This memo regarding the contract creation and management simulation of Span Systems, a California-based custom e-banking software developer and Citizen-Schwarz AG (C-S), a German bank trying to break into the fiercely competitive and profitable U.S. banking market. This simulation demonstrates the errors and mistakes taken during the contract performance causing these two companies to disagree on principle points of the contract, which eventually leads to Span Systems trying to salvage the contract through renegotiations (University of Phoenix). These contractual disagreements usually lead to loss of production, severance of business relationships, and expensive legal costs. This memo will examine the legal risks, opportunities presented, and alternatives for solving disputes in the simulation.
This memo is regarding the contract between Citizen-Schwarz (CS) and Span. Recognizing contract risks and opportunity can be a tedious task for everyone involved in the specific contract. According to Wikipedia The Free Encyclopedia (n.d), a contract is a binding agreement between two or more parties, that if it contains the legal elements of a binding agreement is enforceable by law or binding arbitration. Citizen-Schwarz (C-S) contracted Span to develop a banking software system. C-S and Span have entered into a $6 million one year agreement that is not working for either one of them. The dispute according to Leon Ther C-S IT Sourcing Director is that Spans deliverables have been behind schedule during the last couple of months.
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The first contractual breach is the fundamental principle of Span Systems performance of the contract. C-S claims that Span Systems deliverables in the past few months are behind schedule and the quality of those deliverables is unacceptable with major bugs detected during the user... [continues]
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