Law 531 Week 3

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As you know, eight months ago we entered into a contract with Citizen-Schwarz AG to create custom e-banking software. The agreed contract outlined the details of the arrangement, including on-schedule delivery and quality of the deliverables, strong communication between both parties, procedures for any changes in the system requirements, intellectual property rights, and dispute management procedures. Depending on our performance, we were projecting to gain an additional contract with C-S’s larger e-CRM order. Unfortunately, the original contract was filled with ambiguity from the start that increased the risk factor for both parties.

Eight months into the project, our contact at C-S, Mr. Leon Thur, was not pleased with the product manufactured at Span Systems. Mr. Thur asserted that the products from Span Systems were delayed, the finished quality was not to their satisfaction and the product and showed “major bugs”. Subsequently, Mr. Thur requested that Span Systems transfer all unfinished codes and rescind the contract between Span Systems and C-S. As project manager I was aware of the production and delivery problems; however they were at both ends.

The rapid development in user and system studies had changed dramatically from the original contract making it difficult to accommodate the original due date. The contract allowed ordinary requirement changes however the requirement changes were not ordinary resulting in increased production cost and a decrease in quality. Some of the risks associated with Span Systems are •C-S’s views and questions regarding performance on deliverables •The scope of the project

Span Systems has witnessed the miscommunication between our companies that impacted the schedule and the quality of the software being delivered, and the growing requirements and changes since the system study was performed. As a result, the original contract clauses were reviewed, and three were chosen to favor Span in the negotiation to...
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