Last year’s decision of the Technology & Construction Court (TCC) in Anglo Group v Winther Brown has important practical implications for disputes involving standard package software systems, which are increasingly used by businesses for essential commercial functions.
In particular, the decision is likely to be greeted with relief by beleaguered IT suppliers that have, until now, almost invariably suffered in IT litigation in the courts. Both IT suppliers and users should note the ruling and its implications.
The dispute and decision
Winther Brown (WB) was a distributor and reseller of wooden mouldings and contracted with BML to obtain a business management software package called Charisma, designed for distribution companies. The system was financed through an agreement with Anglo Group (AG). After the system had been installed and was operating for some time, WB made a number of complaints alleging that it was operating defectively and stopped paying instalments due under the lease agreement with AG. AG subsequently sued for damages. WB’s defence was that the system was defective and AG was also in breach of an implied term in the leasing agreement that the system was fit for purpose.
In deciding in favour of AG and dismissing the defence of WB, the court (Judge Toulmin QC) made some clear statements that might well be relied upon by IT suppliers in similar circumstances. The court commented:
