Software development and customer relations from the point of view of a lawyer

  • Tutorial

IT and software companies often face a situation where a client, just like the former, violates the terms of payment or puts forward new requirements at each stage of the project, making the process of completion endless. You start to get angry, they start to get angry. But in the end it turns out that everything is your fault: it was you who dragged on all the deadlines and it was you who would be left without money. And they, having taken all the things operating time, go to another.
The trouble is that you yourself are to blame. Omissions in the contract or in the work with the client itself can lead to the fact that it will be difficult or even impossible to protect one’s rights even in court.

We will analyze the main mistakes made by development companies.

1. The subject of the contract is not defined
The subject of the contract is exactly what the customer’s lawyers will poke your nose into!
You can calculate them. Here's an example: “The Contractor is developing a website for the Customer” or “The Contractor is providing software development services”.
However, from all these speech turns it is difficult to understand what specific software is being developed and what specific requirements are placed on it by the parties.
Blurry wording - that's what it's called!
Such an agreement can be recognized as not concluded (which means that you can forget about your money). If no one has poked you at this point before the judge, the latter will do it easily and naturally. For example, like this:
“The court of first instance found that the subject of the contract was not defined by the parties, since the contract contains a general phrase about the execution by the respondent of work on the development of the website; the name of the site, its contents, the location address on the Internet in the text of the contract are not available, it is impossible to establish which website the respondent undertook to develop for the plaintiff, it is not possible to determine the start and end dates for the defendant to complete the work from the text of the contract and appendix No. 1 to it ”(Resolution of 08.15.2014 in case No. A19-16165 / 2013).

It will be difficult to convince him ... But there is a chance! Fortunately for us, not all courts adhere to this position. In another decision, the court noted:
“The issue of non-conclusion of a contract due to the uncertainty of its subject and timing of work, the lack of technical specifications for the development of this site should be discussed before its execution, since the uncertainty of these conditions may lead to the inability to execute the contract. If the contract is fulfilled, these conditions are not considered inconsistent, and the contract is not concluded in the executed part ”(Resolution in the case No. A32-22518 / 2013 of 06/27/2014 15th AAC).

It is precisely because of such vagueness in the contract that the customer has the right to make constant demands on the finalization of the product when receiving the result of work (and all because specific quality requirements are not defined in the contract). Thus we come to the next point.

2. Requirements for acceptance of the result of work are not established.
If the contract does not describe a clear procedure for acceptance of work, then it will be difficult to prove that you are not a cheburashka passed the result.
In an ideal contract, it is necessary to clearly state the procedure for presenting the result of work, the procedure for sending the act of services to the customer and the procedure for signing (accepting) the act by the customer.
Remember! It is a written document in most cases that will be a guarantee of payment for work.
Of course, you can prove the actual performance of work in the absence of documents, but this is more time-consuming and risky.
Well, here the main thing is to observe the agreed procedure yourself, otherwise the same paragraph will become a weighty argument against the artist, that is, you. Read more about this in the third paragraph.

3. The requirements for acceptance of work established by the contract are not complied with.
There are situations when the procedure for the transfer of the result of work in the contract is prescribed, but not complied with by the contractor. After all, are there?
With such a development of events, the fact that the transfer of the product did take place, will mean for the court as much as your word of honor.
So, in one of the decisions, the court indicated:
“... as follows from the materials of the case and the courts established that the fourth stage of the work was not accepted by the Entrepreneur due to his failure to open the site for general access. At the same time, the Company did not perform work on placing the site on the customer’s server in connection with the failure to submit IP Jabotin I. N. to the server and non-coordination of technical conditions. The approval options proposed by the contractor were rejected by the Entrepreneur ”(Resolution in the case No. A82-1396 / 2013 of 07.22.2014 FAS VVO).

Correspondence by e-mail and sending the result of work by e-mail are rarely recognized by the court as the proper fulfillment of obligations. In one of the cases, the court directly stated:
“... The Respondent, in confirmation of the fact that the contract was completed, submitted an e-mail correspondence between the customer (Claimant) and the contractor of Intek LLC (manager, designer).
The arbitral tribunal, evaluating the evidence presented by the defendant in support of the fact of work for the plaintiff, concludes that the defendant did not submit to the plaintiff the acts of work that would be signed both by the person transferring the result and by the person receiving the result , the specified evidence cannot be accepted as appropriate to confirm legally significant circumstances in the case - the fact of the performance of work and the transfer of the result in the prescribed manner; evidence of the direction of acts on acceptance of work performed or other notification of acceptance of results to the plaintiff by the defendant in the case file is not submitted (Article 65 of the Arbitration Procedure Code of the Russian Federation) ”(Decision in case No. A76-16845 / 2014 of 04/06/2015 AS Chelyabinsk region. )

No matter how much we worry about cutting down trees, an exchange of real papers is necessary. And you need to do it on time!

4. The obligation of the customer to provide information or documents is not fixed.
It is obvious that in order to create a quality product, the customer must provide information to the contractor. A delay in the provision of information entails a delay on the part of the contractor.
“They themselves are to blame!” - you will scream heart-rendingly in the courtroom, banging your heel on the chest, but all in vain. Because the contract did not spell out the obligation of the customer to provide specific information, which means that it would be impossible to refer to the customer’s failure to fulfill such obligation as the reason for violating the terms of the contract.

5. The contract is not approved in the manner prescribed by law
Do not forget that the contract for the development of software (site) by law can be a major transaction or a related party transaction, which means that it is necessary to follow the general procedure for approving transactions.
Otherwise, there is a risk of invalidation of the contract. So, in one of the cases, the court indicated:
“Given that the evidence in the case file does not show evidence of the use of LLC Klin Service as part of its business activities by the software developed by D. G. Reshetnikov, the court finds that the defendant’s argument (D. G. Reshetnikov .) that the disputed transactions were concluded as part of ordinary economic activity, since they were concluded as part of the activity that is prescribed by the charter of the company, cannot clearly indicate the conclusion of the disputed transactions ordinary course of business, taking into account items disputed contracts: execution of works on preparation of technical specifications for the software development of the project "Management of freight"

That is why it is necessary to ask for a copy of the charter of the customer and carefully read the points that will relate to the sphere of activity of the customer in which you are going to restore beauty and order. But we always have no time to engage in such nonsense, we need to get a prepayment sooner! So we come to the most “delicious” in our article.

6. The contract is not signed.
We have prepared a contract. They sent it to the customer, but ... Where is the second copy? Was there a boy?
The absence of a contract is likely to prevent debt collection. The fact that the contract was sent by e-mail, but not signed (the scan can save, so it also needs to be done) will not be accepted by the court.
Considering one of the cases, the court directly indicated:
“As follows from the case file, the defendant, objecting to the satisfaction of the claims, referred to the actual performance by the A-68 company of work on the development of the site on the instructions of the plaintiff in the framework of the contract dated December 13, 2012 No. 2012-12-13-1.
Since the disputed contract was not signed by the plaintiff, the defendant’s reference to this document as the basis for the emergence of the relevant rights and obligations of the parties was not lawfully adopted by the court of first instance ”(Resolution in case No. A33-17884 / 2013 of 08.08.2014 3rd AAS).

Do not neglect the rules for concluding a contract, and then you can protect your interests ... It is likely that the matter will not reach the court.
Good luck

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Have you encountered similar problems?

  • 55.2% Yes. It was a deal ... 21
  • 36.8% None. But what happens? 14
  • 10.5% Yes! Here, just the other day! 4

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