-be, and reviewed before they are signed by all applicable parties. Cheeseman (2010) stated “A contract is a promise or a set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty” (Chpt 9, Para 2). The following Memo will identify the legal issues presented in the Contract Creation and Management Simulation as well as identify what a manager may do to avoid theses risks and minimize liabilities.

Business Memo -- Confidential
TO: Project Leadership Team Span Systems – Kevin Grant, Harold Smith
FROM: Mike Myers, Project Manager Span Systems
DATE: 03/20/2011
SUBJECT: Contract Risk and Opportunities between Span Systems and Citizen-Schwarz AG
CC: Board directors
The one-year contract written between Span Systems (Span) and Citizen-Schwarz AG (C-S) to develop banking software has recently met with some serious concern regarding if it can remain intact as it currently stands. Recently Leon Ther: the IT outsourcing director of C-S sent a letter stating that “C-S cannot afford scheduled slips because of its deadlines for the release of transaction software in the market” (Simulation, 2011). In the letter, Ther has asked for the immediate transfer of all unfinished codes and asserted the rescission of the contract. Rescission is the cancellation of contract by the agreement of the parties. Ther’s reason is Span has spent eight of the 12 months working on the project yet have not met deadlines and have not provided quality products to this point. The...

Similar Documents

Premium Essay

Recognizing Contract Risk and Opportunities

...LAW/531 Recognizing Contract Risk and Opportunities A contract has been written, negotiated, and agreed upon by Spam Systems and Citizen Schwarz AG for the delivery and implementation of a banking software program. Span Systems (SS) is a highly reputable software company and Citizen Schwarz AG (C-S) is a large German bank. Harold Anteau is the project manager for Span Systems. He is backed by the Director Kevin Grant, and the company attorney Harold Smith. Leon Ther is the chief negotiator for C-S, and he is assigned to oversee the project for C-S. Eight months into the contract problems arise between the two companies pertaining to the terms of the contract. Leon Ther threatens to rescind the contract because of poor quality and not meeting agreed upon timelines. Harold Anteau and Harold Smith review the contract to determine SS’s standing. Three legal issues arise under the contract clause of breach of contract. They are substantial performance of contract, requirements change, and communications and reporting. Breach of contract is a common defense raised to elicit negotiations (Cheeseman, 2010). It is only effective against an ordinary holder of the contract (Cheeseman, 2010). Under the Uniform Commercial Code (UCC) [UCC 2-301], tender of delivery is the most basic obligation. It requires the seller to transfer or deliver goods to the buyer in accordance to the terms of the contract (Cheeseman, 2010). Leon Ther is right when he states the......

Words: 1173 - Pages: 5

Free Essay

Recognizing Contract Risks and Opportunities

...Recognizing Contract Risks and Opportunities Jennifer Breeden Law/531 Business Law March 6, 2011 Monica Cosentino-Benedict Recognizing Contract Risks and Opportunities MEMO To: Span Systems Management From: Jennifer Breeden Date: March 6, 2011 ------------------------------------------------- Subject: Recognizing Contract Risks and Opportunities The purpose of this memo will be to analyze the recent contract between Span Systems (Span) and Citizen – Schwarz AG Bank (C-S). This contract’s purpose was to have Span build a transaction processing-based software system for C-S and in return C-S would pay $6 million dollars (University of Phoenix, 2002). These two companies come up against many disagreements about the language and meanings of the contract. In the end, Span worked very hard to renegotiate the clauses of the contract to continue a positive working relationship with C-S. This memo reviews the legal risks, liabilities, and opportunities that occurred during this process to make future business with C-S and other companies to come more enjoyable for both sides. Risks and Liabilities A breach of contract is the first accusation C-S made of Span, which starts the list of risks and liabilities. C-S said that the deliverables were below the standards agreed upon and were not delivered on time. C-S claimed that Span was producing deliverables of substantial performance, meaning that they were below standards set up in the contract. Span could......

Words: 1467 - Pages: 6

Premium Essay

Recognizing Contract Risk and Opportunities Memo

...Recognizing Contract Risk and Opportunities Memo Law 531 Charles Cook January 31, 2011 Recognizing Contract Risk and Opportunities Memo DATE: January 31, 2011 TO: Kevin Grant Harold Smith Leon Ther FROM: Michelle Boldt RE: Banking Software Contract Issues Due to recent negotiations with the binding contract between Span Systems and Citizen-Schwarz AG (C-S), necessary changes have come to light. After thorough discussions between myself , Span Systems legal team, and CS's negotiator, Leon Ther, three major amendments within the contract have been agreed upon. Contract clause breaches Performance While performance has been under par in relationship to C-S's requirements, debate over the additional changes within the product specifications have clouded efforts. Communications and Reporting The change in project management disrupted the flow of work in respect to communication and project expectations. While it was a deficiency on Span's ability to work continuously through the changes, with the weakness identified and addressed, this issue can be corrected and avoided in the future. Requirements Changes In the recent past, C-S presented numerous changes in specifications, time requirements placed additional hardships on the production and design team. Thus, disrupting the agreed upon time frame. Legal principles The majority of clause issues within the contract revolve around a lack of communication. While Span......

Words: 577 - Pages: 3

Premium Essay

Recognizing Contract Risk and Opportunities Memo

...Recognizing Contract Risk and Opportunities Memo Cliff Brown Business Law 531 April 6, 2011, 2011 Chris Phan Memo To: Span Systems Management From: Manager Date: April 06, 2010 Subject: Recognizing Contract Risk and Opportunities Management Team: There is grave concern with respect to the contract between Span Systems and Citizen-Schwarz and its ability to remain unharmed. The organization has made the decision to guarantee that this project gets done promptly and with first-rate quality of the outcome to enable Span’s opportunity of getting C-S’s e-CRM order. The accomplishment of acquiring the next contract with C-S is relies heavily on the current project’s status. The company is committed to getting this project finished affably between each party. The performance within the contract is one of the issues within the project. C-S’s position is we are late on schedule and our product deliverable is not the best of in quality as forecasted by C-S. The language of the contract maintains that C-S may not repeal the contract if greater than 50% of the project schedule has passed; however, C-S is demonstrating that the performance within this period has indicated the quality of product deliverables is inadequate and consequently it is within their rights to assert that we have not significantly executed. The project management team at Span will argue against this claim due to the amplified change of end user obligations. To rectify this, we......

Words: 414 - Pages: 2

Free Essay

Law 531 Entire Course

... LAW-531-Week-2-Assignment-Business-Regulation-Simulation-VERSION-2 LAW-531-Week-2-Assignment-Recognizing-and-Minimizing-Tort-and-Regulatory-Risk LAW-531-Week-2-DQs LAW-531-Week-3-Assignment-Recognizing-Contract-Risk-and-Opportunities LAW-531-Week-3-DQs LAW-531-Week-4-Assignment-Legal-Risk-and-Opportunity-in-Employment LAW-531-Week-4-DQs LAW-531-Week-5-DQs LAW-531-Week-5-Risk-Arising-in-Tangible-Property-and-Intellectual-Property LAW-531-Week-6-Assignment-Corporate-Compliance-Plan LAW-531-Week-6-DQs Activity mode aims to provide quality study notes and tutorials to the students of LAW 531 ENTIRE COURSE in order to ace their studies. LAW 531 ENTIRE COURSE To purchase this visit here: http://www.activitymode.com/product/law-531-entire-course/ Contact us at: SUPPORT@ACTIVITYMODE.COM LAW 531 ENTIRE COURSE LAW-531 Final Exam Three......

Words: 517 - Pages: 3

Premium Essay

Social Media

...As the prevalence of social media continues to rise, businesses are recognizing ways in which social media can direct customers to make better decisions for purchasing items. As a result, businesses are now jumping on the social media bandwagon at a rapid pace, embracing social networks to achieve their marketing and business goals. Instagram is a major social media outlet that many business owners and small businesses use to promote the sale of their items and/or products. First and foremost social media is everyone’s go to for information or when they are looking for certain things. It is easier and way more covienient for most Americans, especially the ones that have families and do not have the opportunity to get out and go shop often. Instagram is the most liked social media, I think today. A lot of people who had only a dollar and a dream in starting a business have now prospered and are making thousands through social media. Take for instance the virgin hair industry, many business owners have built their customers and professional relationships through the social network and keeping communication through email. Social media is a good way for business owners/entrepreneurs to launch their business and promote the products they sale. This helps small business or business owners increase their customer loyalty as a dialogue is created. It can also help solidify and strengthen the company’s efforts at distinctively branding its products in the public eye. ......

Words: 838 - Pages: 4

Free Essay

International Legal and Ethical Issues

...Ethical Issues Simulation Analysis Businesses must ensure legal protection from other foreign country companies from adverse actions. There is high risk in international business transactions and CadMex need to protect against them. Steps to protect the business legally is crucial when selecting the choice-of-law, and selecting clause in the simulation. Establishing terms in a contract is important factor in a business partnership between foreign countries to protect interests for each party. After completing the first section of the simulation identifying the choose-of-law in the United States regarding specific contracts is Contract of International Sale of Goods (CISG) for domestic business transactions that cover marketing ProPez. CISG laws cover the use of technology in this case with Gentura; however, does not cover licensing or patents. International Arbitration non-binding contract provides variety of dispute resolution organizations to resolve contract disputes may take a year instead of awaiting court availability in this case, it is less expensive, and recognize contract internationally. This option safeguards CadMex’s interest with certain contingencies under contract law applicable in this case. After Candore gained World Trade Organization (WTO) the best choice remains CISG fits terms in the contract cover marketing ProPez and technical training, but does not cover patents and licensing. In March 2007 an unidentifiable viral epidemic......

Words: 641 - Pages: 3

Premium Essay

Erm 7-Step Process

...ERM 7-Step Process ERM 7-Step Process According to Harb, Enterprise Risk Management is people, systems and processes working together across the organizations to systematically think about and manage a wide range of risks that could impede achieving organizational objectives/opportunities. In this paper we will discuss the potential tort risk that arose as a result of Non-Linear Pro leasing unsatisfactory equipment to Quick Takes, and how to effectively apply the 7-Step Enterprise Risk Management process in evaluating the violation that was imposed upon Quick Takes by Non-Linear Pro, when they failed to supply equipment that performed as advertised it to perform. In the Product Liability Video, Non-Linear Pro leased hardware to Quick Takes. The equipment was leased to Quick Takes with the understanding that it would speed up editing time. Quick Takes soon discovered that the equipment did not have enough memory to get the job done, which caused their competent editors to work tirelessly for two weeks with little results. From the video we gather that Non Linear Pro has committed several tort violations in the dealings with Quick Takes such as: 1. Misrepresenting the quality of the product. 2. Express Warranties – Non Linear Pro made the express warranty as to the way a product would perform, guaranteeing the product would in fact perform that way. 3. Breach of Contract – Product did not perform the way it is intended to. 4. Damages: Benefit of the Bargain-......

Words: 1439 - Pages: 6

Premium Essay

Importance of Training in Energy Risk Topics

...develop systems that monitor and manage the complex risks experienced in today’s energy markets. Yet when it comes to developing its human capital, arguably the more crucial component dealing with these same complex risks, the commitment is all too often diffuse or misdirected. This situation follows on from some misperceptions about who benefits from training and what type and level of materials match the needs of various candidates. One misguided view is: “hire expert dealers and everyone else will learn from them”. Undoubtedly a great deal of useful knowledge can be acquired by working around veteran traders and other experienced professionals. The trouble with this learning approach is in the major gaps it leaves in the employee’s knowledge base. The real concern is that, more often than not, the employees and even their supervisors can remain unaware of these deficiencies. A substantial risk to an enterprise follows from this: People don’t know what they don’t know! It is also the biggest challenge in identifying an organization’s specific needs for energy risk training. It applies to both individuals and collective groups; to both new hires and seasoned veterans. It is what they don’t know that can really hurt an enterprise. A Lot to Learn Repeatedly over the last decade Paradigm instructors have seen professionals, self-described at the beginning of class as “reasonably knowledgeable” in risk and derivative concepts, admitting by......

Words: 1591 - Pages: 7

Premium Essay

Global Financial Management

...Global Financial Management FIN630 AIU   Abstract This paper will have a comparative advantage of Vernon's product life-cycle theory of FDI. It will discuss green field investments over cross-border acquisitions and political risk of capital budgeting process of foreign investment projects. It will also discuss forward versus backward internalization and currency exchange risk into the capital budgeting process of foreign investment.   Global Financial Management Vernon’s Product Life-Cycle Theory Raymond Vernon proposed his Product Life Cycle (PLC) theory in the mid 1960’s, based on product development and international trend observations of the US role at the time. The PLC theory stated that new products would first be developed and introduced in the US. Advanced markets, such as Europe and Japan, had their demand grow which caused the US to export the new product until the demand levels in the foreign country required the production in the advanced markets. Cost factors become significant as the product reached a maturity phase in the life cycle which warrants the production at the most efficient location. That results in advanced markets exporting the product back to the US. The product is produced in plants located in developing countries because these countries hold a relatively low cost production advantage, as competition further increased in the global market place. The product would once again be exported back to the US (Hill, 2009). Firms will......

Words: 1060 - Pages: 5

Premium Essay

Recognizing Contract Risk

...Recognizing Contract Risk and Opportunities Memo TO: Span Systems Management FROM: Risk Management DATE: May 31, 2011 MEMO: Recognizing Contract Risk and Opportunities Span Systems and Citizen-Schwarz AG (C-S) have been negotiating a one-year contract worth $6 million; however, eight months into the project we are behind schedule on contract deliverables. As we know, these issues can be pinpointed to the detected bugs in the user testing stage as well as system growth since the agreed upon timeline and costs. Although, I appreciate the diligence of the team to meet deadlines, it seems quality may have been the cost. To address these concerns, I will outline the issue affecting the Span Systems and Citizen Schwarz (C-S) contract: Issue : Unable to meet schedule deadlines and deliverables are below quality standards Contract Clause: Tender of Delivery – Transfer or delivery of goods to the buyer of lessee in accordance with a sales or lease contract (Cheeseman, 2010) Prevention: Ensure timely delivery and quality of goods through agreed upon time-lines, checkpoints and audits. Resolution: A collaborative project environment will benefit C-S and Span. This collaborative environment ensures quality and timeliness of deliverables as well as allowing issues and concerns addressed directly. The simulation suggested a C-S project manager to assist in a quality control capacity on the project. In addition, increasing Span programmers to increase productivity......

Words: 277 - Pages: 2

Premium Essay

Cendant Case Study

...company’s assets by an owner, manager, or employee of the company. Fraudulent financial reporting occurs by intentionally misstating or omitting important items from the financial statements. Financial reporting fraud is what occurred in the Cendant case. CUC’s management inflated earnings by recording fictitious revenue or reduced expenses in order to meet earnings expectations. c. One factor the auditors should consider when assessing the likelihood of fraud is whether the corporation has any incentives or pressures to commit the fraud. In order to have the opportunity to merge or acquire other companies, CUC needed to meet their earnings expectations. This could have been a sign to the auditor’s that CUC had a reason to inflate their revenues. Another factor to consider is whether there are opportunities to commit a fraud. CUC made various year-end adjustments to their general ledger. This allowed CUC opportunities to fraudulently adjust their general ledger through various techniques. Auditors should also consider if there are any rationalizations available to the company to justify committing a fraud. It was noted in the case that senior management created an environment that suggested inaccurate financial reporting was...

Words: 1655 - Pages: 7

Premium Essay

Project Planning

...charitable event and the work combined herein is on the skill to control children's miracle progress and center on an overall developed and highly disciplined advance to the relief of information reserves and media products and services without the necessity to function and maintain the medical infrastructure. Statement of Work ( SOW) This basic contract SOW defines the scope of a full range of environmental, minor construction, operations and services activities necessary to meet the charitable event and other children needs requirements. This basic contract SOW will be tailored to identify specific requirements at the task order level. This SOW includes the full range of routines, technologies, and supporting behavior essential to perform charitable event for Children's Hospital restoration/remediation, operations and services efforts to address medical sites and/or conditions at Charitable Event installations and in agreement with technical and regulatory obligations, and a limited choice of construction and further services as entailed in maintain of those and other attempts as addressed herein. Conditions under this contract will mostly support medical restoration/remediation, operations and services efforts; but conditions may also comprise conventional minor construction, and repair. Requirements include efficient management including, but not limited to, the compliance of precise, on-time, quality agreement deliverables and timely classification......

Words: 1416 - Pages: 6

Free Essay

Alternatives to Incarceration

...believe that the broader public and political has not similarly reoriented itself around this framework, despite the apparent shift towards rehabilitative reforms. Neorehabilitaive reforms maintain the dame framework of exclusion that created policies that increased prison populations even though the rhetoric of reform has changed. So to speak, “unless and until the public politicians develop the will to fund a reintegrative system, economic sanctions may be another alternative to incarceration implemented in the wrong way despite the ally’s efforts to the contrary.” (Eaglin, J pp. 1851) In regards to describing alternatives to incarceration that juvenile courts currently use, some of the best practices point to “the use of standardized risk-assessment instruments, which can objectively determine which young people pose a danger to society. Such assessments can limit and target the use of detention and secure placement and make the use of...

Words: 747 - Pages: 3

Premium Essay

Manufactured Homes

...will overstate the assets, the business could get damaged and then it will loose its viability. 2. Most of Manufactured Homes its sales were credit sales whereby the customer paid a down payment of 5 to 10 percent of the sales price and entered into an installment sales contract with the company to pay the remaining amount over periods ranging from 84 to 180 months. A sale is recognized when payment is received or in this case of credit sales, when a down payment (5 to 10%) is received and the company and the customer enter into an installment contract. At the time of sale, the company receives immediate payment for the stated principal amount of the installment contract and a portion of the finance participation resulting from the interest rate differential. This accounting treatment is reasonable/not reasonable, because the way Manufactured Homes accounts for these transactions as sales are in accordance with Statement of Financial Accounting Standards. They recognize their sales at the moment the manufactured homes are sold and they will get paid immediately. So it’s approved if we look to the matching principle. 3. The company generally sold the majority of its retail installment contracts to unrelated financial institutions on...

Words: 1367 - Pages: 6