Contract Risk and Opportunities Memo

Contract Risk and Opportunities Memo
In this paper I have to prepare a memo to discuss what legal risks and opportunities are in the Contract Creation and Management simulation. Also identify the legal issues present and note legal principles and determine what I would do as the project manager for Span Systems would do to avoid those risks, minimize liabilities, and benefit from opportunities. Assess alternatives to resolve these problems identified in the simulation and give an explanation on which alternative approach that would best solve the problem between Span Systems and Citizen-Schwarz AG (C-S).
DATE: 02/17/2009
Leon Ther of Citizen-Schwarz AG (C-S) is very upset with the job if Span and decided to write a letter to Kevin Grant in reference to the contract. Ther feels that the deadlines in the contract have not been met and is ready to transfer all unfinished code and declare the rescission of the contract. As the project manager for Span I cannot let this happen. I have to figure out a way to solve this problem quick because we have to keep this contract and also get the e-CRM contract with Citizen-Schwarz AG.
Citizen-Schwarz AG project management as changed since the beginning of the original contract which was agreed up on this September. So I have decided to talk to C-S about the problem but before we do this we have to take a closer look at the clauses in the contract for the negotiations with C-S. I have evaluated the contract and decided that these three clauses will benefit us the must during negotiations:
1. Breach of Contract under ???Internal Escalation Procedure for Disputes,???
2. Breach of Contract under ???Communications and Reporting??? and,
3. Breach of Contract under ???Intellectual Property Rights.???
Each clause has its pros and cons. The first clause, ???Internal Escalation Procedure for Disputes,??? pros are that C-S has is in clear violation of its legally binding agreement and C-S has no cons unless they contest the contract. The second clause, ???Communications and Reporting,??? pros are the main reason for the delivery delay is due to the project management structure changes at C-S. This is the reason why they want to cancel their contract with us and we cannot allow this to happen. The cons are that there is no evidence of the delay due to the turnaround problems at C-S. The third clause is the ???Intellectual Property Rights.??? The pros of this clause is that all the work and afford that was put into this project still belongs to us until we are paid in full for all the work that has been completed before any information can be released to C-S. The down side is that C-S can make the payment and then turn around and get the Intellectual Property Rights (IPR) to transfer and cancel the contract (Contract Creation and Management Simulation (2009)).
I have taken my ideas to our attorneys and they don??™t think that this will be a good time to miss with the IPR card. But in December we were discussing our clauses to the attorneys our marketing manager in London that C-S is taking with an Indian software developer about finishing the project that we have started one that get the codes from us. This is clearly a violation in the contract the Citizen-Schwarz AG has entered in with us. We are not about to allow this to happen so I have to reevaluated the clauses??™. I decided to change the first clause which was the Breach of Contract under ???Internal Escalation Procedure for Disputes??? to the Breach of Contract under ???Requirements Change.??? This means that things have changed since the original contract and are unable to meet the deadlines and this could play a major role in whether or not our claim is valid. The attorneys approved my decisions to the contract clause so I sent them to Leon Ther at Citizen-Schwarz. His response to my email in reference to the quality and scheduling was that he agrees with the e communication and reporting clause but finds no confirmation to the claim. Ther also assure us that there was no violation to the IPR in reference to our copyrights. Leon does not like the requirements change clause of the contract because he claims that there has not been any major changes to the scope (Contract Creation and Management Simulation (2009)).
Since Citizen-Schwarz is not happy with our contract clause we have to look at what measures we are willing to take to make sure that we keep our contract with C-S. I decided to appoint a change control panel to review and changes and flags that may come into play in the project scope. Have a quality control panel to evaluate the delivery defect claims and determine a solution. And last but not least and more programmers to our team to help to make sure that thing are getting delivered on time. These measures were sent over to Ther and his response was that he wanted to add a C-S manager to monitor the quality control panel and help with the solutions. And he loved the idea of having more programmers on the job and change control panel. The new clauses and measures have saved our contract with Citizen-Schwarz.
Know we have to draft a new contract of all the negations decisions. There are five areas in which the contract will change in. They are performance, change control, communications and reporting, and project structure. The amendment change for the performance clause is that C-S may terminate this agreement in whole but payment is due to us for all completed work. The next amendment clause change is change control. And this means that at anytime the changes are made both manager from us, Span, and C-S will determine the effectualness of the change.
In the communications and reporting amendment clause a meeting will take place and C-S project manager will be present at all meeting and C-S will be paying for this manager to attend these meetings. And the last amendment clause is the project structure clause. This clause at least ten more programmers will be added to our team to make sure that we meet all deadlines (Contract Creation and Management Simulation (2009)).

Contract Creation and Management Simulation (2009). Retrieved November 16, 2009, from University of Phoenix, LAW/531 Week 3 rEsource.

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