Rescission of the contract

1) It would be a rescission of the contract because of the following reasons :

1. A syndicate contract can be cancelled, in relation to any of the contracting parties, by ways of written statements from all the other members, in case of fair and valid cause

2. It is taken as a valid cause for cancellation of an association or syndicate contract in relation to any of the parties which get in contract:

a) the declaration of insolvency or bankruptcy ;

b) a violation or breach , is serious in itself or by its repetition, with or without fault, of duties of members of the syndicate

c) the impossibility, with or without fault, to fulfill the obligation to undertake a certain activity or to make a certain contribution.

3. In the above mentioned b) and c),cancellation of the agreement or contract do not affect the right to any compensation that is outstanding

The termination amount demanded by the contractor , is baseless , as already the amount of the four delivered ships was made , so no other payment or settlement cost is required to be paid by the navy

3 ) The termination proposal is as follows :

Naval Base ( USS )

Naval Contractor

Janelle Cash

NOB

Norfolk, VA 23511

Dear Mrs. Cash :

Enclosed, please find our proposal to settle the Government’s termination of contract N10001-00-C-0343. This proposal is in reference to the settlement proposal sent to us requesting the sum of $122,242 in settlement costs.

I am already shocked , that your company being a long partner of the Navy , could not deliver the ships on time

And more strange thing was the certain illogical excuses were given to us pertaining to the delivery of the remaining six ships .

On the respect of such an activity , I consider your company as the guilt party and my self as the aggrieved party . .

I may take some legally forcible action, and file a suit against your company , on the account of damages suffered by me , for non delievery of the cranes and for rescission , for non performing or inadequately performing the duties as stated in the contract

I demand an expeditious reply from you as soon as possible .

If you need any additional information, please do not hesitate to contact me.

Sincerely,

Mrs Stokes ( Naval Base )

The aggrieved party ( Navy ) has the following remedies available :

Contractual Damages

The distressed or aggrieved employee in the contract if unfairly or by wrong means gets terminated, then he / she will be given or awarded damages that will put him back in the same good position or status , if the contractual terms were fully met

Loss of Benefit of Contract

The lost benefit of the contract consists of the following parts of remuneration (1) beyond reach wages, (2) beyond reach bonuses, calculations done on the basis of wages history of the employee who files the suit and (3) beyond reach employee benefits, such as profit sharing, retirement benefits, Social Security contributions, ESOPS, tuition reimbursement and leisure time .

Consequential losses

A distressed employee may go back from an employer damages for damages occurring as a result of the unfair termination if such damage was (1) within the wrong intention and contemplation of the parties, at the time of entering the agreement and (2) Arising due to any other circumstances which may ultimately lead to the breach or violation of the contract

Tort Damages

They are those damages to “make happen a suit " or to adjust him or her for his losses due to the physical injury or any other damages or in this case a unfair termination by an employer and related torts coming due to any unfair or wrong practices

Review Questions :

1)

When pricing noncommercial-item fixed-price terminations for convenience, your primary objective should be to negotiate a reasonable settlement by agreement. The settlement atone the contractor in an appropriate manner for all the work done by the him for that part of the contract or agreement which has been excluded or no more a part of the contract , including a reasonable gain • Use judgment in arriving at the amount of reasonable compensation.

• Use cost and accounting data as guides, not rigid measures of reasonable compensation.

• Use other types of data, criteria, or standards as guides to fair contractor compensation.

• Agree on the total amount to be paid the contractor. There is no requirement to agree on the particular elements of cost or profit included in the agreement.

Key Points to Consider. As you establish a settlement amount, consider the following key points:

• Maximum settlement amount:

• General settlement proposal requirements; • Basis used to develop the settlement proposal (inventory, total cost, or other);

• Settlement expenses;

• Settlement profit;

• Adjustment for loss contracts; and

• Deductions from gross settlement amount.

Maximum Settlement Amount : The maximum amount of a termination settlement may not exceed the sum of:

• Total contract price as reduced by:

The amount of any payments previously made, and

The contract price of any work not terminated; plus

• Reasonable settlement costs as :

costing, legal, , and other expenses which seem to be a compulsion for preparation of new settlement proposals and supporting contracts

The termination and settlement of subcontracts; and warehouse , logistics, and other incurred costs which are a compulsion for the preserving, protecting, or disposing

2)

When pricing noncommercial-item fixed-price terminations for convenience, your primary objective should be to negotiate a reasonable settlement by agreement.

• Use judgment in arriving at the amount of reasonable compensation.

• Use cost and accounting data as guides, not rigid measures of reasonable compensation.

• Use other types of data, criteria, or standards as guides to fair contractor compensation.

• Agree on the total amount to be paid the contractor. There is no requirement to agree on the particular elements of cost or profit included in the agreement.

Key Points to Consider.

As you establish a settlement amount, consider the following key points:

• Maximum settlement amount:

• General settlement proposal requirements;

• Basis used to develop the settlement proposal (inventory, total cost, or other);

• Settlement expenses;

• Settlement profit;

• Adjustment for loss contracts; and

• Deductions from gross settlement amount.

Maximum Settlement Amount . The maximum amount of a termination settlement may not exceed the sum of:

• Total contract price as reduced by:

The amount of any payments previously made, and The contract price of any work not terminated; plus Reasonable settlement costs , which are : costing, legal, , and other expenses which seem to be a compulsion for preparation of new settlement proposals and supporting contracts

The termination and settlement of subcontracts; and warehouse , logistics, and other incurred costs which are a compulsion for the preserving, protecting, or disposing

3 )

    The purpose of an equitable adjustment is to provide for any increases in the unit costs of the continued portion of the contract as a result of the reduction in volume. For example, start-up costs may not have been fully amortized at the time of the termination because of a significant decrease in volume, or the average labor hours necessary to produce each unit may not have decreased as anticipated because of learning or efficiency improvements.

Proposal for Equitable Adjustment.  The contractor may file a request with the for an equitable adjustment with the contractor for the continuing port of a stable price -contract partially terminated for the convenience of the Government. Any contractor proposal for an equitable adjustment must be submitted not more then 90 days from the applicable date of the partial termination unless the period is extended in writing by the contracting officer.

Cost Adjustment.  Consider a proposed equitable adjustment related to a partial termination following the same guidelines that you would follow when considering any other equitable adjustment.

Profit Adjustment.  Consider reasonable adjustments in contractor profit as part of the equitable adjustment.

Base profit analysis on the cost effects considered in the equitable adjustment.

Develop a profit objective considering the FAR profit factors and

applicable agency guidance.