A new addition to the IT service providers’ duty to advise

Cour d’appel de Rouen, 9 mars 2011, Carr Oceans c. Lynx Concept
Cour d’appel de Paris, 16 mars 2012, Uzik c. Moralotop

The IT service providers’ duty to advise has been progressively shaped by French case law and usually consists of three obligations: a general duty to inform, a duty to advise its client as regards the choice of an IT solution and a duty to warn its client about the potential consequences of such choice. Meanwhile, the client is bound by a duty to collaborate with its provider, pursuant to which it shall precisely define its own needs.

Outlining the scope of these obligations and distinguishing between the client and the provider’s liabilities may prove difficult. A rich case law has thus developed itself on a case-by-case basis, taking into account various elements, such as the client’s technical knowledge and skills or the standard or customized nature of the IT solution.

In this context, judges have sometimes given a central importance to the existence of client-elaborated specifications, by considering that the provision of such specifications directly resulted in the fulfillment of the client’s duty to collaborate. The courts have also stated that, under such circumstances, the provider is not bound to verify whether its solution meets its client’s actual needs, so long as it provides its client with a solution that complies with the requirements defined in the client’s specifications.

Some decisions from the Cour de cassation have thus affirmed that the client shall be regarded as solely liable for any malfunctions resulting from imprecisions or inaccuracies in its specifications and that the provider shall not be held liable provided that it had verified its solution’s compliance with such specifications (Com., May 11th, 1999, n°96-16322; Civ. 1ère, October 2nd, 2001, n°99-16329).

Meanwhile, the Cour de cassation has however reinforced the provider’s duty to inform and advise those of its clients that have not defined specifications on their own, by requiring the provider to analyze such client’s needs in order to provide it with a suitable solution (Com., May 15th, 2001, n°98-18603; Com., February 19th, 2002, n°99-15722).

Two recent rulings by French Cours d’appel seem to further extend the scope of the IT service providers’ duties towards their clients, in the presence of client-elaborated specifications.

In a ruling dated March 9th, 2011, the Cour d’appel of Rouen deemed that an inexperienced client should not be considered in breach of its duty to collaborate merely because the specifications it communicated to its provider appeared imprecise. Indeed, according to this decision, the provider should have requested any additional information it needed from its client in order to allow such client to make its choice with a full knowledge of the facts. In the court’s opinion, if the provider deemed that its client’s needs were insufficiently documented, “it was the provider’s responsibility, in order to properly understand them, to request any necessary clarification from its client in the course of the negotiations”. As a result, in this case, the court found the provider in breach of its duty to advise.

In a ruling dated March 16th, 2012, following the same trend, the Cour d’appel of Paris stated that a provider’s duty to warn includes an obligation to alert its client whenever requirements defined in such client’s specifications appear impossible to achieve. In this respect, the court reproached the provider with the unilateral termination of the fixed-term contract it had passed with its client, whereas it should have foreseen its inability to perform the project and to meet its client’s specific needs from the get-go, upon reading the specifications. In that case, the judges therefore concluded that the provider was in breach of its duty to warn.

In light of these rulings, it appears that providers must now assist their clients in the drafting of specifications, especially if the client has limited technical skills. If the client does not define its needs precisely enough, it shall be the provider’s duty to ask for their development; if the client defines needs that are impossible to satisfy, it shall be the provider’s duty to bring them back in line with reality.

From now on, IT service providers should systematically proceed to a complete audit of their clients’ requests before providing them with any service, so as to be in a position to express any warning or recommendation that may appear necessary in regard of any potential inaccuracies in their clients’ specifications.