Business Law Term Paper (Term Paper Sample)

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Business Law
Introduction
Creation and management of contract are fundamental to all business practices. A contract is an agreement between two parties entering into a business for example, in the provision of goods or services or even oversees a certain project such as construction. An effective contract management outlines the conditions of the agreement as well as ways of computing the management fees. The automated management of a contract involves several stages namely; request, negotiation, approval execution, amendment, reporting, audit and renewal. To achieve an effective management of a contract, both parties involved have to build a good solid business relationship that meets their objectives and focuses on the results of the contract. Since contract management is crucial in any business relationship involving contracts and agreements, organizations have to take caution especially when forming contracts that boost their revenue. They should also establish terms and conditions of the contract. Analyzed in this paper is the DoD contract with an IT organization such as IBM. Following this, the paper will give detailed information regarding contract management focusing on the formation process of the contracts. The importance, elements and disputes involved in contracts will also be discussed.
Question 1
Negotiation, offer and acceptance are essential elements in the creation of any business contract (Gillies 143). Generally, these elements stipulate the terms that each party involved must abide. However, the process and duration of the negotiation process depends on the type of contract together with the responsibilities of both parties involved in the business. The negotiation process also provides for possible amendments in the future. We know that, a contract is valid or is formed when one party offers and the other party accepts. Offer and acceptance phase in this contract includes the analysis of the process of negotiation in order to determine whether the contract has been made. It also includes the terms of the contract (Gillies 143).
The offer in the above contract is the provision of technology services to the DoD. For the above contract to take place, the DoD must accept what the IBM offers to them. In this regard, the IBM must establish DoD security policies that meet the standards of delivery. For instance, according to the DoD policy and standards, the IBM must ensure that the decisions to participate, coordinate or gather information using the DoD internet services must stabilize the vulnerabilities and benefits incurred.in addition, the organization, must provide multipurpose communication assets that are easily manageable in order to prevent risks or threats to the national security and Federal agencies. Acceptance to the above offer will occurs through an act or statement (Gillies 143). The contract provider can withdraw the offer before the DoD accepts it. However, before doing this, the IBM in this case has to foster some communication with the DoD prior to the withdrawal (Gillies 143).
Question 2
The subject matter in the contract is providing IT capabilities to the department. Following the DoD’s struggle in maintaining the introduction of IT capabilities in the current information age, the department, in 2010, decided to develop a new approach to acquire IT capabilities. Changing the acquisition of IT is crucial to the department, as it will help accomplish war fighter missions and enable efficient operation (National Research Council 30). In addition, it will improve the existing accomplishments made by the department such as creating a Combined Investment Review Board (CIRB) that manage various programs such as Major Automated Information System (MAIS). However, the major priority was to have an acquisition process that aims to establish experienced, trained and knowledgeable IT work force (National Research Council 42).
Having contracts in any business relationship is important because it boosts the profitability and productivity of both parties. Both oral and written contract agreements are valid and acceptable. However, with the growth and complexity of the business world together with disputes and employment regulations, most companies today prefer to have written contract agreements. In today’s business environment, most companies use written contract documents to safeguard their resources. Outlined in the written document is the description or nature of the business relationship together with the rights purchased and retained. Contracts minimize risks as they are legally enforceable through the court. Also stipulated in the contract agreement is the payment date for any services provided or goods delivered.
Question 3
Clauses are important elements to consider in a contract. They include payment conditions, change orders, termination, indemnity, warranties, and limitation on liability. Under payment condition, the contractor should narrow the preconditions of receiving payment from the other organization. A business contract defines the circumstances in which the contractor receives change of orders which provide additional payment for the work done under various circumstances. Most business contracts include the termination clause that is either for cause or for convenience. The termination cause identifies how much money the service provider will be paid .upon the termination of the contract either for cause or for convenience. Indemnity is also an important clause either in a business or construction contract. The contractor is always indemnified from the damages that arise from several claims. In addition, the contractor requires warranting that the services provided are free from any defects.
Force Majeure is a French law doctrine recognized in the business world. It refers to the conditions beyond the control of parties engaging in a contract and which prevents these parties from performing events or obligations assumed under the contract for example destroying the subject matter of the contract (Schaffer, Filiberto & Beverley 154). For instance to avoid destroying the subject matter of the DoD contract that is obtaining information technology form an IT organization, the DoD requires the organization to adhere to some compliance laws regarding the delivery of services to them (Salamon 301). First, the organization must establish DoD policies and standards to guarantee their service delivery (Salamon 301).
Elements of this doctrine include externality, unpredictability and irresistibility. The defendant invoking the doctrine must be exempted from the events happening. However, the defendant is obligated to prepare for future events especially if they were initially predictable. Irresistibility in the Force Majeure explains the inevitability of the events of a business. Most importantly, Force Majeure either suspends and obligation or relieves one party from any obligation in the contract (Schaffer, Filiberto & Beverley 154).
Question 4
Terms contained in a contract could either be conditions or warranties (Taylor 105). Before a contract is valid, one party involved will always draft some statements in order to encourage and convince the other party to enter the contract. Business contracts contained various spoken or written terms. Some terms are of greater importance than others. From the example of contract given above; there are various conditions and warranties involved. For example, to deliver technology services to the DoD, the IBM is required to follow some principles and establish standards according to the DoD policies and standards of delivery. Warranty in this contract is included as an assurance that the technology equipment provided by the IBM are multipurpose communication assets which are easily manageable. In case of any break down in the assets within the warranty period, the IBM is ready to compensate for the losses incurred by the department.
Conditions are the more important terms while the warranties are the less important terms (Taylor 105).Without well-sated condition in the contract, one of the parties involved may not agree to the contract. Breaching or falsely making conditions entitles the wronged party to consider the contract as voidable. In case of warranties, the wronged party is entitled to demand monetary compensation of the damages or losses incurred (Taylor 105). The court is responsible for determining whether a term in a contract is either as warranty or a condition. In this regard, the court considers many factors or circumstances including the possible consequences if the contract remains non-binding as well as the intentions of the two parties when they agreed to make the contract. However, the parties’ description of terms as either warranties or conditions does not guarantee the fact that the court will also regard the terms in such a manner (Taylor 106).
Question 5
Disputes are always common especially in performing the terms of the contract (Rossman 5). When contract statements are made during the initial stages of making a contract, disputes always arise regarding which of the statements are part or term of the contract and which ones are considered as pre-contract talks. When entering a contract, parties involved always avoid thinking the future outcomes as a result of a dispute. However, drafting contractual provisions concerned with termination of the contract avoids costly litigation. The fact that disputes are common in contracts; this does not infer the fact that it’s the end of the contract (Rossman 5)
Resolving disputes in a contract greatly depends on the escalation of the issues arising. Both litigation and arbitration could be used in dispute resolution in a contract. Litigation is conflict solving process that involves courts. This is when both parties decide to take...