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University in New Jersey sues Oracle for breach of contract

Once again, the technology and software company Oracle is being sued for breach of contract. In a previous post, the lawsuit was filed against Oracle by a New Jersey technology company. But last week, Montclair State University filed a complaint against Oracle for not completing a multi-million dollar software project.

The contract was initially entered into between the school and the company two years ago. The school was looking for new software that would provide them with a new program for enterprise resource planning. The school would pay the company for software, support, and implementation services. But according to the lawsuit, Oracle failed to meet many of the agreements in the contract.

Specifically, MSU claims that Oracle failed to:

  • Deliver key implementation services
  • Make promised computer resources available
  • Delivery software that had been properly tested
  • Manage the project overall

According to MSU, these failures lead to delays that cost the school over $20 million more than had been expected. There were a number of additional problems such as staffing changes and failure to meet deadlines. After numerous delays, the school terminated the contract.

But even after the contract was terminated, the school still paid the software company for deliverables that would be used if another company were to finish the project. However, the school maintains that the deliverables could not be used if another company were to step in.

The school is seeking damages to cover the millions of dollars that were paid to Oracle. The lawsuit includes claims for breach of contract and gross professional negligence. At this point, Oracle has not responded to the lawsuit.

This is not the first time that this type of software project has resulted in a lawsuit. Other vendors like Oracle have dealt with litigation in the past several years.

Source: IT World online, "Oracle sued by university for alleged ERP failure," Chris Kanaracus, 23 May 2011

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