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Addressing a breach of contract litigation over software

On Behalf of | Jun 3, 2024 | Software Litigation

Software agreements are fundamental to the functioning of many businesses across various industries. Still, disputes sometimes arise, and one common cause for software litigation is a breach of contract. Here are some critical aspects of software litigation related to breach of contract, which should provide insight into how businesses can better prepare for and manage such disputes.

What constitutes a breach of contract in software litigation?

A contract breach happens when one or more parties involved in a legal agreement fail to fulfill their duties outlined in the contract. In the context of software, this can happen in several ways. Common examples include:

  • Fails to deliver a software product on time
  • Delivers software that does not meet the agreed specifications
  • Fails to provide proper support and maintenance as stipulated in the contract

As with any contract breach, understanding the specifics of the contract is essential. Software contracts often include detailed clauses that cover the scope of work, deadlines, performance criteria and terms of maintenance and support. A breach might be considered material if it results in significant harm to the receiving party, potentially leading to a lawsuit.

Legal remedies for breach of contract

There are several legal remedies available to the aggrieved party. These remedies aim to either enforce the contract or compensate the harmed party:

  • Damages: The most common remedy, damages are monetary compensation paid by the breaching party to the non-breaching party. These can include compensation that puts the injured party in the position they would be if the breach not occurred, and punitive damages, intended to punish wrongful behavior.
  • Specific performance: Occasionally, especially when damages are inadequate to solve the issue, a judge may order the breaching party to perform its obligations as outlined in the contract.
  • Rescission: This remedy involves the cancellation of the contract, leaving both parties back where they started.
  • Reformation: This remedy allows the parties to rewrite the contract to reflect the intentions of both parties better.

Legal guidance is usually essential

Software litigation due to breach of contract can be complex and costly. When conflicts arise, a lawyer focused on this type of litigation can help clients understand all the available legal remedies, thus enabling businesses to navigate the challenges of software litigation more confidently and effectively.