Ref: Citizen-Schwartz Contract, Legal Risks and OpportunitiesRegarding the recent contract negotiations between Span and Citizen-Schwartz AG, I have summarized the issues and solutions surrounding the performance on the contract and the ability to effect several amendments to conform to recent events, strengthen the contract, and reinvigorate the business relationship and especially to clarify several ambiguous items written into the contract. "The recent case law demonstrates that a party is not likely to prevail on its interpretation of ambiguous contract language where its conduct is inconsistent with its proffered interpretation" (Klausner, 2008).
A dispute was brewing over the quality and schedule of expected deliverables by Span to Citizen-Schwartz AG. At stake was the current contract as well as the potential to win a larger contract once the contract in process has reached the point of complete performance. The legal principle involved was that of a material breach of the contract which could lead to litigation and the possible loss of the future business relationship with Citizen-Schwartz AG (Jennings, 2006).
Citizen-Schwarz AG may have first approached a breach of the contract when they failed properly to communicate and report their changes of project management structure. These occurrences are the main reason for the delay of Span Systems' product delivery. A reasonable agreement was reached to use arbitration should our differences not be amicably settled.
The primary involved issue was that delivery to Citizen-Schwartz AG had been behind schedule and the quality of what had been received had been of unacceptable quality. The legal principles involved were that of standards for performance and when performance would be due (Jennings, 2006). This was an ambiguous area in the contract and was subject to interpretation.
Span's position was that requirements had changed often and had increased substantially beyond what was required by the original contract.