LAW/531- Business Law
August 30, 2010
Contract Risk and Opportunities Memo
TO: Citizen-Schwarz AG
FROM: Tomeka Farley, Span System
DATE: August 31, 2010
SUBJECT: Contract Creation and Management
Entering into a one year contract with Span Systems just eight months a large German bank, Citizen-Schwartz AG (C-S); just signed a contract trying to establish them into the competitive U.S. banking market. Since this contract has been developed, there have been several issues. The purpose of this memo is to discuss the breach of contract between the two companies while identifying what can be done to avoid certain risks, reduce liabilities, while still creating ways to make the organization successful. When entering into a contract, it a bonded agreement among two voluntary parties that is normally. Cheeseman stated there are four basic requirements for a contract which are agreement, consideration, contractual capacity, and lawful object.
After entering into this contract there has been several changes made on behalf of CS and many of the changes made that were done backhandedly. The contract that was signed was worth 6 million dollars which included Span Systems creating a customized e-banking software program. The contract consisted of five different clauses to help prevent any problems that may occur. Even with these steps in place, there was a breach of contract under substantial performance, internal escalation procedure for disputes, requirement change, communication and reporting, and breach of contract under intellectual property rights.
Performance is the first breach of contract made between the two companies. Since more than 50% of the work has been completed already, neither of the parties could void the contract. The problem with this portion of the contract is that due to no clear indication of what 50% of the work... [continues]
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