Liabilities

Managers always have the daunting task of taking control of all operations and taking on the responsibilities and problems that come along with the glory. Contract creation is a very detailed process in which each side is trying to maximize their benefits to assure that the deal is going to be profitable. The first rule of business should be to always deal with other reputable, established, and profitable organizations. By dealing with the right organizations, both parties will not be greedy and look in the best interest of creating a fair contract. The ideal situation would be to create as close to a monopoly as possible to assure that all contracts have to go through the organization. When other lines of business are looking to make contracts, the monopolistic organization can call all of the shots and choose the best offer. Another benefit is knowing that if any complication come up during the negotiation process, there is another company always willing to make another deal. A prime example to look at is Microsoft and their ability to distribute their products to major computer manufacturers in the most profitable situations. Microsoft, having all the top of the line software, is in the driver’s seat and can determine market price for their products. Contract ambiguities will cause continuous problems during contract years. It is essential for managers to hire qualified lawyers to read the contract language to make sure all verbiage is clear cut. Successful organizations do not have to take short cuts and cheat other organization because they know that their product will always be profitable. Contract ambiguities lead to lawsuits along with wasted time and money due to continuous court appearances. A manager can always prevent contract ambiguities by keeping contracts simple. There is no need for ambiguities if both parties are clear from the beginning what they expect out of the contract. Another way to prevent lawsuits on contract ambiguities is to assure that the contract profits both parties involved. When both parties are happy, it is least likely that either will try to disrupt the partnership. After contract negotiations are complete, there will continue to be disputes that must be fixed between parties. The managers of both parties are in charge of keeping disputes to a minimum and making sure that they are taking care of in a timely manner. A contract cannot be limited to the present because future changes could cause conflict. By planning for the future of the contract, it eliminates monetary disputes due to changes in costs and timelines. It is obviously not possible to plan for all future changes, but both organizations should brainstorm and plan for the obvious ones. Timeline changes can cause both companies to steer off course and create further complications to the contract. Both parties must be working at the same pace throughout the entire contract to be sure that each side is working at optimal levels. The performance clause in each contract is always up for interpretation. In this case, Citizen-Schwarz is making claim that Span has undelivered and has breached contract. Performance liability can be prevented by keeping on pace with the contract outlines and making sure the manager sticks to timelines. Due to the fact that performance contract is the most ambiguous section of the contract, it is important to exceed all contract guidelines. In this case, the project is more than 50% complete and therefore Span is able to argue that C-S should have made earlier complaints if they were not satisfied by the completed work. Another way to prevent performance disputes would be to create leeway in the original contract negotiations to account for timeline fallbacks. Requirements change is also relevant towards future planning in contracts. Both parties must be aware that system requirement will be on constant change and that setbacks could cause deadline problems. Managers can prevent such disputes over requirements change by suggesting future downfalls ahead of time to create an understanding between both parties. Over time, expectations also grow bigger and it is important to understand and remember the expectations at the origin of the contract. A prime example for requirements change is the technology industry in which product becomes out of date only months after being released. New phones and computers are constantly being released on the market and each model has a new feature superior to its previous model. Requirements change can also be prevented knowing that expectations will grow on a linear model and that production must also grow at the same pace. Communications and reporting problems arise when both parties have problems with keeping in contact with one another. Contract negotiations must outline scheduled status meeting to make sure that both parties are on pace with outlined timelines. The beginning stages of the contract should allow for more frequent meetings because the rhythm can be disrupted easier in early stages. It is also important not to overdo meetings because it could show signs that there is a lack of trust between parties. Communication and reporting problems can be prevented by managers by being organized and making all scheduled meetings. Each meeting should be productive and bring confidence to the parties in the negotiations. It is essential that both parties leave these scheduled meetings on the same page and in a pleasant manner. Intellectual property rights are controversial because they grant unrestricted usage and distribution of product. Span systems should have been aware of the ramifications of granting free reign over the product upon completion. Future disputes can be prevented by having managers control the usage of product. Instead of granting unrestricted usage, Span systems should have created a team to work closely with C-S to manage the product. Hind sight is always 20/20 but it is important to learn from mistakes so that future problems can be prevented. Overall, all liabilities can be prevented by communicating on a continuous basis and working with the right organizations. Trust is always earned and a successful contract term can create a long lasting relationship between organizations. Disputes cannot be 100% prevented so it is important to handle them in an efficient manner. Each organization should always consult with legal advice before making any rash decisions to prevent losses from escalating. The predominant alternative to contract liability is to keep organized and continue to keep all negotiations on timeline. When both parties in a contract are satisfied, they are no disp