Justice increases the responsibility of computer consultants

A judge sets a precedent and punishes a multinational that interrupted a SAP ERP implementation process and considers it to be abandoned. Thus, computer consultants may be required to obtain the result of the contract.

Justice increases the responsibilities of computer consultants. A Court of First Instance of Vitoria has declared unlawful the conduct of a large IT consulting company that had been entrusted with the implementation of a computerized implementation of the well-known SAP ERP business management program and has qualified as "abandonment of work" illicit the non-termination of the program, setting an important precedent about the always controversial issue regarding the nature and legal regime applicable to this type of computer projects.

As stated in the judgment, the computer implementation project, commissioned by an industrial company to a major multinational computer consultancy, had been regulated in a contract signed in 2005.

Analysis

This contract had the double purpose of, on the one hand, carrying out an analysis of the work done by a previous implant and of the business processes and the needs of the client company, and, on the other hand, carrying out the finalization of the implementation and the delivery of the SAP ERP program appropriate to the business processes and the needs of the client company according to the result of the previous analysis phase.

During the procedure, the legal nature of the contract in question had been discussed, an aspect that is always debated in this type of controversy, since the treatment of the responsibility of the computer consulting company in the case depends to a great extent on the case, not infrequent , of failure or disagreement regarding the result of the implantation. On this point, the ruling is pronounced conclusively concluding that, as regards the realization and delivery of the computerized implementation, there is no doubt that it is a contract for the lease of work and not a mere contract of services , as the consultant maintained, and this regardless of the denomination granted by the parties to the contract.

As a result of this qualification, the judgment concludes that, compared to what happens in the case of service contracts, the work contract obliged the consultant to make and deliver a result, regardless of the work or services that create it, result consisting of perfect, non-defective compliance, which in any case is adjusted to the needs of the client company, and always within the agreed period (the latter is also considered 'essential').

Delays

In the case in question, the consultant, after several delays occurred and renegotiations of the term and price of the contract, finally ended up renouncing the project, in what the judgment qualifies, in line with the above, as a "abandonment of work", that, at the request of the client company, is expressly declared unlawful.

The consultant justified the abandonment alleging three reasons: the treatment that the client company would have given to the computer consultants (which would have caused a high turnover of the consultant's staff), the bad performance of an independent consultant of the SAP company incorporated into the project and from another consulting company that also participated, and the existence of a multitude of changes in the scope of the project that the client had unduly requested.

The judgment considers, however, that none of these three alleged grounds had taken place, rejecting the consultant's assertions in this regard and stating that the client company had complied with the "duty of collaboration of the owner of the work" despite the disagreements between the parties.

Declared the illegality of the "abandonment of work", the judgment analyzes the damages claimed by the client company, granting it the amount that the parties had agreed in the contract as a criminal clause, and rejecting other amounts claimed for not considering the intended damage.

On the other hand, the judgment also examines the request of the consulting company to be paid the changes or extensions of requirements that alleged that had occurred at the request of the client company, and concludes that, in the case of a contract for the lease of work with a lump sum price, and this being an essential element of the work contract, the client company was not obliged to pay any of the alleged changes insofar as they had not been agreed upon by the parties.

Differences between the works or services contract

The Civil Code establishes in article 1544 that in the works or services contract, one of the parties is obliged to execute a work or to provide the other with a service for a certain price.

The article jointly defines the lease of works and services, and subsequently (arts. 5883 et seq.), One or the other type is regulated separately, the criteria to distinguish them must be deduced from said regulation.

The jurisprudence has handled several criteria, but prevails that considers that in the contract for the provision of services an activity is due, without taking directly into account the result of the service, while in the execution of work the object of the benefit due is the final result, regardless of the work necessary to achieve it.

'Notice for navigators'

This ruling constitutes a significant precedent regarding the nature of computer implementation contracts, which, when classified as work leases, imply a series of important responsibilities for the IT consulting company in the event that the result is not achieved. perfect that the client expects according to their needs, or that the achievement of this result can only be obtained through operations and work not foreseen or initially budgeted by the consultant.

The law firm Bird & amp; Bird, who represented the client company in this case, has declined to comment on the ruling because the case is sub judice, pending appeal to the Provincial Court of Álava.

There is no doubt, however, that you feel an important precedent in a dynamic sector in which, from the outset, Justice has decided to determine that the relationship between IT consultancies and their clients when implementing programs in their systems it is the one that governs a contract of work and not of services, all this, independently of the denomination granted by the parties to the contract.

Also, once declared illegal the "abandonment of work", the judge analyzes the damages claimed by the client company, giving it the amount that the parties had agreed to in the contract as a penalty clause.

Thus, the work contract required "and the path is opened to force" the consultant to make and deliver a result, regardless of the work or services that create it, a result that consists of perfect, non-defective compliance, that in any case fits the needs of the client company, and always within the agreed period (this last element, which concerns time, is also considered "essential").