The Big Bank and Systems, Inc. data processing agreement dispute

Contract Dispute

The Data Processing Agreement was entered into between Big Bank and Systems, Inc. And the agreement involved Systems Inc. agreeing to render data processing services to Big Bank. In this dispute the services rendered are not under dispute but instead the time that it took for the data services to be in place and all data converted. The contract sets out that the date services would be rendered "within a reasonable time following execution" of the Agreement. Big Bank agreed within the framework of the contract to cooperate with Systems Inc. And to make provision of all information and assistance that Systems Inc. might require to conduct a successful conversion of Big Bank's information files to "a form compatible with System Inc.'s systems and equipment so that System Inc. could provide the Services. Specifically, Big Bank agreed to "deliver conversion input information, in its entirety, in a mutually acceptable medium, within one week of the request of the information."

I. Contingencies in the Contract

There are several contingencies included in this contract. The first contingency states that System's Inc. retains the right to make the determination according to System's Inc.'s own procedures when the successful conversion of Big Bank's information files has been accomplished in terms of them being operation and ready for use by Big Bank. In addition Big Bank is under a requirement according to the terms of the contract to provide the necessary information within one (1) week's time upon request by Systems, Inc. In addition, according to the terms of the contract, Big Bank has entered into an agreement in which System's Inc. has the right reserved to postpone conversion of the information files of Big Bank if Big Bank is late in delivering the input information required for the conversion or if "any other circumstances arise that might jeopardize the successful completion of big Bank's information conversion of the processing of the Big Bank's following day's transactions for any other customers of Systems, Inc."

The contract goes on to state the requirement for Big Bank to be responsible for "providing to Systems, Inc. all input data and other information necessary for systems Inc. To perform the Services and to prepare the reports . Under the terms of the contract, Systems Inc. is "solely responsible for the accuracy and delivery of all information to be provided to Systems Inc. For processing.

V. Three Types of Contract Performance

There are three types of contract performance or failure to perform resulting in a breach of contract. The first type of contract performance is complete or where all conditions of the contract have been met. The second type of contract performance is substantial performance, meaning that the majority of the conditions of the contract have been met. Finally, there is what is termed as a material breach of the contract meaning that there has been a failure to perform the contract and that the failure "strikes so deeply at the heart of the contract that it renders the agreement 'irreparably broken'. (NOLO, 2014, p. 1)This has not occurred in the contract between Big Bank and Systems Inc. The performance of the contract in this situation is not complete since Big Bank failed to keep it agreements within the framework of the contract and while System's Inc. also failed to keep the precise agreement there are extenuating circumstances since Big Bank in essence caused some of the failure of the contract on the part of Systems, Inc. And System's Inc. is additionally protected due to the limited liability clause contained within the contract. In cases where there is a different level of performance by parties to a contract, it is possible that one party may successfully file a suit against the other party for damages.

Two important concepts gained from the review and study of this contractual conflict include first that a limited liability clause in a contract is a very essential part of any contract because situations may arise in which the parties have not actual, real, or even potential control over delays such as in the case of the ice storm. The second concept gained from the review and study of this contractual conflict is that when dealing with deadlines and time limitations that there should be very specific stated information concerning the meeting of deadlines and the requirements from each party to ensure that these deadlines are met.