Recognizing Contract Risk and Opportunities

            After completing the Contract Creation and Management simulation, the following written report will identify the present legal issues and note the legal principles that apply to each issue. By using the legal principles presented in the readings, (University of Phoenix, 2014).

Present the specific risks and opportunities a Puerto Rican company in a similar situation may face when doing business, and evaluating the measures a manager may take to avoid those risks, minimize liabilities, and benefit from the opportunities found in the simulation.

		Puerto Rican Company
Simulation Issue Summary / Liabilities	Justification/Explanation for the Issue	Opportunities	Risks
Asserted rescission in contract based on:  low quality deliverables, and behind schedules. ·         Breach of Contract ·         Deadlines/Timelines ·         Budgeting The client allegedly disclosed privileged and codified information to a third party. ·         confidentiality agreement ·         secrecy agreement ·         non-disclosure The client allegedly contacted an Indian company as a backup plan before the rescission of contract with the current service provider	Since the client requirements have grown disproportionally, then is a difficult to accommodate within earlier budget and timelines. The review times affected due to changes in project management structure. The client guaranteed by a written notice, that there is no data disclosure to any third party.	The service provider can claim the total payment of the full contracted quantity according to the Puerto Rico Code of Obligations Art. 1051. Cumplimiento a costa del obligado; cosa mal hecha se deshará.(31 L.P.R.A. sec. 3015) "If I have to do something does not do, he is sent to run at their expense. This same shall if so be contrary to the tenor of the obligation. Moreover it may be ordered to dispose wrongdoing." Because the client was negligent in failing to notify the findings of delay time, has liability arising from negligence as prescribed by the Puerto Rico Code of Obligations Art. 1056. Responsabilidad procedente de negligencia.(31 L.P.R.A. sec. 3020 "The responsibility that comes from neglect is equally required in fulfilling all the obligations, but may be moderated by the courts as appropriate."	If the customer does not cancel the contract, they could require the remaining work to be completed without additional cost to them. Otherwise, the expenses are covered by the provider, as determined by the Puerto Rico Code of Obligations Art. 1049. Entrega de cosa determinada o indeterminada; responsabilidad mientras se efectúa la entrega.(31 L.P.R.A. sec. 3013) "When it is to be delivered a certain thing, the creditor, the right under the [31 LPRA sec. 3018] of this Code, may compel the debtor to make the delivery. If the thing be indeterminate or generic, he may ask that the obligation be fulfilled at the expense of the debtor. If the obligor is delinquent constitutes, or is committed to delivering the same thing to two or more different people, your account will be acts of God until the delivery is made. "

A manager can take the following measures to deal and avoid the above mentioned liabilities by:

Simulation Issue Summary / Liabilities	Measures to avoid liabilities
Asserted rescission in contract based on:  low quality deliverables, and behind schedules. ·         Breach of Contract ·         Deadlines/Timelines ·         Budgeting (University of Phoenix, 2014)	Keep track of deliverables using platforms like Microsoft Project to manage deadlines according to the terms of the contract. This also avoids additional costs related to payroll expenses on account of delay and legal expenses if the customer violates the contract to cancel (Cheeseman, 2010). If the threat of losing the contract, the manager must prove that the injury comes from an outside agency, for example, that the failure is due to a fortuitous event or force majeure.
The client allegedly disclosed privileged and codified information to a third party. ·         confidentiality agreement ·         secrecy agreement ·         non-disclosure (University of Phoenix, 2014)	Businesses use confidentiality agreements to protect their products, patents and trademarks to the information about the secret techniques and use of materials not leak to competitors or the public. Particularly in technology. If a manager suspects that the client is violating this clause of the contract, the manager should take precautionary measures to prevent the court that the client continue further efforts. This first phase was carried out to establish that a violation of the confidentiality agreement has been carried out and establish that the party making the application has experienced an "irreparable injury",  (Cheeseman, 2010).  This is significant because demonstrate "irreparable damage" is the main provision on demand of the confidentiality agreement is based. Most agreements include language indicating that a violation automatically result in irreparable damage.
The client allegedly contacted an Indian company as a backup plan before the rescission of contract with the current service provider. (University of Phoenix, 2014)	You cannot prevent a client use second opinions, but with the signing of a Confidentiality Agreements or Covenants, inform customers of the guidelines to follow in the treatment of confidential information, obligations and limits, may, with this measure to restrict certain practices that occur in the business world (example: carried databases or confidential or proprietary information, new product developments, etc ... at the time of leaving the work place), or if otherwise, have a document that can serve as evidence in trial that the obligation of confidentiality and secrecy is explicitly stated, and customer knowledge of such an obligation, (Cheeseman, 2010).

 A manager can benefit the Company by using the found opportunities like:

            When you experience this kind of legal situations, a manager can take advantage of the precedent for establishing the technical or organizational means to protect confidential information regardless of the medium in which it is treated or stored (Jennings, 2006).
            So you should set the following protective measures:

•         Limit access to confidential information . Example: to allow access to such information only to personnel because of their position or duties is required to access this information, not allowing such access to other staff.

•         Establish technical measures allowing visualization or treatment of confidential information (example, use of passwords for access to documents , encryption , etc ...) .

•         Keep / Store confidential paper documents in cabinets that are closed or locked safes , to which only authorized persons have access .

•         Perform backup to prevent the loss of confidential or sensitive information in disaster , keeping a copy off of the main facilities of the company.

            Finally , in relation to the protection of confidential information within the inner area of ​​the business, it should be noted that the provision of certain services accessed confidential information of others , having thus specifies an obligation of confidentiality respect to that third company, obligation of confidentiality extends to workers seeking this information , and therefore , must be expressly regulated internally, to avoid potential liabilities arising from the negligence of any employee of the company.

Identify specific legal principles each risk or opportunity is Governed by and relate the specific Measures May managers take to minimize legal risk or Opportunities to Realize These legal principles .

            During the creation of a contract , it is essential to consider what are the risks or disadvantages that this may represent the parties to be accepting it, (Jennings, 2006). Each clause must be shown clearly and specifically , to misinterpretations that can generate legal conflicts are avoided. However, in many cases it has been as though the terms seem to be clear , they are confusing and this is where differences arise . What factors should be considered when presenting and accepting a business contract ? Jennings (2006 ) , indicates that the contracts have been necessary in the business area , from which emerged the first businesses . Given this, it is necessary to take into account that each clause must have features that are attractive to all parties involved in the business.
            A manager must know and identify the criteria for a contract to be enforceable . The manager must know what are those elements that are (Jennings, 2006) : capacity , consent or agreement , the subject and the cause. The agreement or consent explains that there must be an agreement between both parties. The cause is understood the cause for which is held the contract. The contractual capacity of the parties explained that they cannot be applied against parties that lacked contractual capacity when they entered into a contract. After learning these parts , you should compare his contract situation with the client to determine how to apply the legal principles that apply.
Evaluate the alternatives presented to That Were resolve the problems in the simulation . Explain Which approach is best for Puerto Rican businesses and why .
            Contracts have been necessary in business since the business began . These allow companies have money, supplies and services. Contracts are private business law , the parties develop their own set of laws through their contracts. These by-laws may be applied by the courts in all states (Jennings , 2006). It is very important to read and understand a contract before accepting its terms. During the negotiation process can make changes or add , but once the contract is signed and agreed the deal is closed .
            The Puerto Rico Civil Code Section 1213 establishes the requirements of the contract (31 LPRA 3391 sec . ) But there is no contract when the following requirements: 1 ) consent of the parties, 2) some object that is subject of the contract and 3) Cause of the obligation which is established.
            Simulation on Creation and Management Contract serves to highlight the importance of reviewing all current and new trade agreements , to avoid misunderstandings. Should review and consider the contract before reaching an agreement to ensure that the contract is beneficial to both parties .
            Span System and Citizen- Schwarz AG signed a one- year, six million dollars , however , the agreements stipulated in the contract have not been able to meet as scheduled (University of Phoenix, 2014) . Mr. Leon Ther , one of the most influential negotiators Citizen- Schwarz AG, has threatened to cancel the contract because it understands that it is unacceptable product quality . After several meetings of negotiations failed to amend certain terms of the contract and agree . This agreement was of great benefit to both parties and that litigation was avoided in the courts, which had been one extremely expensive .

References

Cheeseman, Henry R. (2010) Business Law, Legal Environment, Online Commerce, Business

Ethics, and Interrnational Issues, Seventh Edition Chapter 1, Pearson Education, Inc., publishing as Prentice-Hall    

Jennings, Marianne M. Business Ethics: Case Studies and Selected Readings. Cincinnati: West,

            3rd ed., 2006.

Puerto Rico Civil Code Art. 1213 Requirements of Contracting (31 L.P.R.A. sec. 3391)

Puerto Rico Code of Obligations Art. 1051. Cumplimiento a costa del obligado; sobrecosa mal hecha se 

             deshará.(31 L.P.R.A. sec. 3015)

University of Phoenix, USA - Contract Creation and Management Simulation,

www.phoenix.edu , Retrieved on January 25, 2014