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Contract Creation And Management

In this simulation there was new clauses agreed upon by Citizen-Schwartz AG (software purchaser) and Span systems (software developer) in the contract that the two companies had entered into eight (8) months ago. C-S had made complaints that the multi-million dollar project was not being communicated properly. C-S had made the accusation that Span Systems had not been presenting updates on the software in a timely manner and that the code did not work each time it was presented. This led to a renegotiation of contract. In this paper both sides, Citizen-Schwartz AG and Span Systems, will present their sides of the renegotiation process.
The C-S Side of the Contract Clauses
There are only two of the clauses that will be beneficial to C-S. First the performance clause, Span has only completed 40% of the work promised by this date. The project is a one-year 6 million dollar project and in the eighth month only 40% of the work is complete. There are also quality issues. C-S has every right to rescind the contract and look elsewhere for software. If the project is not completed on time and with high quality expected, C-S will miss their deadline on release of the transition software in the market.
The second clause that would be beneficial to C-S is the intellectual property clause. This states that if C-S makes payments due they have the right to unrestricted, royalty-free, perpetual, irrevocable license to use the intellectual property created as part of this contract. C-S can decide to make the outstanding payment, get the intellectual property transferred and rescind the contract. At that time, C-S can hire another provider to complete the project on time and with the quality necessary to meet their own rollout of the software.
The other three clauses are detrimental to the C-S cause. The internal escalation clause is not ideal for C-S at this time because based on the data; C-S is in clear violation of this clause. C-S has not called for dispute negotiation....