A formal notification of contract award was issued to Capgemini UK PLC in June. It included a reference to JDPi 's standard terms of contract for IT services. Three days later, Capgemini UK PLC acknowledged the notification of award of contract by a letter reproduced below: "We have pleasure in receiving your letter of confirmation dated 24th June and confirm that work is underway on the project. We anticipate that the work will be completed by the end of December and look forward to working with you in full cooperation on the project. Please be assured that we will use our best endeavours to achieve the completion date, and you will note that work is already underway. You will note that the project is in accordance with our tender submitted to you in March."

Half way through the six months period for performance of the above contract, JDPi take the decision to upgrade their computer operating system from the MSV3 to the X2014. The formal business case was approved and specifications for the work to be done are now being drawn Capgemini UK PLC has been informed of this development. However, Capgemini UK PLC argues that this represents a significant variation to the scope of the upgrading of the specific IT system originally contracted for. This specific admin system was designed to operate under the system. Capgemini UK PLC argues that all the data and their integration will need considerable re-design. It will take several additional months to realign the admin/payment system it was upgrading with the X2014 operating system and, therefore, the envisaged completion date of December will not now be achievable unless JDPi agreed to increase payment by a further 100,000. After a bitter argument JDPi reluctantly agreed to pay the increased sum in order to ensure that the job was done on time. After completing the work on time JDPi refused to make the additional payments to Capgemini UK PLC outside the original contractual price.

Your Task

Consider the above situation arid respond to the following issues:

2. Whose terms and conditions govern the contract?

3. What does this mean to the legal rights/obligations of JDPi?

4. You are required to advise Capgemini UK PLC whether he has any rights in law to enforce JDPi r's promise to pay the extra 100,000.

5. Examine different sourcing approaches that could be used by JDPi to more effectively source IT systems. What legal aspects need to be considered in these supply chain relationships?