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Legal Risk and Opportunity

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Recognize Contract Risk and Opportunity
Erica D. Thomas
LAW/531

June 7, 2010
Craige Harrison

Recognize Contract Risk and Opportunity

Contracts, no matter how large or complex, are promises negotiated between parties and should be written to ensure business agreements are fulfilled by both parties. Clarity of purpose is the hallmark of successful contracts because contracts are never free of interpretation (University of Phoenix, 2010) and poorly written contracts can ultimately result in breach of said contracts. In today’s market, businesses need ways to ensure that contract risk and liabilities are minimized and remedies to these risks are maximized and beneficial to all parties involved. In this memo, I will identify the legal risk and opportunities of Span Systems and Citizens-Schwarz (C-S), address how managers can avoid risk with contract issues, minimize liabilities, and benefit from additional opportunities identified.
Span Systems and Citizen-Schwarz AG (C-S) entered into a 1 year contract worth $6 million and if Span Systems can deliver on this contract our company stands to gain an even bigger contract for C-S’s e-CRM order, which is coming down the pipeline, however, in order for us to secure this contract our company must meet and exceed performance standards with the current contract. Currently our proceedings concerning our contract with Citizen-Schwarz (C-S) has not gone as planned and Leon Ther, C-S’s lead negotiator has demanded immediate transfer of all unfinished codes and threatened the rescission of the contract based on claims of deliverables low on quality and the project being behind schedule (University of Phoenix, 2010). Many of the claims Span Systems face have been the direct result of C-S’s change in project management and the unidentified scope of the project. Unfortunately, the contract signed by both parties included

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