Texas Federal Court Produces a Split Decision in Software Development Agreement Dispute
A federal court in Texas recently decided that the progress (or lack thereof) concerning a software development agreement cannot be obscured by allegedly fraudulent statements, nor can breach be excused simply because the developer encounters what it claims as unforeseen technological hurdles. In their Technology Law column, Richard Raysman and Peter Brown discuss the split result reached by the court inasmuch as the court denied the software developer's motion to dismiss the software provider's breach of contract claim and denied in part the provider's fraud claims.
November 08, 2019 at 12:00 PM
6 minute read
The original version of this story was published on New York Law Journal
Setting realistic timelines for development and sale is integral to any successful software-related agreement, whether it be a licensing agreement, services agreement, consulting agreement, or otherwise. It is understandable that deadlines will change and costs will increase, particularly in an ever-changing technological environment. For that reason (among others), statements of work and iterative deliverables are often part and parcel of a software development agreement.
However, as a federal court in Texas recently decided, the progress (or lack thereof) concerning a software development agreement cannot be obscured by allegedly fraudulent statements, nor can breach be excused simply because the developer encounters what it claims as unforeseen technological hurdles. See Polar Pro Filters v. Frogslayer, No. 19-1706 (S.D. Tex. Oct. 22, 2019).
This column focuses on the split result reached by the court inasmuch as the court denied the software developer's motion to dismiss the software provider's breach of contract claim and denied in part the provider's fraud claims.
Facts and Procedural History
As alleged by its complaint, plaintiff Polar Pro Filters creates and sells software for devices, including drones and smartphones. In August 2017, Polar Pro contacted defendant Frogslayer, a software developer, to explore the joint creation of a video editing program. Frogslayer represented to Polar Pro that it had expertise in video editing and other media-specific businesses.
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