This is the last in a series of three articles that address how to prevent and resolve software implementation disputes. The first article considered proactive measures that could get the project back on track without litigation. The second article discussed aspects of litigating a dispute. This article will provide ideas on how to use contract provisions to reduce the risk of disputes and increase the likelihood of a fair result in litigation.
Our hypothetical transaction involves a medical center (GoodHealth) licensing SoftwareCo’s software (ChartX) to input and retrieve clinical and cost data for patients. As described in the previous articles, the software performed too slowly to be usable and produced inaccurate cost data. SoftwareCo blamed GoodHealth for failing to provide accurate information to assist in the integration of the systems. SoftwareCo also argued that it never agreed to the performance criteria that GoodHealth proposed after the contracts were executed and that performance was slowed by required customization. As to damages, SoftwareCo contended that its implementation work met industry standards so even if the standard software was somehow defective, the only damage recoverable was the license fee, which was a fraction of what GoodHealth paid SoftwareCo and others to implement ChartX.
