Case Analysis
The legal directions the various involved parties could have adopted
The parties could have engaged in law binding international contracts, in which case the parties could have offered and accepted the underlying agreements and supported the agreement by considerations with no exceptions. They could also have voluntarily entered into the agreement with no duress and made the agreement with outstanding capacity to contract (Jewels 248). Similarly, the legal framework provides that the parties could have identified the complexities associated with the contract, and therefore elevated unusual provisions that would in return ensure effective implementation of the contract. The legal directions provide for factors such as distance between the negotiating parties, substance and performance, language, currencies, countries’ legal systems, and business customs that could have contributed to the failure of the contract since there is a possibility of these factors’ influence on the nature and the way the contract is written. For example, we realize that even though the Australian vendor had assumed that the contract with the Taiwan client was binding per se, the Taiwan Client seemed to have interpreted the contract as merely the initial stage in negotiations, and which could be altered at any point of the development without focus on the interest of the other party (Jewels 248).
Before engaging in any contract, it was necessary to analyze each party’s attitude towards the relationship. It is true that the cultural expectations of the transacting parties was that the relationship was to be long term, and as a result, negotiations could have provided a platform for the parties to know each other before signing the contract (Jewels 250). In other words, the established relationship according to international contracts could have offered a base for dispute resolution as contained in the contract itself.
The actions might have been taken towards the two external contractors
Both ethics and law have impact on business transactions and contract needs since they help to identify and define the conditions upon which the parties must operate for the process to be counted as valid. Where there are possibilities of fallout or unfulfilled promises, the ethical and legal principles provide for the actions to be taken to fulfil the project or contract needs (Jewels 253). Some of the actions within the defined context would have included debarment of external contractors from the perspectives of eligibility and compliance, charging the contractors for the crimes committed by their employees, and finally applying the sentencing laws on the contracting parties.
The actions taken through debarment can be considered appropriate remedies similar to criminal or civil penalties that intend to deter future misconduct. The external contractors in this case must comply with the legal requirements by improving their ethical cultures in order to eliminate the risks associated with contract fraud, failure to which an amount of penalty, including denial of future contracts, will be wagged. This means that the law enforcement body could have improved the actions of the parties by ensuring complete compliance with the contract laws (Jewels 255). Debarment falls among the most feared actions taken by the law enforcement bodies since it involves listing the names of the external contractors on a public internet and effectively prohibiting an award of any new contract. Through the debarment actions, the external contractors will be compelled to always operate with the objectives of meeting the contract requirements for future consideration.
The charging could be based on understanding that the act was intended to benefit or benefited the external contractors. Before charging external contractors on the bases mentioned, there is need to determine whether the contractors had effective compliance programs at the time the contract was failing. The intention here is to detect and eliminate wrongdoing and ensure that each of the parties is managing their enforcement programs for maximum effectiveness (Jewels 256). This would mean that every time the external contractors fail to meet their obligations as far as the contract is concerned, the legal environment would provide for equivalent penalties to compensate other parties for the loses.
Broad legal issues contained within the case study
The broad legal issues discussed in the course and contained within the case include a contractual agreement, staged payments, inexistence of performance specification, and inexistence of contract negotiations. Others are lack of direct contact between the clients and DB, insufficient description of the contract and performance requirement, inefficient time for adjustment, and lack of confidentiality between DB and the external contractors (Jewels 256). The project would have been fruitful in case the parties were able to consider the contract elements as highly binding and only executable if there is willingness and equal participation.
As part of the contract, there was an agreement to supply an automated storage and retrieval system facility to SCT. The supply agreement was to be fulfilled by DB and its four clients following a provision for staged payment. These were the terms of agreement, which the parties were to follow for the purposes of meeting the objectives of contract. It is however noted that the agreement lacked credibility at its first stage since there were limited platforms for direct contact between the parties, and also inflexibility in time, while the terms of operation made it hard for the teams to meet each party’s expectations.
Legal steps that could have been undertaken by SCT to avoid the project failure
Even though language is not considered a barrier to international contracts and business negotiations, SCT could have operated on clearly defined contract terms and in a language that can be understood by the transacting parties and legal teams. In case the parties were not conversant with the contract language, SCT could have employed interpreters to facilitate the negotiation (Jewels 257). The fact that the parties could communicate and understand the terms of the contract, its nature, and implementation stages could have helped to prevent unexpected project failures.
Other than the language of communication, the parties could have clearly defined the methods of payment since the transaction was based on international currencies with varying exchange rates. With the fluctuations in prices of foreign currencies, the need to understand the causes of price volatility of currencies could have triggered additional measures like hedging in order to avoid losses resulting from currency fluctuations.
The contract also requires the parties to use letter of credit since the time taken before the goods are delivered was longer than expected. Through the letter of credit, it could have been possible for the parties to determine the validity of the contract since the letter provides an assurance from the bank of the buyer to pay certain amounts of money to the seller once the shipment documents are received and contractual obligations met (Jewels 257). This means that the parties could have demanded for the transactional documents like certificate of origin, export licences, certificate of inspection, sales invoices and insurance policy before accepting to engage in the contract.
Works cited
Jewels, Tony J. “The Dag-Brücken ASRS Case Study.” Journal of Information Systems Education 14.3 (2003): 247-257.