A Worksheet on Contract Management

Scenario Summary:

This scenario covers a contract difference state of affairs. The contract in inquiry is an understanding between Systems Inc. and Big Bank. Please reexamine the contract located in Scenario Summary of the “You Decide” page to familiarise yourself with the particulars of the contract.

Your Role/Assignment:

You are the director of a big information processing undertaking. Your company, Systems Inc. , worked really difficult to obtain a contract with Big Bank to make the information transitions from their recent acquisition, Small Bank. The bank met with several companies to discourse who would make the best work on the contract. During your meeting with Big Bank, you told them that you had “never missed a transition deadline.” At the clip, your company had ne’er missed a transition deadline, but the company had merely done three transitions. You besides told them that “your information processing systems were the fastest around.” After months of dialogue, Big Bank signed the contract. The President of Big Bank said, “We like fast, and you cats are fast. We choose you. ”

You started work on the informations transition instantly ( in front of contract ) . Harmonizing to the contract, your squad was responsible for guaranting that the new bank’s informations was converted to Big Bank’s information processing system. The contract involved six big transitions. The first involved change overing Big Bank’s savings histories ; the 2nd, its look intoing histories ; the 3rd, its investing portfolio ; the 4th, its recognition card operations ; the fifth, its mortgage portfolios ; and the 6th, its big concern loans. Your squad completed four of the six transitions without a job. The 5th undertaking, the largest and most of import, has encountered legion jobs. Some jobs have been based on forces issues on your portion and other issues have been based on the bank’s failure to supply you with necessary information. One issue resulted when the transition was delayed for over one hebdomad. The information to be converted was formatted otherwise than the bank’s old specifications provided. For that ground, the informations transition Fieldss needed to be changed. A proviso in the contract required your company to have the blessing of four persons before doing any alterations to the transition informations Fieldss, and one of those four people, Glenda Givealot, was out of the state making missional work in an country of the universe that did non hold cell phone response. Another issue arose when the transition was supposed to happen. Because of the alteration in the timeline, the transition agenda had to alter. The weekend the transition was rescheduled to happen, an ice storm struck the province where your informations treating computing machines were housed. Your installation lost electricity for three yearss, doing the transition to be delayed one time once more.


  1. Question: ( 17 points )

Can Big Bank’s President revoke the contract? Under what fortunes can a contract be rescinded by either party? What facts have to be alleged and proven? What is the consequence of a contract that is rescinded? Solution:

At this point the contract has been fulfilled for more than half of the services requested.I don’t believe at this point Big Bank can revoke the contract.The contract is in topographic point and in order to revoke the contract on of the following would hold to hold occurred prior to the contract being accepted.

1. Oversight of clip. The failure of the offeree to react within a sensible clip ( e.g. , 30 yearss ) will do an offer to sink.

2. Death of either party. The decease of the agent of a corporation, nevertheless, will non end the contract, because in most instances the company will go on.

3. Destruction of the capable affair. If the point contracted for can non be replaced because of an accident or happening that is non the mistake of the offerer, the offer may be terminated.

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4. Rejection by the offeree. If the offeree does non accept the offer, it is terminated.

5. Revocation by the offerer. If the offerer withdraws the offer before the offeree accepts it, the offer is terminated.

Since the contract has already been accepted by both parties at that place would necessitate to be more than merely to revoke of the contract.In this instance in order for the contract to be cancelled at that place would necessitate to be several issues that would hold to be proven in order for Big Bank to end the contract.If this contract were to be rescinded at that place would necessitate to be several legal issues worked out since the undertaking was more than half completed.

Kubasek ; Brennan ; Browne, N. ( 2011 ) . The Legal Environment of Business

  1. Question: ( 16 points )

Large Bank’s President besides threatens legal action. What possible causes of action could you anticipate him conveying in tribunal? Would he be successful? Why or why non? What arguments could Systems Inc. raises in its defence? What are Large Bank’s potency amendss? Solution: Large Bank’s president may believe that he has a right to convey legal action against the systems company nevertheless he would most likely non be successful.Most probably the Big Bank president would seek to state that the system’s company did non keep up their terminal of the contract and hence their criterion was lacking.He would try to dispatch the footings due to performance.I don’t think in this instance Big Bank would be successful. The contract states a batch of things that Big Bank is responsible for and what System ‘s Inc. will non be apt for. With this as the president decided he wanted to revoke the contract after the ice storm, subdivision 8a provinces that “ System’s Inc. shall non be responsible for any failure in supplying the Services, any holds in processing, or any failure or hold in the bringing of any Reports that may be caused, in whole or in portion, by work stoppages, lockouts, public violences, epidemics, governmental actions or ordinances, natural catastrophe, fire, inclement conditions, Acts of the Apostless of God, computing machine dislocation or failure, communications failure, breaks in telephone or electrical service, messenger ‘s failure to seasonably present, or any other causes beyond its sensible control. ” With that in head the president still had no ground to revoke. As the contract continues with duties of Big Bank, they had to supply informations to Systems Inc. in a timely affair at which they did non. System ‘s Inc. , at this clip could hold charged the bank more for the holds for the informations that they needed.

Here is the portion of the contract that I like that will besides help is because System ‘s Inc. was waiting on informations from the bank. Section 2b last statement “ System’s Inc. militias the right to prorogue transition of Big Bank ‘s information files if Big Bank is late in presenting its transition input information or if any other fortunes arise that might endanger the successful completion of Big Bank ‘s information transition or the processing of the Big Bank ‘s undermentioned twenty-four hours ‘s minutess for any other clients of Systems Inc. ” Because of the lateness of bank, I think System’s Inc. were good with the contract to hold holds in mark offs for doing any alterations.

  1. Question: ( 17 points )

Review the facts provided and the sample contract. What commissariats of the contract could you mention to back up an statement that it is non in Big Bank’s best involvement to revoke the contract? What facts could you mention to back up an statement that Big Bank be responsible for some of these issues and/or non in conformity with the contract? Solution:

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“Businesspeople need to see several factors before they rush to register a case: ( 1 ) the likeliness of the suit’s succeeding ; ( 2 ) whether they wish to keep a concern relationship with the transgressing party ; ( 3 ) the possibility of interceding the difference through a 3rd party, therefore avoiding judicial proceeding ; and ( 4 ) the cost of arbitration or judicial proceeding as opposed to the grosss to be gained from implementing the contract” .

In this instance Big Bank had several issues that occurred on their terminal as well.The bank’s failure to supply the company with necessary information started the hold. Another issue resulted when the transition was delayed for over one hebdomad due to the information being formatted falsely on the bank’s end.Also there was a proviso in the contract required your company to have four people’s blessing before doing any alterations to the transition informations Fieldss, and one of those four people, Glenda Givealot, was out of the state making missional work in an country of the universe that did non hold cell phone reception.All of these grounds led there to be concerns with Big Bank desiring to revoke the contract.

Kubasek ; Brennan ; Browne, N. ( 2011 ) . The Legal Environment of Business [ VitalSouce bookshelf version ]

  1. Question: ( 16 points )

In this state of affairs amicable declaration of jobs is greatly preferred by your company. Would this be true in all contract differences? In what state of affairss would you make up one’s mind to litigate? Why would you make up one’s mind to travel to judicial proceeding instead than try to make an amicable declaration? Solution: In all contract the thought is to decide the state of affairs amicable. This normally involves some spring and take. Largely, there is a batch of giving than take. For several grounds I would merely travel straight into judicial proceeding, one is that the president has threaten to action without even understanding the state of affairs at manus. Because both parties are at mistake with some of the issues entirely with a hot headed president from the bank, deciding this amicably will non work.The unforeseeable storm was the frost on the bar. There seems to be breaches of the contract from each party.Planning from the company was non done in an orderly state of affairs. All state of affairss should hold been discussed and eventuality programs put into topographic point. I call it the “ what if ” program. In any state of affairs when it comes to the demand of paperss necessitating to signed, there should ever be another individual left or a back-up individual for each authorize individual forsigning if one another is non available. On the bank side, information should hold flowed flawlessly without any perturbation. Beingthey are the bank and handle 1000000s of financess on a day-to-day bases, they should n’t hold wanted any type of hold in change overing information.

  1. Question: ( 17 points )

There are 3 types of contract public presentation: 1 ) complete public presentation ; 2 ) significant public presentation ; and 3 ) stuff breach. Describe the differences ( and similarities ) among the three, and explicate some of the legal branchings for one or more of these types of public presentations. ( For illustration, what happens if one party performs wholly but the other party performs merely well? ) Give illustrations from outside readings or experiences in your calling or personal concern life. Solution:

Complete V. SignificantPerformance: When a party fails to wholly execute his or her contractual responsibilities, the inquiry arises whether the public presentation was however sufficiently significanttodispatch the contractual duty.If so, so the party is said to hold well performed. Substantialperformance must non change greatly from that promised in the contract, and must make wellthe same benefitsas those promised.

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If one party well performs, the other party’s responsibility to execute remains absolute — although the other party may be entitled to retrieve amendss, if any, for the well executing party’s failure to to the full execute.

If a party fails to either well or to the full execute, the other party’s staying duties, if any, under the contract are discharged.

Timefor Performance: If no clip is stated in the contract, public presentation is due within a sensible clip.

A breach ofcontractoccurs “ when one party fails to execute their responsibilities as specified in a contract.A contract may be breached by one or both parties.A breach of contract can ensue in legal effects for the breaching party.A breach may either be material or non-material depending on the nature of the breach.

Gabrielle Hollingsworth. ( 2014 ) .Material Breach of Contract. Retrieved from: hypertext transfer protocol: //www.legalmatch.com/law-library/article/material-breach-of-contract.html

  1. Question: ( 16 points )

What are the two most of import constructs from this exercising that will assist you in future contract dialogues?


What I would acquire out of this for myself is to extinguish all possibilities of a gray country. Most contracts have a gray country of linguistic communication that can be manipulated by the client because the linguistic communication is non clear plenty. I see this everyday within my organisation how clients get out of paying bills because they were diffident about their contracts. Making certain that the linguistic communication is clear and understood will extinguish any degree of misconstruing. In other words have an air tight contract.

The usage of eventuality be aftering whereas sing Nothing of all time goes 100 % swimmingly or perfect, there needs to be specific, elaborate parametric quantities to any understanding saying precisely what will go on “ if ” . Any great undertaking director will state you, before any undertaking can get down you must fix for the worst. Try to see into the hereafter of the undertaking as to what can travel incorrect. If you can see those before you of all time begin you can be after now for how you will manage it so. Same thing goes for this… you have specific undertakings that need to acquire done in a specific sum of clip. Determine worst instance scenario and set steps in topographic point to decide them. Make certain they are specific and written into the contract so that there is every bit small gray country as possible.

The 2nd thing I would acquire out of this would be to make my best to de-escalate the issues before they become unmanageable fires that can non be put out. More so to non allow ongoing oversight in undertakings becomesogreat that it will be my organisation a contract. This can be done without “ giving off the farm ” . Besides, to ever happen a manner to acquire the client semen to an apprehension before heading to any extenuation or before any judicial proceeding for case are threaten.

Do n’t presume anything in contracts, when concern and money are at manus, you must hold on everything and have it detailed out anterior to get downing the contractual relationship. Particularly when two concerns who have ne’er worked before enter into a contract together, there is much that can acquire in the manner of the contract being completed without a hiccough. Do n’t presume logic and ground will predominate… particularly if covering with different civilizations that may hold really different precedences. Write everything down!