This memo is being created to address the legal risks that have arisen between Span Systems and Citizen-Schwarz AG, and to address alternatives that may be used to minimize these risks. The risks that were presented were Breach of Contract, Amending the Contract, and Ambiguity of Contracts. The will be addressed as they are noted above.
Breach of Contract:Span Systems has a couple of items they could dispute with Citizen-Schwarz. Under Breach of Contract Citizen-Schwarz first breached the contract under the communication and reporting any changes of project management structure. Those breaches are the main reason for the delay in product delivery from Span System and have led to the slip in staying on schedule.
The next breach was under the requirements change section. Span System that the originally agreed upon requirements for changes to user and systems have been surpassed. Citizen-Schwarz has even agreed that their changes have been unacceptable as they had presumed that they were still adhering to the sign off system where they have not seen any major increases.
The final breach is the substantial performance where supposedly Span Systems had finished 60% of the project and Citizen-Schwarz claims that only 40% of the project has been completed. Span Systems will debate that more of the project has been completed however the focus should be on Citizen-Schwarz's efforts to help finish the project and not on the percentage of work completed.
One issue that should also be considered is the issue in which Citizen-Schwarz cannot force Span Systems to transfer all or part of the codes finished or unfinished as there are still outstanding payments. This means the codes remain the property of Spans System until they have received all payments for work completed.
Amending the Contract:Span System suggests that the formalized resolution clause...