Who should pay for repairs to software?

It often happens that software is defective or does not work as expected. This often requires additional work to get the software working. But who should pay the costs?

Who pays for these costs depends in principle on the mutual agreements. As a customer, you cannot simply recover repair costs from the software supplier. This was ruled by the District Court of Noord-Holland (ECLI:NL:RBNHO:2021:5275) in July 2021 in proceedings in which a software developer claimed payment of its invoices concerning implementation and repair costs.

What was going on?

In this matter, a software developer had delivered and then implemented a software program to an e-commerce client. A total of six invoices were sent for this purpose. The first two invoices were duly paid by the customer. The last four remained unpaid, in part because the customer claimed that the software would not work properly and it would not be liable to pay the invoiced repairs. The software developer disagrees and wants to see payment of its invoices. It starts court proceedings to get that done. 

What does the software developer claim?

In the proceedings before the District Court of Northern Netherlands, the software supplier claimed that the customer should be ordered to pay the outstanding invoices. It bases this - in brief - on the fact that it has performed work on the basis of the agreement concluded between the parties. The customer has not paid part of these invoices despite summonses.

Client's defense and counterclaim

The customer disputes the software developer's claim. The customer argues that it is not obliged to pay the invoices that refer to implementation costs because they were not included in the quotation. In addition, it argues that the software never worked properly, that it complained about this several times, and therefore it is not liable for repair costs. In fact, as a counterclaim, she argues that the software developer owes her a sum of money because there was allegedly a breach of contract. This is because the software developer allegedly failed to perform the contract by delivering a program that did not work properly. The customer therefore claims repayment of the invoices already paid. 

What does the court rule?

The court rejected the customer's defense that the software would not work properly. Indeed, at the hearing, the software developer sufficiently explained and substantiated that it delivered sound software. This was of course disputed by the customer, but the court is of the opinion that the customer did not sufficiently prove that the software did not meet the set requirements. It could have done so, for example, based on findings by an expert, but failed to do so. In addition, the customer should have put the software supplier in default, after which the agreement could possibly be terminated. The customer also failed to do this. That the customer would not have to pay implementation costs is also incorrect according to the court. Sufficient evidence for this can be found in the quotation. The judge is also of the opinion that the customer must pay the costs for the repairs. Although she had taken out a service subscription, the repairs were not covered by the service subscription. This is because the repair work carried out concerned the coupling of the supplied software with the customer's equipment and not the software itself. The court ruled that the customer was still obliged to pay the outstanding invoices.

Practical tips for practice

The moment agreements are made regarding the supply and implementation of software, it is important that these agreements are put clearly on paper. This may seem obvious, but a vague or incomplete formulation of the agreements can lead to disagreements and even nasty disputes. It must be clear which activities are covered by the agreement and which are not. A misunderstanding about who is responsible for what and who pays what costs must be avoided. Both parties will have their own ideas in this regard, which is why it is advisable to lay down as much as possible explicitly.

Do you have questions about drafting software agreements or a dispute regarding delivered software? Ask them to one of our specialists Valerie Lipman and Joost van Dongen.

This page was last updated on August 8, 2023.