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TexLaw, Attorney
Category: Business Law
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Experience:  Internationational Commercial Attorney
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I have a question. Lets say company-A is working for Company-B

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I have a question. Let's say company-A is working for Company-B that wants door controller software. This company buys software and controller from another company-C. So company-A installs the software on company-b computer. After like a month, there was issue with the software and company-c releases an updated software version to fix the issue. All is good but then another issue happened and company-a informs company-c of this and company-c finds out there is an issue with a bug in the controllers firmware that needs a patch from controller company and schedules a time with company-a to apply this patch. The next day, company-a informs company-c that company-b is going with another system and now demanding company-c a full refund for the software and hardware they ere using for almost 2 months claiming it is not what they asked for. Do you think company-c is liable to pay this refund?

Thank you for your question.

Company C will owe the refund if it is determined that Company C did not provide the software functionality promised. In other words, if Company C breached its contract, then it will owe the refund price.

However, if the software was functioning and only required software patches to fix bugs, which is a common issue, then this will not be good cause for a refund. Under the facts provided, Company C has a good defense to claim of breach of contract.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating does not cause an additional charge and will not prevent us from further discussing your questions.

Best Regards,

Customer: replied 3 years ago.

One other thing. What if their was nothing in writing at all with this transaction. No written contract.

If there is no written contract, then there will be a simple one implied by the court. In other words, the evidence of what the contract is would be the testimony regarding what representations Company C made about the software it was providing. If Company B were able to prove that Company C made promises that it did not keep, then there may be a plausible claim for a refund there.

However, this would be something that would have to be established in Court. Company C could likely simply state that it has a no refunds policy on its software.
Customer: replied 3 years ago.

OK but wouldn't company c have to have that in writing to use that

It would be best if it was in writing, but Company C could still argue that is their policy. Company A and B could both argue that they were promised software that worked to their specifications and thus Company C owes the refund.

Without a written contract there is going to be much more wiggle room for arguments on both sides. Without knowing more, I still would say Company C doesn't owe the refund.
Customer: replied 3 years ago.

Yeah' I think since the refund request is happening almost 2 months after purchase company c probably has upper hand

Let me know if you need anything further.
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