In this guide, our business dispute solicitors discuss what business owners should do if they believe their software provider has breached a software licence agreement. We consider the early warning signs that a provider is not delivering and the practical steps you can take to resolve a dispute if one arises. We will also cover the type of evidence to collect, the remedies that may be available to you, and offer practical guidance on how to reduce the risk of disputes in the future.
If you are reading this guide because you need expert advice or urgent support with a software licence dispute, contact our experienced team of business dispute solicitors. We will handle the details of your case, providing practical, clear advice and working to resolve the issue quickly and effectively.
Contents:
- How do I know if my software provider has breached our software licence agreement?
- What should you do if you are involved in a dispute with your software provider?
- What evidence should I gather to support my position?
- What are the remedies if my software provider is at fault?
- How can I avoid software licence disputes in the future?
- Summary
How do I know if my software provider has breached our software licence agreement?
Business owners are often the first to recognise subtle shifts in their software provider’s service. This may show up as slower response times from support, persistent bugs, or unexpected downtime. When your provider fails to meet agreed performance indicators, like guaranteed uptime or response benchmarks, these persistent failures may mark the beginnings of a contract breach. Some contracts include terms that allow termination for numerous or long-lasting breaches, even if the type of breaches on their own do not trigger termination under other clauses.
Another red flag is when promised features are missing, underdeveloped, or non-functional. Perhaps you selected the software because it included a critical tool, but this fails to materialise, or doesn’t work as promised. In these cases, you should revisit your agreement to see if these features are specifically listed as part of your deal. If they are, the software provider may be in breach of contract for failing to supply the features or supplying features that do not work as they should.
Implementation delays can also cause significant issues. If your provider misses key milestones during a project, especially where the launch date is time sensitive, you may be experiencing more than a temporary hiccup. Repeated missed deadlines without satisfactory explanations can indicate poor project management or, worse, a lack of resources. Depending on the terms of the contract, failing to deliver the service on time may constitute a breach of contract by the supplier.
Changes in core service terms or pricing made without your express agreement can also constitute a breach. For instance, if your provider attempts to introduce new charges or adjust how your business accesses the platform without notice, or if there are surprise increases at renewal, you may have grounds for a dispute, especially if your contract requires mutual consent for such changes. A software supplier generally cannot increase its prices without your consent unless it is expressly permitted to do so under the contract.
Auto-renewal of contracts or failures to process cancellation requests can catch businesses off guard. You might notify your provider of your intent to cancel, but your request is ignored or denied, and you are involuntarily renewed into a new term, sometimes at higher rates. If your notice periods and rights to cancel are spelled out in your contract and your provider disregards them, this could be a breach.
Where you suspect a breach, you or your business dispute solicitor should review your contract. Take a careful look at what level of service, features, or support was promised. Assess whether the contract allows your provider to unilaterally make certain changes. Look for any clauses distinguishing minor breaches from “material” ones, these distinctions are important, because only a material breach is likely to give you the right to terminate early or access certain remedies.
What should you do if you are involved in a dispute with your software provider?
If doubts arise, your first instinct might be to stop using the software or withhold payment. Ceasing to make payments under the contract may place you in breach of contract and vulnerable to a claim by the supplier. You should continue to pay your invoices while seeking legal advice on your position.
Making a formal written complaint is usually a better opening move. Setting out the problem clearly in writing demonstrates that you are serious and provides a record of your attempts to resolve the situation. Outline the specific failings, refer to the relevant parts of the contract, and state what you expect by way of response or remedy. Letters of this nature usually have more impact if they come from a reputable law firm, like ours.
You should always check your contract before taking any formal action in connection with a software dispute. Many software agreements contain dispute resolution clauses, which detail a particular process the parties must follow if a dispute arises. For example, you may need to give notice of the dispute within a specific timeframe, and you may need to explore negotiations and alternative dispute resolution before court action can be taken. Failure to follow the correct procedure can severely prejudice your case and place you in breach of contract. Seeking expert legal advice as soon as an issue arises will prevent you from doing anything that may prejudice your position and impact your ability to pursue the software provider for breach.
What evidence should I gather to support my position?
Gather copies of all relevant documentation, including: correspondence between you and the supplier before you entered into the contract, the master agreement, all schedules or annexes, contract amendments, any renewal or cancellation correspondence, and any other relevant correspondence detailing the issue.
Retain all emails, help desk tickets, and written complaints. These show the timeline of issues raised and your efforts to resolve them. Many platforms automatically generate service reports or logs, such as downtime statistics or records of support interactions.
Maintaining your own log of incidents can be invaluable. This could be as simple as using a spreadsheet to track each occasion the software failed, the impact on your business, and your communication with the supplier. Dated screenshots, error messages, and documentation of recurring problems strengthen your claim, as do any supplier responses or acknowledgements of faults. Keeping details of any losses you incur as a result of the issue will also assist you in proving your case against the supplier.
Collecting this evidence not only supports your position in negotiation or litigation but often encourages suppliers to resolve matters once they realise you have a thorough and organised case.
What are the remedies if my software provider is at fault?
The right to remedy depends on the terms of your contract and the seriousness of the breach. In many cases, the most straightforward resolution is to ask the supplier to put things right, whether that means fixing bugs, rolling out missing features, or providing additional support to bring the service up to the promised level. Your contract may require you to first offer the supplier a reasonable period to remedy the problem before more drastic action can be taken.
Financial compensation may be available if you can show that the breach has caused you quantifiable loss, such as additional costs, lost revenue, or expenses incurred securing an alternative solution. Some contracts include pre-set compensation rules (known as service credits) for specific failings, but unless compensation is capped or expressly limited, you may have broader rights under the general law.
Where breaches are serious (or ‘material’) and go unremedied, you may have a right to terminate the agreement early. This could also entitle you to a refund for the unused portion of your licence or relieve you of any penalties for early exit. Always review your contract carefully before seeking to terminate, as wrongful termination can itself constitute a breach.
In severe cases, such as when critical systems are unavailable, or your provider’s failings create risk to your business or customers, you may have little choice but to source a new supplier. In these situations, costs associated with switching can sometimes be recoverable if they directly result from the provider’s breach.
How can I avoid software licence disputes in the future?
If you are negotiating the terms of your software licence, you should ensure that your legal position is properly protected. For example, it is usually a good idea to include termination rights. Consulting with business dispute solicitors is the easiest way to make sure the licence is not weighted too heavily in favour of the supplier.
If the terms of the licence are non-negotiable, there are some practical steps you can take to protect your position. For example, you should read reviews of the software to identify any issues that may become problematic. You should also take legal advice on the form of the licence, so you are clear on your rights and responsibilities under it.
Disputes are not always avoidable, but many can be prevented through sound contract management and proactive engagement with suppliers. Regular performance reviews allow you to identify potential issues. You should raise minor problems promptly in writing, so a pattern is documented, and escalation is easier if performance slips further.
Always keep written records of all interactions, particularly when raising concerns. This can be as simple as sending a recap email after a phone discussion or following up on resolved tickets with a summary of the solution.
Be mindful of renewal and cancellation periods. Setting reminders for renewal dates allows you to assess your options, renegotiate if needed, or switch suppliers without getting locked into unfavourable terms. You should examine changes in terms carefully before accepting renewed agreements, taking legal advice if you are unsure.
For larger or business-critical software purchases, consider seeking advice from an experienced commercial solicitor before signing. A solicitor can highlight risky clauses, negotiate for stronger service level agreements, and ensure you retain clear remedies if things go wrong.
Stay informed about updates and changes in your provider’s software or service. Engage in regular communication with your supplier, and don’t feel pressured to accept new terms or feature reductions without proper review and negotiation.
Summary
Identify early problems by monitoring performance, keep communication professional and in writing, and gather evidence methodically. Review your contract carefully before taking decisive action, like withholding payment or terminating and always consider the dispute resolution steps your agreement requires.
If an informal approach doesn’t resolve the issue, or if your business is at risk, seek specialist legal advice at an early stage. With the right preparation and prompt action, most disputes can be resolved efficiently, limiting the risk to your business and restoring confidence in your technology partners.
If you are facing a software licence dispute or wish to protect your business against future issues, our team of business dispute solicitors can provide practical guidance and work with you to achieve the best possible outcome.
