These differences are often very subtle and fact specific, but the remedies for each are vastly different. In the case of a breach of contract, a harmed party’s damages are typically limited – by law or by the terms of the contract itself. And depending on the contract’s language, the harmed party may remain bound by some or all of its terms. But with fraud, a harmed party has the option to void the contract and potentially seek broader damages.
A real-life example
But what do these different issues look like in real life? Although contract and fraud issues can arise in any setting, for purposes of illustration, we will consider a technology issue – specifically, software.
Businesses depend on expensive software to streamline operations, meet regulatory requirements and ensure employees in multiple locations can collaborate. While enterprise software can increase efficiency and profits, implementations are costly, complex, time consuming, daunting and sometimes problematic.
When implementation does not go smoothly, a software company may point fingers at the customer, possibly alleging the customer’s staff is not competent, management overestimated the product’s utility, or management is preventing completion of implementation. Engineers could deny problems exist with their software and recommend customers hire implementation professionals at additional expense. Any of these allegations could be valid; however, businesses should investigate and determine the true cause of the issue.
Software companies often have extensive contracts that attempt to mitigate their culpability for misconduct. Some software companies oversell products or implementation services that fail to deliver the anticipated value for the time and money invested. Others tout their dedicated, local experts and availability of on-site help when in reality their “experts” are remote and unqualified.
If a software company tells a customer its program will help streamline accounting functions but it does not work quite as expected, that is probably not fraud. If, on the other hand, a software company falsely claims that its product will work within a customer’s existing accounting and payroll systems, then the customer may have been defrauded and it might be worth litigating.
If you find yourself in a bad contract, it is important to understand your options. We are well versed in these highly complex cases and have a record of success litigating them. Additionally, our streamlined structure affords us greater flexibility than other firms to create customized billing solutions—a win-win. We can help determine who is at fault, what your legal options are and evaluate whether there is a reasonable and cost-effective way to pursue recovery of funds.
For more information, contact us at (248) 432-1586, [email protected]mslaw.com or [email protected].