Contract Creation and Management - Memo

Essay by mbowen33University, Master'sB, May 2009

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Contract Creation and Management- MEMO

Michelle Bowen

LAW/531 - Business Law

University of Phoenix Online

Jeff Herring

April 21, 2009

Contract Creation and Management- MEMO

When going through the simulation I found for legal issues. The first issue is that C-S has demanded all of the code be turned over to them and that the contract be terminated immediately. From their point of view, Span has only completed 40% of the project to their satisfaction; therefore, they are within their rights to terminate the contract based upon the 50% clause that was included in the contract. This clause states that neither company can break or change the contract subsequent to 50% of the consideration being completed by either party. Span believes that 60% of the project has been delivered, due to the amount of code that has been delivered and the time that they have been involved in the project.

Therefore, their stance is that C-S is in breach of contract because more the 50% of the consideration has been delivered (University of Phoenix Online, 2002).

The second legal issue is the termination of the contract before the agreed upon dispute resolution procedure was followed. The contract states that before any formal proceedings are filed, the party believing itself as wrongly done shall call for progressive management involvement to negotiate the dispute and search for alternative solutions. LeonTher, the negotiator for C-S obviously violated this clause in the contract when he demanded the immediate termination of the contract and that all codes should be handed over to C-S so they can find an alternative company to be able to finish the project (University of Phoenix Online, 2002).

The third legal issue is the breaching of the contract due to the fact that...