1.

Can Big Banks president rescind the contract? Under what circumstances can a contract be rescinded by either party? What facts have to be alleged and proven? What is the result of a contract that is rescinded? Yes, based on that there was never a meeting of the minds on essential terms. A contract can be rescinded by the parties' mutual agreement or unilaterally by a party upon proper grounds.. In turn, an "action for rescission" is actually a suit to enforce the rescission by seeking appropriate relief, i.e., a return to the status quo, based upon rescission. 1 Systems Inc. met the conversions deadlines on their previous conversions. 2 Systems Inc. has the fastest data processing, confirmed by the President of Big Bank. 3 The mortgage portfolio conversion was delayed 10 days. 4 That one of the people who has to sign-off on changes was out of the country and out of contact. Rescission is a remedy that disaffirms the contract. The remedy assumes the contract was properly formed, but effectively extinguishes the contract ab initio as though it never came into existence; and its terms cease to be enforceable. Yes, Big Banks president can rescind the contract. The circumstances that makes the contract to be rescinded by either parties are as follows: One party to a contract can rescind it because of substantial nonperformance or breach by the other party When time is of the essence in a contract, failure to perform within the time stipulated is a ground for rescission When one party to a contract abandons it and refuses further performance or her conduct shows that she is repudiating the contract, the other party is entitled to rescission. By the parties mutual agreement or unilaterally by a party upon proper grounds. An unconditional notice by one party that he does not intend to perform a contract is a ground for rescission by the other party. In order to justify rescission, the refusal must be absolute and unconditional

Facts that have to be alleged and proven are: As Systems Inc done their work and deadline perfectly in previous assignment. It was the fastest data processing, which was confirmed by the President of Big Bank. The decision maker who need to sign and decide on any new additions in the project was out of station.

Rescission is a remedy that disaffirms the contract.No Arbitrary right exists to rescind a contract. An executory contract that is Voidable can be rescinded on the grounds of Fraud, mistake, or incapacity. A mutual mistake concerning a material fact entitles the party affected by the mistake to rescind the contract, unless the contract has already been completed and rescission would be an injustice to the other party. Rescission can also be allowed even for a unilateral, or onesided, mistake in order to prevent an Unjust Enrichment of the other party. On rescission, the aggrieved party can recover the money he or she has paid or the property he or she has delivered under the contract. What is the result of a contract that is rescinded? Rescission is a remedy that disaffirms the contract. The remedy assumes the contract was properly formed, but effectively extinguishes the contract ab initio as though it never came into existence; and its terms cease to be enforceable.

Big Banks president also threatens legal action. What potential causes of action could you foresee him bringing in court? Would he be successful? Why or why not? What arguments could Systems Inc. raise in its defense? What are Big Banks potential damages?Big Banks President also threatens legal action. What potential causes of action
could you foresee him bringing in court? Breach of contract based on performance Would he be successful? Why or why not?

What arguments could Systems Inc. raises in its defense? That Big Bank did not provide all the necessary information and proper planning for changes to conversion fields, and are out of compliance with the contract. What are Big Banks potential damages? There could be monetary damages as well as a hit on their reputation.

Review the facts provided and the sample contract. What provisions of the contract could you cite to support an argument that it is not in Big Banks best interest to rescind the contract? What facts could you cite to support an argument that Big Bank be responsible for some of these issues and/or not in compliance with the contract?
3 ans: Addition to the argument that it is not in Big Banks best interest to rescind the contract, limitation of Liability which is in Paragraph 8a. i.e Big Bank is under no duty to make any payments to Systems Inc. for any period exceeding five consecutive business days in which the Services are not performed by Systems Inc. as a result of a natural disaster or other phenomenon mentioned above. Which includes weather conditions like ice storm shut down facility for 3 days, interruptions in telephone or electrical services. This includes: inclement weather, interruptions in telephone or electrical service, therefore, Systems Inc. is not responsible for the delay and Big Bank would still have to honor the contract. Additional facts that could support the argument that Big Bank responsible issues not compliance with the contract are from paragraph 2b under Conversion Of Big Banks i.e, Systems Inc. reserves the right to postpone conversion of Big Bank's information files if Big Bank is late in delivering its conversion input information. 4. In this situation amicable resolution of problems is greatly preferred by your company. Would this be true in all contract disputes? No, sometimes the two parties just cant work things out, or there may have been gross negligence on the part of one party. In what situations and why would you decide to move to litigation over amicable resolution? There are countless reasons why litigation commences. Some of the manageable reasons are: Stubbornness/Pride, Lack of Knowledge/Understanding, Passion/Emotions, Failure to Communicate, and Greed. Big banks President was angry so he could go to court because of emotions running high, etc. 5. There are 3 types of contract performance: complete, substantial and material breach. Describe the differences (and similarities) among the three, and explain some of the legal ramifications for one or more of these types of performances. (For example, what happens if one party performs completely but the other party performs only substantially?) Give examples from outside readings or experiences in your career or personal business life.

6. What are the two most important concepts from this exercise that will help you in future contract negotiations?

especially one that is written and enforceable by law. For which an agreement has to be in writing and documented about rights and responsibilities. When any contract is begins, key actions are as follows:
By this case I could understand that contract is an agreement between two or more parties, Clear Objective Identify the sources and nature of uncertainities to achive the objective. Defining and assessing Risks and making a decision about appropriate course of action. Communication Listen to the client and understand their expectations Enact as other party and understand limitations

A contract is a relationship between, generally, a buyer and seller defined by an agreement about their respective rights and responsibilities, a contract is also a document that describes such an agreement about those rights and responsibilities. In Phase I of the Contract Management Process, the pre-award phase, where the contract begins, the key actions are too: clearly state your objectives, identify the sources and nature of uncertainties about achieving those objectives, defining and assessing risks, and making a decision about an appropriate course of action. Therefore, the most important thing I feel in developing contracts is communication. Listen to you client, listen and understand their expectations, as the buyer, understand limitation, and follow through on obligations to make for a successful outcome. There must be clear and concise understanding of the Ts and Cs by both parties and well as a complete understanding of the deliverables and expectations, who is responsible for what and when. These actions go a long way in building trust, an important part of the client/supplier relations. Negotiations are about shifting risk, who will bear the most risk in a contract. So, it is important to be prepared, know your strengths and weaknesses as well as you opponents strengths and weaknesses, understand the objectives, what you hope to get out of the negotiation with minimum risk.

This group project covers a contract dispute situation. As a group, work through the following questions. Feel free to ask further questions in the thread of your group members, and answer your group members questions as well. The best work will be where all group members work together to get the questions answered. You will be graded on the quality of your posts, but points will be deducted if your answers are duplicates of your group members'. Take turns and build on posts. The questions below have more than one part within each of them so work through them together. Have fun with this! The main thing is that you learn from this exercise, along with creating some quality collaboration with your group. Read the Group Project under Course Home or the Assignments page for this week for the full grading rubric for this group project. Good luck!

Download and review the contract here. Your Role/Assignment You are the manager of a large data processing project. Your company, Systems Inc., worked very hard to obtain a contract with Big Bank to do their conversions from their recent acquisition, Small Bank. The bank met with several companies to discuss who would do the best work on the contract. During your meeting with Big Bank, you told them that you had never missed a conversion deadline. At the time, your company had never missed a conversion deadline, but the company had only done three conversions. You also told them that your data processing systems were the fastest around. After months of negotiation, Big Bank signed the contract. The president of Big Bank said, We like fast, and you guys are fast. We choose you." You started work on the data conversion immediately (ahead of contract). According to the contract, your team was responsible for ensuring that the new banks data were converted to Big Banks data processing system. The contract involved six large conversions. The first involved converting Big Banks savings accounts, the second its checking accounts, the third its investment portfolio, the fourth its credit card, the fifth its mortgage portfolios, and the six its large business loans. Your team completed four of the six conversions without a problem. The fifth task, the largest and most important, has encountered numerous problems. Some problems have been based on personnel issues on your part and other issues have been based on the banks failure to provide you with necessary information. One issue resulted when the conversion was delayed for over one week. The data to be converted were formatted differently than the banks previous specifications provided. For that reason, the data conversion fields needed to be changed. A provision in the contract required your company to receive four peoples approval before making any changes to the conversion data fields, and one of those four people, Glenda Givealot, was out of the country doing missionary work in an area of the world that did not have cell phone reception. Another issue resulted when the conversion was supposed to occur. Because of the change in the timeline, the conversion schedule had to change. The weekend the conversion was rescheduled to occur, an ice storm struck the state where your data processing computers were housed. Your facility lost electricity for 3 days and the conversion was delayed again until power could be restored.

KEYPLAYERS Big Bank President

The banks president, who is a known hothead, was furious. He called you after power was restored and yelled, We are rescinding this contract! He also threatened to take the case to court to seek damages. Scenario Summary

Systems Inc. President

Your company president wants this situation resolved amicably. He also wants to maintain the contract with the bank, as he sees the potential for a large amount of business with the bank in the future if this contract proves successful. Corporate counsel believes that the bank just needs to be shown that they are out of compliance with the contract just as we are and that both parties are to blame. He wants you to start negotiations with the bank to modify certain provisions of the contract to make expectations clearer.

YOUDECIDE Activity Below is the list of questions you should work together to answer in this thread. Feel free to come up with more to answer together if you need them. 1. 2. 3. Can Big Banks president rescind the contract? Under what circumstances can a contract be rescinded by either party? What facts have to be alleged and proven? What is the result of a contract that is rescinded? Big Banks president also threatens legal action. What potential causes of action could you foresee him bringing in court? Would he be successful? Why or why not? What arguments could Systems Inc. raise in its defense? What are Big Banks potential damages? Review the facts provided and the sample contract. What provisions of the contract could you cite to support an argument that it is not in Big Banks best interest to rescind the contract? What facts could you cite to support an argument that Big Bank be responsible for some of these issues and/or not in compliance with the contract? In this situation, amicable resolution of problems is greatly preferred by your company. Would this be true in all contract disputes? In what situations and why would you decide to move to litigation over amicable resolution? There are three types of contract performance: complete, substantial, and material breach. Describe the differences (and similarities) among the three, and explain some of the legal ramifications for one or more of these types of performances. (e.g., what happens if one party performs completely but the other party performs only substantially?) Give examples from outside readings or experiences in your career or personal business life.

4. 5.

6.

What are the two most important concepts from this exercise that will help you in future contract negotiations? (All students must answer this question for full credit in this project.)

Group C Project Thread Begin answering the project questions here.

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Tagged with: Acquisition Business Law business loans conversion data conversions Credit Card data conversion data processing system data processing systems Failure glenda investment portfolio Met missionary work mortgage portfolios negotiation personnel issues processing project Provision

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Can Big Banks President rescind the contract? Yes, based on that there was never a meeting of the minds on essential terms. Under what circumstances can a contract be rescinded by either party? A contract can be rescinded by the parties' mutual agreement or unilaterally by a party upon proper grounds.. In turn, an "action for rescission" is actually a suit to enforce the rescission by seeking appropriate relief, i.e., a return to the status quo, based upon rescission.