Business creditor demand / contract

[blue1]

A business took a contract out for some software to assist the running of the retail business. The software was paid for monthly and every month it was necessary to phone the company up to go through securities after making the monthly installment in order to continue using it. The software proved to be very complicated and the business did not use it to its full potential,only a very small part of it as it did not meet their requirements and it was frustrating having to phone up for assistance all the time and also get it activated every month to use the small section they did use. It was also costly. Whilst there was a contract, and under normal circumstances the business are in breach of this by not paying, the fact that the company prevented the business using the software anyway because it was not activated -would the business still be liable for the payments as theoretically no service/goods were being supplied?

[teaboy2]

Re: Business creditor demand / contract

Like all business to business contracts it depends on the terms of the contract - It is likely that one term covered the fact that you had to phone them to re-activate the software each month. Though i have never come across such requirement before as normally it should remain active and most suppliers have an automated system that will simply deactivate a software package should payment not be received. But then it depends on what the software is used for and whether it needs and internet connection to be used or not. If not, then its perfectly reasonable for the software to be program to need to be reactivated each month if it is subscription based purchase.

Now its also likely the contract was for a minimum amount of months, say 12 months for example. Where after the last month of the contract it becomes a rolling contract unless stated otherwise in the original contract. Where by you can cancel by giving notice. usually 30 days.

But without seeing a copy of the contract there is no way i or anyone can advise you with 100% accurate advice am afraid.

[blue1]

Re: Business creditor demand / contract

Thank you, I have asked for a copy of the contract, seems a grey area with them having such control and theoretically the business has not had a service/product available from the software company, so if they had to pay for the months they didnt use it they should have had the activation required for this time to enable its use surely.....

[teaboy2]

Re: Business creditor demand / contract

It depends, as they may have covered themselves with a clause in the contract entitling them to the monthly payments even when the product or service is not activated