Taking a Giant Step


TO:   Span Systems Employees

FROM:   Patricia Ancar Smith, project manager

DATE:   March 30, 2010

SUJECT:   Citizens-Schwarz Contract

Span Systems has a $6 million business venture in pipeline with Citizen-Schwarz Bank. It is necessary for Span to work to resolve the problem between Citizens-Schwarz Bank and Span Systems. It is inevitable that each party involved have had some pitfalls with the progress of the business venture C-S has expressed a great deal of dissatisfaction with the deliverables, low quality, and time frame of the project. Citizen-Schwarz wants immediate transfer of all unfinished code and asserted the rescission of the contract. . (University of Phoenix Simulation)

Principles and specific measures to minimize legal risk

Span must go back to the drawing board to figure out a resolution not to lose this contract.   The project is eight month underway, the deliverables are unacceptable and there are major bugs being detected in the user stage. Either side cannot afford schedule slops because of deadlines for company, investor or stockholders.

Consequently, there are problems at both ends. User and system requirements have grown in view of the fact that original contract is making it difficult to accommodate originally agreed upon cost and timelines. C-S approval and review time have been affected lately do to a change in its project management structure. Consequently, Span has overextended to accommodate, but quality is not excellent. Span is doing everything to make C-S happy.

Alternative to resolve problem

There need to be re-negotiations in the contract because of three contract breaches:

• Substantial performance—neither party man cancel this agreement, in whole or in part, subsequent to more than 50% of the considerations have been tendered by the other.
• Internal escalation procedures for disputes—prior to the filing of any formal proceedings with respect to a dispute, the party believing itself...