Target date
IT agreements generally include a target date. The target date is usually referred to as the "go live date" or "release date." In principle, if a supplier has not delivered a software system after the target date has passed, it is not directly in breach of the contract. Nevertheless, if the deadline is significantly exceeded, the supplier may still be considered to be in default. For example, in a judgment of the District Court of Rotterdam[1] it was ruled that a delay of over a year was unreasonable. This supplier was given a deadline to remedy the 'imperfections in the software system' (i.e. bugs), on pain of a penalty payment.
Custom made software systems
Especially in the implementation of "custom made" software systems, target dates are usually found in IT agreements. Implementation processes of these types of software systems are usually complex; successful implementation requires cooperation and input from the customer. Because of this complexity, delays are foreseeable and you should take this into account as a customer.[2] A fatal deadline (see below) is therefore not so likely.
Tip #1: Original target date missed? Agree on a new deadline
Good contact with the supplier is important. Take stock together of the possible consequences of a delay. Once a delay has occurred, it is advisable to agree on a new delivery date. After all, implementation processes that muddle through for too long are not conducive to confidence in the software system and the supplier.
Deadline
The alternative to the target date is the fatal deadline. If a supplier exceeds a fatal deadline, he automatically defaults. In this case, you can in principle terminate the contract with the supplier (by means of rescission) and possibly claim damages, without first having to provide an opportunity for rectification. Insofar as the performance cannot be undone, compensation must be paid instead.
Tip 2: Explicitly state the nature of the delivery period
If you wish to include a deadline in an IT agreement, it is advisable to name it explicitly in the agreement. After all, without further explanation, a completion date in an IT agreement is usually considered a target date. By way of illustration, a provision containing a fatal deadline can be worded as follows:
"The software system will be delivered on date X. This delivery date is a deadline, or a final delivery date. After the expiration of this delivery period, the supplier shall be in default by operation of law, without prior notice of default."
Probably only the supplier of a simple SaaS solution, a software system generally delivered in standard packages, will agree to a fatal deadline. Indeed, delivery of a SaaS solution is compared to a "custom made" software system many times easier, because the SaaS solution is generally delivered to the customer in standard packages (think for example of the office package Office 365, Hosted Exchange or the CRM package Exact Online).
Tip 3: Attach consequences for exceeding a fatal deadline
If a supplier exceeds a fatal deadline, you must face consequences. Otherwise, your right to terminate the contract and the right to claim damages is forfeited.[3] This is particularly common in situations where the supplier is repeatedly given the opportunity to fully comply and the implementation process therefore continues to "muddle through" for too long and the fatal nature of the delivery deadline lapses.[4]
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[1] Rb Rotterdam on August 14, 2017, ECLI:NL:RBROT:2017:6180, r.o. 4.3.
[2] Court of Appeal of 's-Hertogenbosch on November 3, 2015, ECLI:NL:GHSHE:2015:4428 r.o. 3.7.1.
[3] Amsterdam Court of Appeal on Jan. 24, 2017, ECLI:NL:GHAMS:2017:200, para. 3.3.
[4] Rb Den Haag on Dec. 24, ECLI:NL:RBDHA:2014:16568, r.o. 4.20.
