Software providers and IT consultants: Be careful to what you agree to, even in the absence of a written agreement.

In a recent ruling by the Court of Appeals of Grenoble (CA. Grenoble, June 4, 2015, n°2009J386), the company CIMM Franchise, which exploits a network of 120 real estate agencies, ordered from the consulting company E-Développement Conseil the creation of software to improve the management of its assets. E-Développement Conseil entrusted the conception of such software to a company called 3C Evolution.

It should be noted that no agreement or technical specifications were formalized in order to detail the missions of both providers or the conditions of the software’s creation.

However, meeting minutes helped establishing that the parties decided the software to be delivered on January 2008.

The ordered software was finally delivered in June 2008, and showed many malfunctions, making it unfit for use. CIMM Franchise consequently decided to sue both providers in order to have the agreements terminated, to be reimbursed for all sums already paid, and to be granted damages.

The Court of Appeals of Grenoble, considering that:

• the developer had breached its obligations by not respecting the delivery date, such an obligation being an obligation of results, even in the absence of an agreement or of technical specifications;

• the developer had also breached its obligations by not providing software conforming to the client’s needs, such an obligation being an obligation of results as well, even in the absence of an agreement or of technical specifications;

• the consulting company had breached its obligation of counseling because, on the one hand, they did not organize a call for bids before selecting the developer and therefore did not assess its competency and, on the other hand, had not detailed the technical specifications expressing the needs of the client,

decided to terminate the agreements to the exclusive fault of both service providers and to order the reimbursement of the down payments. However the court refused to grant damages.

Clearly, the lack of written agreements proved to be detrimental to the two service providers.[:]