BUSINESS MEMO

Business Memo

Business Memo

To: XYZ

From: ABC

Date: 13th October 2009

Subject: Legal Risk in Contract Formation

When going through the simulation I found for legal issues. The first topic is that C-S has claimed all of the cipher be turned over to them and that the agreement be terminated immediately. From their point of view, Span has only completed 40% of the project to their satisfaction; therefore, they are within their rights to terminate the contract based upon the 50% clause that was included in the contract. This clause states that neither company can break or change the contract subsequent to 50% of the consideration being completed by either party. Span believes that 60% of the project has been delivered, due to the amount of code that has been delivered and the time that they have been involved in the project. Therefore, their stance is that C-S is in breach of contract because more the 50% of the consideration has been delivered (University of Phoenix Online, 2002).

The second lawful topic is the termination of the agreement before the acquiesced upon argument tenacity method was followed. The contract states that before any formal proceedings are filed, the party believing itself as wrongly done shall call for progressive management involvement to negotiate the dispute and search for alternative solutions.

LeonTher, the negotiator for C-S obviously violated this clause in the contract when he demanded the immediate termination of the contract and that all codes should be handed over to C-S so they can find an alternative company to be able to finish the project (University of Phoenix Online, 2002).

The third legal issue is the breaching of the contract due to the fact that requirement changes are making it impossible to complete the project on time. The project has expanded from its original design as seen by the Metrics dashboard of the simulation. The project has grown from 940 function points to 1015. Ordinary changes may be interpreted as replacing or changing existing requirements to improve functionality. It appears that the change requests have gone beyond the agreement and the adding of function points to the already requirements made. Therefore, this is making it difficult for Span to meet the deadlines set in the original contract negotiations (University of Phoenix Online, 2002).

The fourth legal issue is the breach of contract based upon C-S's decision to make changes in the project management team, which slowed down Span's ability to get approval of software modules before moving on with new code. Since this happened several months previous to the dispute and appears to have been rectified, it may have put the project behind enough that the timeline for the entire project was changed (University of Phoenix Online, 2002).

There was also some indication that the intellectual property rights of Span Corporation may have been violated when C-S shared modules of code with a competing company. However, this was declared to be a rumour later on in the simulation, therefore, the author did not believe that this constituted an actual legal ...