In addition to ensuring the proper functioning of the software, the supplier shall also monitor the effective use of licenses, under penalty of failing in its duty to cooperate
Elisa Mombelli *
December 10, 2014 – 8:05 a.m.
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serious flaws that compromise the installation and operation of a software – and frequent problem in the acquisition of ERP – can be resolved amicably between the contracting parties during the implementation of the new system. Deadlines and values can be changed in order that the contract be upheld and the result is achieved
However, if it is no longer viable show. – Given the seriousness of the problems and delays in the solution – appropriate way will be the termination of the contract and the compensation in court. In certain situations, the error and fault history wearing the relationship between the parties to such an extent that complete implementation is no longer the contractor’s interest. In this case, seek help of the judiciary is less costly and more beneficial than it seems.
The termination by the courts can overcome even alternative solutions such as arbitration. First, because the cost of an action is much lower than resort to an arbitration chamber. Second, the evidence that the installation was not carried out by the contractor’s fault will determine the success of the action, which depends much more on the precautions taken during installation than the technical expertise of an arbitrator. Thus, the evidence presented by the author will have fundamental importance in the termination of the contract, and are directly reflected in a positive decision at the end of the action.
So, any registration failures and misunderstandings should be documented to along the interface. This includes everything from contract amendments to the e-mails exchanged during the implementation of software, through meeting minutes, reports, technical support calls and error logging. It is also important to show if there was need to hire new workers, or increase working hours, to correct the problems encountered during installation.
As for the legal basis of the initial application, number of accepted theories of contract doctrine justify the termination of the contract and compensation for losses. The Theory of Early Failure of the Contract, for example, has important application in the event that the termination is sought before the implementation deadline. These are situations in which the contract has not yet reached the final term, but over the relationship becomes clear that the supplier will never be able to complete the installation within hired.
Developed by renowned scholars as Judith Martins Costa, the thesis permits early termination when there are clear and unambiguous signs that the implementation of the software will not succeed. This premature breach of contract by the supplier’s fault, forces him to indemnify the losses and profits, even if the contractor suffered losses in sales during the installation, when to do the survey.
Another doctrine that justifies the termination is defective performance of the contract. The thesis is applicable when the provision, although delivered, is not satisfactory: the software does not meet the purpose for which it was acquired. That is, although the installation is complete, the system does not meet the need of the company, due to constant failures and errors. In this case, the buyer has the right to seek compensation, either in the form of a reduction of the agreed value, or with the refund of amounts paid, if no longer of interest to use the new system.
Yet the dissatisfaction of the creditor should be checked with objective standards, and offset by compensation for the damage. Not only the defective delivery, but also the delay in completion of the installation may render unnecessary the acquisition, which justifies the contractor to pay the refund of amounts paid, the payment of the fine provided for in the contract and reimbursement of losses.
In the Brazilian courts, there are numerous cases of termination of software contracts, and some of them are worth mentioning. In Case No. 9192069-91.2009.8.26.0000, for example, the existence of “bugs” in the system and the delay in completing the project led to the condemnation of suppliers to the full repayment of the amounts received, as well as the expenses of the migration of the previous data system. In this case, both the software manufacturer and the company responsible for the installation were ordered jointly and severally.
In the process no 0106311-45.2005.8.26.0000, the court found that the collection of the license and software maintenance is subject to the proper discharge of their functions. As in this case the software failed to achieve the intended goals, the contractor was required to pay.
Finally, in addition to ensuring the proper functioning of the software, the supplier shall also monitor the effective use of licenses, under penalty failing in its duty to cooperate. In Case No. 01936-3.2013.8.26.0002, tried in São Paulo, the supplier has lost the right to charge two years of maintenance, due to the acquirer have not installed and used much less the software.
It can be seen in the above trial, to seek termination of the contract and compensation of losses through the courts – contrary to preach common sense – is fast and efficient. The recovery of credits because of the technical proposal of the breach of the terms of the contract or SLA (service level agreement) can be made in the judiciary, the most appropriate solution when problems come to compromise even the relationship between IT and the legal department. Saves not only the contract and the amounts invested, but also the internal balance of the team, indispensable for the proper functioning of the company.
* Elisa Mombelli specializes in Law and Technology and a member of office Assisi and Mendes
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