5.1 Breach of contract
There have been cases of failure to deliver systems that have led to lawsuits over breach of contract – as exemplified in Case study 4.
Case study 4: Breach of contract
PeopleSoft charged with contract breach
By Alorie Gilbert, Staff Writer, CNET News.com
The state of Ohio has charged PeopleSoft and its consulting partner with fraud and breach of contract for their role in a software project at Cleveland State University.
The attorney general of Ohio, who filed suit Jan. 30 in Ohio state court, seeks combined compensatory and punitive damages in excess of $130 million.
The suit alleges that PeopleSoft, based in Pleasanton, Calif., misrepresented the capabilities of its software and failed to provide promised features as the university embarked on a revamp of its student administration systems in 1996.
It also charges Kaludis Consulting Group, the Washington-based consulting firm the university hired to help install PeopleSoft’s systems, with failing to fulfil its contractual duties.
In the suit, the university said certain features of PeopleSoft programs were ‘little more than vaporware’ and that the programs had trouble administering student financial aid, keeping student records in synch and running properly on the IBM DB/2 database.
PeopleSoft did not immediately respond to a request for comment.
PeopleSoft was the target of a similar suit several years ago, brought by textile manufacturer W. L. Gore. Yet suits brought by customers against PeopleSoft and competitors, including Lawson Software, Oracle and SAP, are increasingly uncommon.
A court date for the Ohio case has not yet been scheduled.