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Contract Law, please help!

Discussion in 'Other Legal Issues' started by tinauk, Mar 10, 2004.

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  1. tinauk

    tinauk Law Topic Starter New Member

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    hi, im new to this site so i dont really know how it works, but i have a problem, maybe someone here could give me a solution. i wanted to present a scenario and wanted to know if it would stand up in court or not.

    i know its very long and boring, but i would be very grateful if anybody could help me, on the law side, as to what can be done to get the 20,000 back, go into arbituation, take them into court? would a verbal agreement stand up in court?


    ‘Acme Computing Graphics (ACG) won a contract to develop a Media Suite for the Journal for Men’s Liberation (JML). JML had been increasing its circulation throughout the world and it needed to improve its production efficiency. ACG had won the contract in the face of stiff competition at an agreed fixed price of £100,000 (ACG’s submitted bid price was £120,000 but reduced to £100,000 following negotiations). The duration of the contract was planned to be 3 months. During the first month of work JML made several changes to the specification but claimed that these changes made it easier for ACG to deliver the suite and therefore refused to increase the contract price (and in any case claimed that the changes were discussed during negotiations and were implied in the ‘Invitation to Bid’ documentation). ACG claimed that the changes were never discussed and that the scope of work had increased (in man-hour terms) by 20%. ACG continued with the development and delivered the suite on time but were approximately £20,000 out of pocket.
    and the scenario is this
    JML’s invitation to bid had described the project as compromising 3 parts. These were the mediasuite, the website and a network. ACG had responded to the invitation to bid by submitting a proposal to construct and maintain all 3 parts of this project for JML for the sum of $120,000. After negotiations JML had removed the network option from ACG’s project list. So now ACG was contracted to construct and maintain the website and media-suite which are the remaining 2 parts of the project for the sum of $100,000. JML then planned to assign the rights to the network to another company. It was agreed that the built time for the entire project would last 3 months with progress reports being delivered to JML every 3 weeks.
    However after construction had begun and the first progress report had been delivered JML then made several minor changes to the specification. A week later that is 1 month into the 3 month working period JML handed the construction and maintenance of the network back to ACG with no additional resources being given. JML claimed that it made the work easier for ACG (They assumed that the work would be made easier as constructing the network ourselves would instantly make the software we are designing compatible with the hardware) We later learned that the negotiations with the company JML had planned would built the network fell through.
     
  2. Michael Wechsler

    Michael Wechsler Administrator Staff Member

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    The answer lies within the terms of the contract -- is there a signed agreement? If so, issues concerning modifications should have been addressed within the deal and that would be the source for the strongest argument to be made.

     

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