Contracts and management of IT projects

General Terms and Conditions & IT service provider’s duty of care to advise

In a decision held on 16 October 2015, the Court of Appeal of Paris terminated a performance contract relating to the development of an e-commerce site, owing to the fact that the service provider failed in his duty of advice thereby rendering the services provided as inadequate to the client’s true needs.

The matter in question concerned performance improvement of an online shop – the modes of payment being the contested functionality.

The Court of Appeal held that the service provider, bound by his duty to advise, is bound to inform the client:

“not only of the limits of the service performance and thus the restrictions concerning the functionalities of the software […] but he is equally bound to look into his client’s needs and aid him in voicing those needs so as to orientate him best as to those needs, informing him, where appropriate, the need to contract with a third party so as to obtain the functionality in question.”

The aforementioned obligation is nevertheless so, even where the General Terms and Condition, which are annexed to the purchase order, foresee client’s duty to specify his needs.

The Court of Appeal held that the said clause did not so much intend to restrict the service provider’s duty to advise, but to confine his respective obligations so as to conform to the specific needs of the client.

The Court ended up rejecting the service provider’s claim for payment, ordering a refund of the sums received by virtue of the contract.

To read the decision (french)

IBA – Annual conference 2015

Anne-Sophie POGGI is speaker of a round table dedicated to open source licenses “Open and closed source licensing; share and share alike” at the next annual conference of the International Bar Association in Vienna from 4th to 9th of October 2015.

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