An IT service provider's obligation to inform and advise its customer is a fundamental principle of contract law. This obligation enables the customer to make an informed decision before committing to a contract, by ensuring that the product or service proposed truly meets his expectations. In the context of software supply contracts, this imperative is particularly important given the complexity of the technical solutions proposed. However, what happens when the service provider fails to meet this obligation, and the software delivered does not meet the customer's expectations due to a lack of clear information? This is precisely the question raised by a recent decision by the Douai Court of Appeal on October 17, 2024, no. 23/01696, which led to the annulment of a contract on the grounds of error, due to a lack of sufficient information on the part of the service provider.
In this article, we analyze the scope of this decision, detailing the legal framework surrounding IT service providers' obligation to provide information and advice, as well as the consequences of a breach of this obligation, which may justify the cancellation of the contract.
The IT service provider's duty to inform: a fundamental contractual obligation
When an IT service provider offers a software solution, it is his duty to inform his customer of the software's features, functionalities and limitations. The duty to inform does not only apply to the pre-contractual phase, but extends to the entire duration of the contractual relationship, including during contract performance. This duty to advise implies that the service provider must take all necessary steps to ensure that the customer is fully informed of what the offer includes, its technical specifications, and any adaptations or additional developments that may be required.
In the case judged by the Douai Court of Appeal, a company wished to acquire sales and accounting management software, including a CRM. Thinking that the proposed solution would be turnkey, the customer signed a contract with an IT service provider. However, once the software had been installed, the service provider learned that additional configuration and development would be required to meet the company's needs, and that additional costs would be incurred to make these adjustments. The customer, having been taken by surprise by this situation, refused to pay these additional costs, and it was in this context that the service provider took the case to court, demanding payment of the amounts due.
The key question: had the customer been properly informed?
The crucial question raised by this case was whether the customer had been sufficiently informed of the limitations of the software solution, in particular the need for parameterization or further development. For the judges, it was clear that the IT service provider had failed in its duty to inform, in particular by not specifying before signing the contract that modifications would be necessary to ensure that the software met the customer's expectations.
In law, this obligation is based on a fundamental principle: the IT service provider, as a professional, is required to provide its customer with all the information necessary to enable the latter to make an informed decision. In this case, it appears that the customer, a company specializing in the installation of heating equipment, was unable to appreciate the technical complexity of the proposed product, and legitimately believed that the software would be operational as soon as it was installed. However, the service provider's obligation was to inform the customer that specific developments would be required to guarantee the software's correct operation, which was not done.
Customer error: a defect in consent justifying cancellation of the contract
Article 1130 of the French Civil Code stipulates that an error can lead to the nullity of a contract when it relates to an essential element that determined the consent of the person who entered into the contract. In this case, the customer signed the contract believing that the proposed software perfectly met his needs. This was a legitimate error, since the customer did not have the technical skills required to evaluate the software's specific features. Furthermore, the IT service provider failed to draw the customer's attention to the fact that adjustments were essential if the software was to function correctly.
The court ruled that this error was excusable, given the circumstances. The IT service provider did not take all the necessary steps to ensure that the customer fully understood the solution he was buying. Furthermore, the contractual documents did not explicitly state that further development would be required to make the software work. This vitiated the customer's consent, justifying the cancellation of the contract.
The duty to inform and its limits
However, the obligation to provide information and advice is not unlimited. The customer also has a role to play in this contractual relationship. For the service provider to be able to inform the customer properly, he must provide precise specifications outlining his real needs. Case law has recalled that the service provider's obligation to advise may be reduced if the customer is sufficiently competent in technical matters, or if the service provider fails to specify certain elements essential to the development of the project. However, in this case, the Court of Appeal considered that the customer, although he had not provided detailed specifications, could reasonably believe that the software solution was complete and adapted to his needs.
The court rejected the service provider's argument that the absence of detailed specifications could absolve it of its obligation to provide information. As a professional, the IT service provider should have ensured that the customer fully understood the limitations of the proposed product. It was also incumbent on him to inform the customer of the possibility of further developments if the proposed solution did not fully meet the customer's expectations.
Contract cancellation and its consequences
Cancellation of the contract leads to reciprocal restitution between the parties. By virtue of the nullity of the contract for error, the customer is released from his payment obligation. He is therefore not obliged to pay the sums claimed by the service provider for the performance of the services. On the other hand, the service provider must reimburse the amount received for software installation, since this is legally considered never to have taken place.
Although the customer claimed damages, the court rejected this claim, as there was insufficient evidence to prove the existence of a prejudice distinct from the nullity of the contract.
Lessons to be learned from this decision
This decision highlights several key lessons for IT service providers, whether IT services companies orESNs. First and foremost, they must ensure that they fully understand the customer's needs before entering into a contract. Even if the customer does not provide detailed specifications, the service provider must ensure that the proposed solution really does meet the expectations expressed, and be totally transparent about the software's limitations.
Secondly, the service provider's commercial proposal must be clear and exhaustive, specifying if any specific developments are required to meet the customer's needs. Failure to do so may result in the cancellation of the contract on the grounds of error, and the return of any sums paid.
In conclusion, this case reminds us that an IT service provider's obligation to provide information and advice is not limited to the pre-contractual phase, but extends to the entire duration of the contractual relationship. The service provider must inform the customer transparently and exhaustively about the proposed solution, failing which the contract may be annulled. If you have any questions about software or digital law, don't hesitate to ask for legal advice!
