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PROJ410 Week 7 DQ1 Renegotiation and Termination
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Renegotiation and TerminationMore often than not, it is more desirable to renegotiate a contract than to terminate one. What do you think may be some of the effects of a contract termination from the buyer's perspective? What about from the seller's perspective?Termination of a BPO contract will cause each of the parties to incur additional costs. The question to ask would be if the additional cost outweigh the risk or cost of not terminating and How much are the costs and can they be mitigated. Examples of such costs may include additional fees to the vendor for providing termination services, such as maintaining parallel environments and training of customer employees.On both sides, contract termination generally costs time, money and can result in ill-will by one or both parties. Other than price/cost, why would one renegotiate a BPO contract? Can you give examples of the absolute need for termination?Could contract termination cause serious financial consequences? Could it go all the way to the extreme whereby a contract termination could have irreparable harm for a vendor? What are your thoughts as we go all the way (so to speak)? ;-)There is a risk of irreparable harm. If the vendor leveraged a great deal of money or assets against a specific contract and the contract was terminated, the vendor could find themselves in default of loans. This could be particularly damaging in manufacturing if the vendor is producing parts that are specific to a customer and they lose that customer without anything in the pipeline. In your opinion which contract pricing structure better facilitates a contract renegotiation? https://www.examtutorials.com/course/proj410-week-7-dq1-renegotiation-and-termination/ |
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