Software Development Goes Awry When the Underlying Agreement Is Ambiguous
Technology Law columnists Richard Raysman and Peter Brown write: one of the law’s most important functions is to resolve interpretative problems created by the use of ambiguous language in contracts; however, by the time a court is deciding the issue, costly litigation may have taken years. In a recent case in Pennsylvania, parties to a software development and license agreement confronted this unfortunate truth, and both left unsatisfied.
By Richard Raysman and Peter Brown|March 12, 2018 at 02:45 PM
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Ambiguity is one of the worst fears of a contract drafter. Despite good intentions, invariably contract terms will be capable of being understood in more than one way, or are simply doubtful, equivocal, uncertain or absent. A seminal treatise on “The Language of the Law” began: “The law is a profession of words.” Unsurprisingly then, one of the law’s most important functions is to resolve interpretative problems created by the use of ambiguous language in contracts; however, by the time a court is deciding the issue, costly litigation may have taken years. In a recent case in Pennsylvania, parties to a software development and license agreement confronted this unfortunate truth, and both left unsatisfied. See Apacheta Corp.v. Lincare, Inc., No. 16-2030, 2017 WL 5901085 (E.D. Pa. Nov. 30, 2017). In this case, a dispute over software deliverables led to litigation in which the court denied both parties’ motion for summary judgment because the ambiguity in the underlying agreement created an issue of fact as to what the developer was required to deliver, and if the developer made a sufficient delivery, its entitlement to damages.
"At my firm, and with clients, I teach Marginal Gains as a helpful way of detecting process flaws and correcting them. Greatly summarized, this means unpacking the process, examining each aspect of it, evaluating these findings, and then making corrections."
Parties who wish to avoid unintended consequences – either paying for intra-party indemnification when it was not intended or being denied indemnification when intra-party indemnification was intended – should be explicit as to their intentions in their contract.
On Feb. 15, 2018, the New York Court of Appeals, in Dormitory Authority of the State of New York v. Samson Constr. Co., 2018 NY Slip Op. 01115, issued a significant opinion discussing contract third-party beneficiaries and duplication of causes of action in contract and malpractice.
In this No-Fault Insurance Wrap-Up, David M. Barshay explains the statute of limitations for an action to recover no-fault insurance benefits against a self-insured. He also looks at motions to sever purportedly unrelated claims.
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