This assessment addresses the following course objective(s):

• Explain the components of contract law.

Instructions

You work for a retail clothing store that is just beginning to consider an online website to sell its goods. Your employer has been in discussions with a website design company that has provided her with the following proposal and agreement. She is very concerned that the agreement is not comprehensive and enforceable but would like your opinion before taking it to outside counsel. Examine the attached contract and statement of work.

Submit

After evaluating the statement of work and agreements, identify two issues that you feel are most concerning based on the materials presented.

Provide a discussion of these two concerns including:

• what is missing from the agreement
• the types of issues that this flaw in the agreement may cause
• how you would rectify this flaw

See Text questions below

Business Contract Template

ABC Retail Store, with a business address at 123 Main St. Anytown, WI ("Client"), and Fly-By-Night Website Design, with a business address at 456 28^thSt. Somewhere, Canada ("Provider"), enter into this Business Contract (this "Business Contract" or this "Agreement") for the performance of website design services as set forth in the statement of work (each, a "Statement of Work") attached to and made part of this Agreement, from time to time as Exhibits, on the following terms and conditions:

SCOPE OF WORK

The work to be performed by Provider under this Business Contract ("Services") shall be as set forth in Provider's Statements of Work.

If Client provides any equipment, tools and/or materials, it will be used exclusively for Client related projects and it will be returned at the conclusion of the work described in this Agreement. No subcontractors or consultants shall be engaged to carry out any part of the Services without prior written permission of Client. Client shall have the right at any time to request the immediate replacement of Provider's personnel.

PAYMENT

Provider will invoice Client for Services performed within 30 days of performance. Client will pay Provider as set forth in each Statement of Work within 5 days of receipt and acceptance of such invoice. It is understood that payments to Provider for services rendered shall be made in full as agreed, without any deductions for taxes of any kind whatsoever, in conformity with Provider's status as an independent contractor.

ACCEPTANCE

The Deliverables, as defined in each Statement of Work, shall be deemed accepted by Client upon completion of the following acceptance test:

1.immediately upon receipt of said Deliverables, Client shall promptly, but in any event not more than 2 business days ("Acceptance Period"), perform testing of the Deliverables to confirm that the Deliverables perform in accordance with the documentation or other standards applicable thereto as set forth in the applicable Statement of Work;

2.Within 1 business day following the end of the Acceptance Period, Client shall either provide Provider with written acceptance of the Deliverables, or deliver to Provider a detailed written statement of nonconformities to be corrected prior to Client's acceptance of the Deliverables.

Any such written statement of nonconformities shall provide sufficient detail to enable Provider to remedy the failure to conform to the completion criteria contained in the applicable Statement of Work.

Unless otherwise agreed to in writing by the parties, Provider will redeliver corrected Deliverables to Client within a reasonable amount of time after receipt of such statement of nonconformities.

Following redelivery of corrected Deliverables, a new acceptance test shall be immediately commenced by Client. If Client fails to provide a written acceptance or a written statement of nonconformities within one (1) day following the last Acceptance Period, or such other mutually acceptable period, of initial receipt of said Deliverables, the Deliverables shall be deemed immediately accepted by Client.

INTELLECTUAL PROPERTY

Client will retain ownership of any data, information or intellectual property furnished to Provider in connection with this Agreement.Client will own any intellectual property that results from the Services, including without limitation software (in both machine-readable form and in source code form), data, and other information, excluding any intellectual property generated by Provider in performing the Services that relates solely to Provider's business, which shall be the property of Provider; provided that Client shall have the right to use such Provider intellectual property in accordance with the following license terms:

i.Client may use Provider Intellectual Property solely in connection with the services, for the purpose for which those products were originally purchased.

ii.Client may not transfer, sell, or otherwise dispose of any Provider Proprietary Items without the prior written consent of Provider.

iii.This license gives no title or ownership rights in Provider Intellectual Property or related intellectual property to Client.

iv.If software source code is delivered to Client under this license, Client agrees to keep the source code strictly confidential.If software object code is delivered, Client will not copy or modify the software or subject the software to any process intended to create computer source code from Provider Intellectual Property.

v.Client agrees to retain or reproduce on all copies of any Provider Intellectual Property all copyright notices and other proprietary legends and all trademarks or service marks of Provider.

vi.Separate licensing agreements will be negotiated for any of Provider's commercial off-the-shelf type products, if such items are ordered by Client.

CONFIDENTIALITY

For purposes of this Agreement, the term "Information" shall mean any information that Provider may receive from Client pursuant to this Agreement where such information (a) if Provider receives it in written form, is marked "Confidential" and (b) if Provider does not receive it in written form, is declared by Client in writing to be confidential within thirty (30) days after disclosure.

Provider shall maintain the Information in confidence with the same degree of care it holds its own confidential information. Provider shall not use the Information except to perform the Services.

Provider will disclose the Information only to its officers and employees directly concerned with the Statements of Work, but will neither disclose the Information to any third party nor use the Information for any other purpose.

Provider's obligation of nondisclosure and the limitations upon the right to use the Information shall not apply to the extent that Provider can demonstrate that the Information:

1.was in the possession of Provider prior to the time of disclosure; or

2.is or becomes public knowledge through no fault or omission of Provider; or

3.is obtained by Provider from a third party under no obligation of confidentiality to Client.

All Information will be returned or, in the case of the Statements of Work, delivered to Client upon termination of this Business Contract for any reason, except for one copy, which Provider may use for the sole purpose of determining its continuing confidentiality obligation to Client under this Agreement.

All obligations of Provider under this Section shall survive the termination of this Agreement for a period of two (2) months.

INDEMNIFICATION

Provider understands that, since Provider is an independent contractor, any personal injury or property damage suffered by Provider in the course of carrying out any duties under this Agreement will be Provider's sole responsibility.No worker's compensation insurance shall be obtained by Client concerning Provider or any of Provider's employees. Provider shall comply with worker's compensation laws and shall provide a certificate of worker's compensation insurance, where applicable.

Client agrees to indemnify and hold Provider harmless against all claims, demands, suits, liabilities, losses, damages or injuries (collectively "Liabilities") that arise out of Client's use of the Services, except to the extent such Liabilities result from the negligence or wrong doing of Provider. Provider agrees to indemnify and hold Client harmless against all claims, demands, suits, liabilities, losses, damages or injuries that arise out of Provider's performance of this Agreement, except to the extent such Liabilities result from the negligence or wrong doing of Client.

LIMITATION OF LIABILITY

In no event will either party be liable for any SPECIAL, INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES.

ENTIRE AGREEMENT

This Agreement sets forth the entire agreement between Client and Provider as to its subject matter.None of the terms of this Business Contract shall be amended except in writing signed by both parties.

TERMINATION FOR BREACH

If either party breaches this Agreement, the other may terminate this Agreement if the breaching party does not cure the breach within thirty (30) days of written notice of same. Termination shall be without prejudice to any rights which may have been accrued to either party before termination.

FORCE MAJEURE

Neither Client nor Provider shall be liable for failure of or delay in performing obligations set forth in this Agreement, and neither shall be deemed in breach of its obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of Client or Provider.

AUTHORITY AND COMPLIANCE

Provider has the right and authority to enter into and perform its obligations under this Agreement. Provider will perform all of its obligations under this Agreement in accordance with all applicable governmental laws, rules, and regulations.