Recognizing and Minimizing Tort

Kevin:
The contract with Citizen-Schwarz AG (C-S) is now eight months in and during the past couple of months Span Systems has fallen behind schedule. In order to maintain the aforementioned schedule there has been some issues with the quality of Span’s deliverables. Leon Ther the IT Outsourcing Director of C-S has written me in regards to the current problems he has seen over the past two months. Ther is furious over the fact Span has fallen behind schedule as well as the quality of the programming that has been delivered, it has been found that several severe “bugs” exist. Currently Ther is requesting that Span turns over all unfinished code and the rescission of the contract to date. With full knowledge that the loss of C-S will not be acceptable I believe we must review the contract, identify potential risks within and begin to minimize our liability so Span can turn this around and keep C-S as a client.
In reviewing the situation Span can begin to identify the varied risks as well as potential opportunities available, this information will also help in future contracts as well. Since the beginning of the contract eight months ago there have been several delays due in part to extraordinary, excessive changes requested by C-S. Within the contract Span agreed to ordinary change requests, I have been made aware of the fact that many of the changes thus far have been anything but ordinary. These changes as well as a recent change in project structure have given way to the current problems between both parties ability to meet the deadlines originally set forth in the contract. Contracts are very important to daily business function and are a necessity when dealing with legal matters, although they are still open to interpretation by legal standards. When a contract is vague it leaves companies open to lawsuits and many conflicts can arise between the contracted parties (Moore, 1999). Span can learn from the issues with C-S and can apply this new insight to future...