Disputes between customers and suppliers, which are not mutually resolved, might end up in a courtroom. The decision to present an action before a judge should be considered carefully. Bringing a case to court can be costly and not all parties agree with the outcome. A judge’s decision is made based on the interpretation of the contract language; therefore, ambiguously worded terms should be carefully reviewed before signing a contract. The simulation has provided a sample of contract language ambiguity and a dispute that followed. The scenario below will provide an account of how Span Systems and Citizen-Schwarz AG (CS) presents their challenges and resolution surrounding the performance, change control, communications and reporting, project structure, and the dispute resolution of their contractual agreement. Both Span Systems and Citizen-Schwarz AG interpreted the performance of the agreement differently (University of Phoenix, 2002).
Performance
Span Systems and Citizen-Schwartz AG have engaged into a contract, in the amount of Six Million Dollars ($6M), which requires Span Systems to create a software program, which will be wholly owned by Citizen-Schwarz AG. The original contract language was somewhat ambiguous in defining the acceptable terms of the performance of the engagement. The performance, or lack thereof, by one party becomes very important in determining the rights and duties under the contracts (Corley, Morehead, Reed, & Shedd, 2005). The only way for each party to understand if they are meeting the performance criteria of the agreement is to provide specific definitions related to each performance area of the contract. Less ambiguous language will also provide an easier time of mediating a breach, if it becomes necessary (U ...