Recognizing Contract Risk and Opportunities Memo

Recognizing Contract Risk and Opportunities Memo

TO:                   Citizen - Schwarz AG (C-S)
FROM:             Project Manager, Span Systems
DATE:              April 28, 2011
SUBJECT:       Recognizing Contract Risk and Opportunities
CC:                   Span Systems Board of Directors
Purpose:
In today’s markets, businesses need methods by which to identify contractual risks, insure liabilities are lessened, and remedies to these threats exploited. Using information from the week-3 contract creation and management simulation, an outlined memo is presented.   The author will identify the legal risk and opportunities of Span Systems (Span) and Citizens-Schwarz (C-S) regarding a business contract entered into by the two parties.   This memo will also address how our managers can avoid contract risk, minimize liabilities, benefit from opportunities, and weigh alternatives presented to resolve these issues.   This method will be employed as a means to save the contracted business relationship and improve the current contract by incorporating the necessary amendments that will satisfy both businesses.
Explanation of problem:
Span currently holds a one-year contract, valued at six million dollars with C-S, but is engaged in a heated dispute that threatens the contract. Additionally, Span is seeking to secure a larger contract with C-S that hinges on their performance on the current contract.

Legal Risks and Opportunities:
Whenever businesses agree to enter into a bilateral contract, potential legal risks to both parties exist.   The primary dispute between our company Span, and C-S in this situation involves product quality and the schedules of deliverables.   The legal risks occurred from the original contract between Span and C-S.  
The contract clauses that follow identify an obvious breach of the contract:  Substantial Performance of Contract, Internal Escalation Procedure for Disputes, Requirements Change, and Communication and Reporting.  ...