Contract Legal Risks

Contract Legal Risks - Running head CONTRACT LEGAL RISKS...

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Running head: CONTRACT LEGAL RISKS AND OPPURTUNITIES 1 Contract Legal Risks and Opportunities Raven Robinson Law/531 03/14/2001 Marnita Robertson
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CONTRACT LEGAL RISKS AND OPPURTUNITIES 2 Contract Legal Risks and Opportunities This memo is in regards to the contract Span Systems and Citizen-Schwarz AG entered into. The contract serves as the leading cause of business disputes between the companies. The memo below will discuss the legal risks and opportunities revealed in the simulation, present strategies business managers can use to minimize risks and liabilities, and how they can benefit from those opportunities. According to (2010) Contract risk is the “Probability of loss arising from the buyer's reneging on the contract, as opposed to the buyer's inability to pay (para.). Failure to comply with the terms of a contract can create the probability of loss. According to (2010) Legal Risk is defined as “the risk from uncertainty due to legal actions or uncertainty in the applicability or interpretation of contracts, laws or regulations (para.).” Legal risk can occur when uncertainty appears within a business. Citizen-Schwarz AG and Span Systems entered into a contract to create custom banking software. The contract stated the guidelines of the arrangements made by the companies. The details on the contract included the quality of the deliverables, timelines for receipt of the products, communication procedures between both parties, a guideline for changes in the system requirements, dispute management procedures, and intellectual property rights. Both parties assumed many risks when they entered into this contract and the ambiguity of the contract highly increased those risks. We entered into this one year contract, worth 6 million dollars, with German Bank Citizen Swartz AG (C-S), projecting that we would gain an additional contract with Citizen-Schwarz‘s e-CRM order. Mr. Leon Thur is our contact at C-S and he was very displeased with the recent deliverables that we produced. He stated that the deliverables were late, were of poor quality, and during the testing “major bugs” appeared. Due to C-S’s
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CONTRACT LEGAL RISKS AND OPPURTUNITIES 3 dissatisfaction he has requested that we transfer all of the unfinished codes. In addition to that Mr. Thur requested to rescind the contract between us. As the project manager, I am aware of the
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This note was uploaded on 07/01/2011 for the course MBA LAW/531 taught by Professor Dr.quin during the Spring '11 term at University of Phoenix.

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Contract Legal Risks - Running head CONTRACT LEGAL RISKS...

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