IntroductionCitizen-Schwarz AG, a large German bank, has contracted span Systems, a global software designer. Span Systems and C-S have had a tremulous relationship. The strained relationship led to claims and counter claims over quality discrepancies, schedule changes and end-user requirements. User and system requirements have increased since the system study stage. The unusual changes have affected C-S's approval and review times. Span's team has gone above and beyond to meet the new schedules. Quality has suffered as a result of the demanding schedule.
Throughout this paper Team B will discuss regulation, legal procedures, needs and risks of both companies. Our team will analyze which contract provisions are necessary and which party will prevail.
Citizen-Schwartz BankCitizen-Schwarz wants to rescind the contract with Span System, a software provider, claiming on the failure of on-time delivery and unacceptable quality for several months. C-S seems to transfer unfinished code to an Indian software provider in the market because they cannot afford schedule slips due to its deadline for the release of the transaction software in the market that can be a legal violation against Span.
Legal PositionBreach of contract under substantial performanceC-S party's requirements have been changed and system has developed since the bid on the project. C-S's require to terminating the contract with Span will be a breach of contract in substantial performance of contract since C-S's more than 50% of the project schedule has elapsed. This case is a partial breach or an immaterial breach that occurs when the non-breaching party is unentitled to an order for performance of its obligations, but only to collect the actual amount of their damages (Wikipedia, 2007).
Breach of contract under 'internal escalation procedure for disputes'C-S has unilaterally indicated the rescission of contract that is an obvious violation of its contractual obligation of 'progressive management involvement'...