Exact Software Nederland v. De Hypotheekadviseur

Exact Software Nederland v. De Hypotheekadviseur was a Dutch civil case over the number of people who could work at the same time in Exact Compact 2003, an accounting package that Exact sold in a multi-user version. The customer returned the software a few weeks after delivery and refused to pay, saying it had ordered a package for four simultaneous users and received one that allowed only two. Exact sued for its invoices. In an interim judgment of 22 December 2010 the Rotterdam District Court found that the signed quotation did not settle the user count, but that an internal e-mail of the customer raised a presumption that two simultaneous users had been agreed. It admitted the customer to counter-evidence and to prove that it had told Exact it needed four simultaneous users.^[1]

Background

On 16 January 2008 Exact e-mailed the customer a quotation for the “multi-user version” of Exact Compact 2003 Factuur. The e-mail said that the customer “can now also work in the software with several users at the same time” and that the attached order form let it indicate “with how many extra users you want to work in the software at the same time”. The order form, titled “Order form Exact Compact 2003 Factuur Multi Werkplek”, listed (wiki translation):^[1]

The customer signed and returned the quotation the same day. It also concluded a licence and maintenance agreement by completing and signing a registration card on 29 January 2008, on which it entered “4” next to “number of users”. An internal e-mail of 16 January 2008 from the customer’s interim manager said he had just spoken to Exact about use “by 2 users”, that this meant buying the package four times (“2 x 4 administrations and 2 x for 2 users”), and that he had obtained a discount, so that three packages would be paid for.^[1]

The dispute

The software was delivered on 18 January 2008 and returned on 27 February 2008. The customer wrote that it felt misled because it had made its licence needs clear during the sale, had expected four users, and had found that only two users could use the package. Exact had sent three invoices totalling EUR 7,367.96 under the signed quotation and the licence and maintenance agreement, which remained unpaid. Exact claimed EUR 9,436.35 with contractual interest.^[1]

At the hearing Exact’s salesperson explained the licensing as follows: one purchased program covers four administrations (company files) and is installed on one workstation, giving one licence for one user in four administrations; buying it for eight administrations lets two users each work in four administrations; and four users working at the same time in eight administrations would need at least eight licences, in which case the larger Globe product would be cheaper. The salesperson said the customer had not said it wanted four people working at once, and that the word “simultaneously” in the e-mail was a standard passage.^[1]

The customer argued that no contract had been formed, that Exact had failed to perform so it could dissolve the contract, or that the contract was voidable for mistake because Exact knew it wanted four simultaneous users and did not tell it the package allowed only two.^[1]

Decision or outcome

• Contract formed. The signed documents showed that at least some contract existed; the customer’s own position that four users had been agreed also assumed a contract. The court held that agreement on the purchase was reached when the signed quotation was returned on 16 January 2008, not when the registration card was signed on 29 January.^[1]
• The quotation was unclear. Because Exact relied on the contract, it bore the burden of proving its content. The quotation spoke only of the possibility of several simultaneous users and referred to the order form for the number, yet did not state that the maximum was two. The court found that signing it did not show agreement on software in which no more than two people could work at the same time.^[1]
• Presumption from the internal e-mail. The customer’s internal e-mail referred to a call with Exact just before the quotation, did not contradict the quotation’s description, and mentioned the discount that was in fact given. The customer had not disputed its content. This justified a presumption that two simultaneous users had been agreed, which the customer could rebut.^[1]
• Mistake. The court rejected mistake based on information given by Exact, since no such statement was alleged, but held that the customer had sufficiently argued that Exact should have warned it, and admitted it to prove that it had told Exact it wanted four simultaneous users. The “4” on the registration card did not count, because the contract already existed when the card was completed.^[1]
• Consequences set out in advance. If the customer rebutted the presumption, or proved its mistake claim, Exact’s claim would fail. If it did neither, Exact would be awarded EUR 7,367.96 with contractual interest of 1.5% per month under its general terms from 30 days after each invoice, and EUR 768 in extrajudicial costs. Witness hearings were scheduled for early 2011.^[1]

No later judgment in the case is published on rechtspraak.nl.

Significance for software licensing and SAM practice

The case shows how a licence quantity can be ambiguous when a product combines several counting units. Here the vendor’s explanation tied the number of simultaneous users to purchased packages, workstations and administrations, while the quotation spoke only of “several users at the same time”.^[1] The general difference between concurrent and named or device-based counting is described in Concurrent and device licensing.

The court did not accept the vendor’s quotation as proof of the user count, but the customer’s own internal note of a sales call shifted the burden back to the customer.^[1]

Lessons learned

• Write the number of simultaneous users into the order. The quotation’s general wording about several users at once did not prove the agreed maximum for either side.^[1]
• Ask how licences, workstations and administrations combine. The vendor’s explanation that four simultaneous users in eight administrations needed at least eight licences came only at the court hearing.^[1]
• Internal notes of vendor calls can become evidence. The customer’s own e-mail raised the presumption against it.^[1]
• The order document fixes the deal. The user count on the later registration card was irrelevant to what was agreed when the quotation was signed.^[1]
• Returning software does not cancel the invoices. The customer still needed to establish breach or mistake to avoid paying.^[1]