The concept of a contract - Case Study Example

? Case Study A contract is basically a mutual agreement amidst two parties entering voluntarily in which, one party promises to do something in return for a valuable benefit usually known as the consideration from the other. With reference to the case, Super-Cola Taiwan (SCT) entered into a contract with Dag-Brucken ASRS Pty Ltd (DB) to manufacture an Automated Storage and Retrieval System (ASRC) for the production facilities of SCT located in Taiwan on a contractual basis payable at defined stages after the completion of predefined milestones. However, it was later viewed that lack of proper operational performance and improper management of DB, resulted in the failure of the overall project (USA Gov, 2013). Critically observing, it can be identified that DB had intentionally overlooked its implied obligation to maintain transparency and systematic order in its service delivery process. Tactfully, DB withdrew from performing any written contractual promises, which was overlooked by the other two parties involved in the contract. Certainly the absence of firm verbal intimation regarding the offer and acceptance of the contract along with specific proclamations of clauses to be adhered by the parties involved had been a major setback for the sufferer, i.e. SCT (USA Gov, 2013). However, given the legal guidelines of having a viable contract SCT can take legal directions even with the non-availability of any written proof to the contract. Considering, the fact that DB had delivered the services demanded through the contract by SCT, it can be affirmed that a contractual relationship existed between DB and SCT. 2. Ethics in legal decision making plays a vital role, as it helps in taking legal decisions, which are accepted within the societal context. Legal terms between the two parties owing to contractual agreement inculcate ethical considerations for effective completion of the contract. In a contractual agreement, ‘Breach of Confidence’ plays a vital role in assuring both the parties to undertake ethical measures within this particular contractual relationship. Critically, observing, it can be ascertained from the case study that two of the contractors of DB have violated the legal implications of ‘Breach of Confidence’. Considering the case scenario, it can be observed that two external contractors of DB have leaked some vital information relating to a contract of their company with a Taiwanese’s firm. The case further states that the two external contractors conveyed the client i.e. SCT about the DB’s failure in meeting the requirements of the Taiwanese’s firm, which leads to a greater monetary loss of the parent company. However, owing to the aforesaid scenario, it can be comprehended that ethical and legal implications can be implemented complying with the disloyalty of the two external contractors. In this regard DB can firstly terminate the contract with both the contractor under the ‘Breach of Privacy Law’. Concerning with the abovementioned act, it implies about the authority of an organization to create its own privacy rule while making sure that minimum standards are applicable to protect the private information of the company (Andrews, 2011). Secondly the company can take legal action that would restrict the two contractors from conducting such illegal activity. Additionally, the company could also ask the legal advisor to undergo a detailed investigation about the whole scenario and make decisions accordingly. However, the company can ask the legal body to charge monetary fines pertaining to the breach of confidentiality as a legal implication. Considering the aforesaid scenario it can be apprehended that ethical consideration the company could have provided them their salary which would have restricted them from taking such illegal steps (Australian Government, 2012). 3. Critically, examining the case scenario, it can be comprehended that DB has violated numerous rules and regulations associated with the contractual agreement. Data security is considered to be a vital aspect in every organization in the modern context. There exist several cases where, breach of data resulted in dissolution of a firm or experienced huge monetary loss. In this context it has been viewed that DB an electrical engineering company of Australia suffered huge financial losses resulting in leakage of data by two of their contractual employee which violated the Privacy Laws. The case not only states the importance of conducting a legal contract between the employees and the organization restricting the person to outflow vital data’s of the company. The case also highlights the importance of prescribing written statement in the contract as it helps them to justify whether the contract has been fulfilled considering all the factors or not. It has also been stated that the Singapore client has terminated their contract few days after the information was leaked. In essence the case also reflects about the importance of stating clearly that, any contract established within any two parties does not restricts either of them to enter into contractual agreement with the third party (Andrews, 2011). With reference to the case it can be stated that it not only highlights the importance of adhering proper guidelines while establishing a contract which while violated will lead to breach of contract. In this case scenario DB has violated some of the essential requirement of the clients resulting in cancellation of the project at the end stage. 4. The different legal steps that could have undertaken by SCT to avoid the project failure are listed here under: Defining requirement: The first step that could be adapted by SCT is gathering all the vital information related to the project and stating them in the contract as it would have helped SCT to identify the loop holes earlier and make necessary changes in the contract. Additionally, the mentioned requirements provided by SCT would have provided a blue print to DB that needed to be followed while executing a project. Statement of Work: Statement of work is considered to the detailed time allotment and the resources that are to be used while executing a project. In this context if SCT would have provided a statement of work DB would have adapted operational performance throughout the project life cycle providing clear pictures of their progress. In this context, SCT would have identified loop-holes that way and provide necessary suggestion. Manageable phase: Considering the risk factor of such a huge project, necessitates the task would have been divided into different phase. In this regard, if this information would have been mentioned in the contract, DB would have completed the project effectively under contractual obligations. Miles stone: If mile stone would have been stated in the contract, it would have restricted DB to complete their task accordingly, as failure to complete the given task would have resulted in taking legal action against them (Andrews, 2011; Hodgett, 2012). Thus it can be stated that if all the mentioned precautions would have been adapted by SCT the project would have been a successful one. References Andrews, N. (2011). Contract Law. The United Kingdom: Cambridge University Press. Australian Government. (2012). Data breach notification — A guide to handling personal information security breaches. Retrieved from http://www.oaic.gov.au/privacy/privacy-resources/privacy-guides/data-breach-notification-a-guide-to-handling-personal-information-security-breaches#_Toc301281667 Hodgett, S. (2012). IT projects – steps to avoid project failure. Retrieved from http://www.lexology.com/library/detail.aspx?g=173e4c05-a142-43d1-a241-c7196c0da196 USA Gov., 2013. Subpart 227.71--Rights in technical data. Retrieved from http://www.acq.osd.mil/dpap/dars/dfars/html/current/227_71.htm Read More