Contract Creation and Management Simulation

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Contract Creation and Management Simulation
University of Cincinnati
Legal Environment of Business
Judge Jim P. Ponder
July 2, 2000

Contract Creation and Management Simulation
The simulation begins in the middle of a major dispute between a software-developing company, Span Systems, and one of its customers, Citizen-Schwartz AG (C-S), a large German bank. The two companies are in dispute over the quality and timeliness of deliverables. There have been major bugs found by C-S during testing and are worried about Span not fulfilling the one-year contract, which is worth $6 million. Span's main concern is securing a larger contract with e-CRM, which is tangent on the outcome of the current contract. C-S has requested all code and asserted the rescission of the contract. Future Business Opportunities

Performance of Contract
The contract states, "… neither party may cancel this agreement, in whole or in part, subsequent to more than 50 percent of the consideration having been tendered by the other" (UoP Simulation). Since C-S requested all code, it is in breach of contract because more than 50 percent of the deliverables have been delivered. By looking at the big picture, the e-CRM contract, Span is willing to discuss and give concessions regarding the quality issue. Internal Escalation Procedure for Disputes

The current contract covers the internal escalation procedure for disputes. The party believing itself aggrieved shall call for progressive management involvement in writing to the other party (UoP Simulation). C-S requesting all finished and unfinished code is a direct violation of the current contract. Span is willing to set this aside if C-S rescinds its request. Requirement Changes

Change Management. The current contract is written to cover a one-year time frame. C-S' user and system requirements have grown, especially in the software arena. The original contract should have addressed "out of the ordinary" changes, but it didn't....
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