George Samuel Wijaya 1

BUSINESS LAW FINAL ASSIGNMENT

by

George Samuel Wijaya

Business Law

Mr. Douglas Daquioag

IBA – LBIS

Jakarta, Indonesia

9 September 2019
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Final Assignment

Task 1

A Seattle based Smartphone Company called HDC asked a software company SDC to

develop software for them. The software company gave a total estimate of 10,000

dollars for a total work of 20 days. It was agreed between the two companies that HDC

would be paying SDC 30 percent before the beginning of the work, 60 percent after the

initial version and 10 percent on competition.

After 10 days, of work SDC wrote a letter that the work will take more time since their

chief software developer has left the company. After 15 days SDC wrote back saying

that they would be only able to deliver the source codes and would provide an assistant

developer who will finish the rest of the work. After 20 days, when HDC asked for the

final version, SDC told them that it can provide them with 80 percent of the work and

would like the 60 percent as promised. However, fearing non-completion of the project,

HDC cancelled the contract and asked for a full refund. SDC has threatened to take

HDC to court for a breach of contract.

1. Does HDC entitled for a refund? Which Basics Law should HDC used to

support their Lawsuit?

Considering that SDC did not keep their promise of the estimation

working time, HDC is entitled to ask for a refund since they had a business

contract which it can help to support their lawsuit. The business contract itself

is a legal agreement between two parties to create obligations that can be

legally enforced to perform or refrain from doing certain tasks in keeping with

Joseph (n.d.). However, HDC is not entitled to get a full refund, seeing that
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SDC already did 80 percent of the work and tried to offer HDC an assistant

developer to finish the rest of the work. Another reason on why HDC does not

deserve a full refund is because they promised to pay 60% of the fee once

they get the initial version (which SDC already did), not the full version.

Thus, as the conclusion; it is better for HDC to file a lawsuit against SDC with

the aim of getting 30% of refund which it was given before the beginning of

the work instead of aiming for a full refund.

2. If SDC filed a Lawsuit against HDC, do they have the opportunity to

win? Analyze and explain!

Indubitably, SDC does have the opportunity to win if they file a

lawsuit against HDC. SDC is able to file a lawsuit for a breach of contract.

Breach of contract itself is a legal term that describes an infringement of

contract or agreement that occurs when one party fails to fulfill its promise in

accordance with the provisions of the agreement based on Murray (2019).

There are different types of contract in consonance with Upcounsel (n.d.),

such as contract based on formation, contract based on nature of

consideration, contract based on execution, and contract based on validity.

The contract that HDC and SDC have is a bilateral contract which is under the

contract based on the nature of consideration to be exact.

With that contract, SDC surely has the opportunity to win because a

bilateral contract is a two-sided contract which each party promises each other

to perform an act and HDC is not allowed to cancel it just like that. There are

some things that HDC has to consider and negotiate first with SDC before

canceling the contract suchlike considering the current situation, conditions,

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and the consequences which were made in the contract. In addition, SDC has

an opportunity to win since they already did the initial version of the work

with a completion rate of 80 percent and offered HDC for an assistant

developer to complete the work, which we can see that SDC is responsible

with the work even though they need more time.

3. In your opinion, explain who has the bigger chance to win!

In my opinion, SDC has the bigger chance to win if HDC cancels the

contract with the basis that SDC already did the work and they did not neglect

their responsibility even though the chief software developer has left the

company. Instead of giving an excuse, SDC tried their best to complete the

work to fulfill the contract which enables SDC to file a lawsuit of a material

breach of contract. In conformity with LaMance (2018), a material breach

itself occurs when one of the parties in the contract fails to perform an act,

and the injured party suffers significantly in terms of material. In the case of

material breach, the court will provide the greatest remedy to the injured party

to make them whole again. However, HDC has the bigger chance to win if

they do not cancel the contract with the basis that SDC was not able to fulfill

their promise that enables HDC to file a lawsuit of a fundamental breach of

contract to look for a rescission or canceling the contract and get a refund for

the attempted service or product. A fundamental breach of contract itself has a

meaning that one of the parties in the agreement does not hold their part of the

agreement by failing to complete the contract conditions that are so important

to the agreement that the other party cannot complete their responsibilities in

the contract in accordance with Concord (2018).

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References

Joseph, C. (n.d.). What Are the Elements of a Business Contract? [online]

Smallbusiness.chron.com. Available at: https://smallbusiness.chron.com/elements-

business-contract-786.html [Accessed 10 Sep. 2019].

Murray, J. (2019). What Is a Breach of Contract Lawsuit? [online] The Balance

Small Business. Available at: https://www.thebalancesmb.com/breach-of-contract-

398138 [Accessed 10 Sep. 2019].

Law, D. (n.d.). Different Kinds of Contracts in Business Law. [online] UpCounsel.

Available at: https://www.upcounsel.com/different-kinds-of-contracts-in-business-

law [Accessed 10 Sep. 2019].

Editorial, C. (2018). Fundamental Breach of Contract | Concord. [online] Concord.

Available at: https://www.concordnow.com/blog/fundamental-breach-of-contract/

[Accessed 10 Sep. 2019].

LaMance, K. (2018). Material Breach of Contract. [online] LegalMatch Law

Library. Available at: https://www.legalmatch.com/law-library/article/material-

breach-of-contract.html [Accessed 10 Sep. 2019].