In the last few months, Span Systems and C-S have been undergoing negotiations to address the issues brought forth by C-S regarding delivery and quality of goods. The relationship with C-S is beneficial for Span Systems to continue the working relationship with C-S. Below are the legal principles, prevention, resolutions, and management responsibilities of each issue affecting Span Systems and C-S: Issue 1: C-S claims that Span’s deliverables are low on quality and behind on schedule.
Legal Principle:Tender of Delivery [UCC2-301]; Transfer and delivery of goods to the buyer of lessee in accordance with a sales or lease contract (Cheeseman, pp. 310). Prevention: To ensure timely delivery and quality of goods through time-lines, check points, and audits. Span will benefit from these prevention techniques by systematically enforcing product quotas therefore adhering to delivery timelines. Resolutions:C-S representative collaboratively working with the Span team to ensure quality and timeliness to provide feedback to both Span Systems and C-S. Both Span and C-S will benefit from this because constructive feedback is given in a faster manner.
Issues and concerns may be addressed immediately. The simulation suggested various alternatives such as including a C-S representative to assist, advise, and monitor progress to address this issue effectively. The simulations also suggest increasing Span programmers to increase efficiency and productivity. Increasing human resources will increase quality and production of goods. Management:Management is responsible for creating timelines and deadlines while monitoring work progress to ensure that each portion of the project is completed on time and meets quality standards.
The simulation suggested that stationing a C-S representative at the work site is beneficial if the costs can be paid for by C-S. Issue 2: C-S had demanded immediate transfer of all unfinished codes. Legal Principle:Perfect Tender Rule [UCC2-601, 2a-509]; If the goods or tender of a delivery fall in any prospect to conform to the contract, the buyer may opt to either 1) to reject the whole shipment, 2) to accept the whole shipment, or 3) to reject part and accept part of the shipment (Cheeseman, pp. 311).
Legal Principle:Right to Reject Non-conforming Goods or Improperly Tendered Goods; Buyer or lessee rejects goods that do not conform to the contract (Chesseman, pp. 318). Legal Principle:Right to Cancel a Contract; Seller or lessor has the right to cancel a sales or lease contract if the buyer or lessee rejects or revokes acceptance of the goods, fails to pay for the goods, or repudiates the contract in part or in whole (Cheeseman, pp. 317). Prevention:To ensure the quality of all products, tests should be done at each step of the way as evidence of quality.
This prevention technique benefits Span by systematically adding a step toward procedures that check on the quality of goods. Resolutions:Provide weekly reports to C-S on product progress, issues, and concerns. This resolution benefits Span because it increases the communication between Span and C-S while keeping C-S updated on Span’s progress. Management:Management’s responsibility is to conduct regularly scheduled quality tests and provide reports to C-S regarding quality and timing. The simulation suggests that a C-S representative take a “hands on” role with production progress while updating C-S regularly.
This alternative meets The needs of both companies by provided quick feedback and regular updates. Issue 3: Ambiguous worded terms in the contract. Legal Principle:Ambiguous wording in contracts is open to interpretation. The contract Stated ambiguous words such as, “original. ” Legal Principle:Breach of contract under “Requirements Change” because the initial assessment of the project has changed requiring more and materials. Prevention:Contracts should use common words and include a glossary for a clear understanding of words and terms. This prevention benefits Span because it ensure that both parties understand the words and terms being used in the contract.
Resolutions:Negotiate contract terms between both parties addressing all issues, concerns, and questions. This resolution benefits Span because it encourages both parties to work together to address issues, concerns, and brainstorm on resolutions. Management:Management’s responsibility is to seek legal advice and work with C-S to ensure that both parties are adhering to the contract. Issue 4: C-S rescinds contract after 50% of the contract was completed. Legal Principle:C-S and Span have a signed contract that states that both parties agree that the contract cannot be canceled after 50% of the job is completed.
The signed contract is legally binding. The promissory estoppels prevents the withdrawal of a promise by a promisor (Cheeseman, 2010). Prevention:Both parties should review the contract and have mutual understanding of each organizations roles and responsibilities with the clarifications of legal counsel. Resolutions:Assure C-S of meeting production deadlines through increased human resources, communication, and involvement between the two companies. Management:Management is responsible for ensuring productivity is on task, there is open communication between companies, and come up with creative solutions to meet the needs of both companies.
Issue 5: Change in C-S Management Legal Principle:Breach of contract under “Communications and Reporting” due to delays in production because of management changes within C-S. Prevention:Span and C-S should pin-point one position for regularly scheduled updates. Resolutions:Span and C-S will work together to create a communication flowchart to indicate the proper procedures of communication and pinpoint one position or person as a point of contact. Management:Management’s responsibility is to ensure that the communication flowchart is being followed and there is consistent communication and updates between both companies.
The simulation suggests involvement from a C-S manager in the quality control committee. This idea creates responsibility for both parties and quick responses to any issues. Conclusion The issues, legal principles, preventions, resolutions, and management responsibilities stated above should assist Span with maintaining a good business relationship with C-S and preventing future crisis. Reference Cheeseman, H. R. (2010). Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues (7th ed. ). Upper Saddle River, NJ: Prentice Hall.