Recognizing Contract Risk and Opportunity

Recognizing Contract Risk and Opportunity Memo

                                                    Roosevelt P. Harris, Sr.


To:   Addie Johnson

From:   Roosevelt P. Harris

RE:   Legal Risk and Opportunity in Span System and Citizen – Schwartz, AG Contract

Date:   02/11/2010

Contract Law evolved to provide enterprises with the sense of predictability and security. (kubacek, Brennan & Brown (2003).   It is the responsibilities of all parties entering into a contract to make sure the language of the contract is unambiguous.   Reliance on written words is paramount and essential in avoiding disputes.   This memo is intended to point out the risks and opportunities present in the Span System and Citizen – Schwartz, AG Contract.   This was Span System biggest banking project with Germany’s biggest bank.   Performance on this contract could lead to landing a bigger contract with Citizen- Schwartz.   Citizen – Schwartz, AG is attempting to rescind the contract with Span System because of Performance, Quality and Timeliness.


      The primary risks in the contract between Span System and Schwartz, AG was the ambiguous language used throughout the contract.   There was no clear definition of the scope of the project nor was each party’s responsibility clearly defined.   User and System requirement were not established.   Therefore, the potential cost and timeliness loomed as a potential area of dispute as the project progressed.   All of this ambiguity leads to deficiencies and delays which resulted in the dissatisfaction at Citizen – Schwartz, AG and escalated to the decision to rescind the contract.   It is important to look at each point of contentment.


      Citizen – Shartz, AG contentment that Span System performance had been unacceptable because of delays in bringing the forward on schedule was valid.   The cause for such delay was inevitable due to the...