Areas of potential dispute, liability of each party in a contract dispute
Some of the areas of potential dispute are in the form of the contracting process, the contracting relationship formed and more. The contract is of a dynamic nature, which leads to many areas of dispute. In my role as the contracting manager, I will first ensure that some process is formed in order to ensure that disagreement between the contractor and the manufacturing company is resolved. Some disputes that might arise here are:
Difference of opinion when executing the software development and implementation. Although the deliverable might be agreed upon, the type of software installation might be variable. There are so many tradeoffs when using software’s, such as execution speed versus accuracy, or cost versus open source software’s etc. These are product related conflicts.
There can be commercial risks and liabilities. As a commercial risk, consider the point made in the case study that most of the products are sourced outside. If the products do not arrive in time and if this delays the project, who should assume the risk then? Should the risk be assumed by the contractor or the manufacturing company? If there are any other commercial liabilities such as product related damages, who should assume responsibility?
In the installation of the commercial hardware floor for the server room and more, there could be injuries because of electrical, and there could be fire related injuries as well. In this case, as contracting manager, I would advise the manufacturing company to clearly state in its contract terms that they would only assume limited liability and that the contractor must assume the maximum liability.
In addition to product related liability, there will also be professional liability in the form of errors or omissions. As the manager in charge of contracting, any form of omission in the contract statement that leads to liability for the manufacturing company would reflect poorly on the contracting manager.
An important liability that is often faced in the context of software and hardware infrastructure setup is the liability that is associated with data breach. Data breach liability would fall on the manufacturer, as the product designed by potential contractors would be used by the manufacturing company. The manufacturing company has a duty towards its customers to protect their data and should ensure by working with its development contractors that the software was error free. So when the data breach happens, the liability for the data breach will fall on the manufacturing company. Since the contractor completes the work and hands over the hardware to the company, the work becomes the official property of the company. So any form of grievance or injury to the customer with that product will automatically become the liability of the manufacturing company only.