This is the first in a series of three articles addressing how to manage legal risks associated with implementing new software systems. All three articles will be based upon the same hypothetical case. GoodHealth, a medical center, has entered into a license agreement and implementation agreement with SoftwareCo to implement ChartX, SoftwareCo’s new product. ChartX is designed to collect clinical and cost data with respect to individual patients and is to be used by clinical and accounting personnel to treat and bill patients. During user acceptance testing, GoodHealth discovers that the response time for retrieving and inputting clinical data is too slow and the cost data is inaccurate. In addition, the cost of implementing the software has exceeded budget estimates, and the project is badly delayed. This article will discuss techniques for getting the project back on track without litigation and, in case litigation cannot be avoided, creating favorable evidence that will help in recovering damages.
The first challenge is the absence of performance criteria in the agreements. The implementation agreement states only that the parties will agree upon reasonable user acceptance criteria in the future. The acceptance criteria developed before testing address only functionality (how the software will operate) and not performance (how fast it will perform functions under various loads). GoodHealth had assumed that the software would scale and provide nearly instantaneous response times like most computer programs.
