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 softwar ...