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Jabvmet

software not operating as promised causing financial loss

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We have small business that takes care of elderly, we bill to different insurance companies using the software. In January this new company promised us that with their software we would be able to bill faster and more effective and were told that the installation and set up will only take two weeks.  So we cancelled our previous software and switch to them in February of 2019, since than their program is not working and we are not able to bill insurance companies for six months.  We had to borrow money to meet our payrolls for six months. 

 

The first person assinged to us to us for software setup kept on giving us excuses and now she went on a vacation.  This big company doesn't care if we go bankrupt.  Even their software is not working and they have nerve to charge us 50% of their normal billing rate. 

 

Now on how can we sue them? Can we sue them only for the amount of past 6 months billing or more for the stress and breach of contract?

 

 

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Your lawsuit would be for breach of contract but you wouldn't get anything for stress or inconvenience.

 

And it isn't likely that you would get 6 months worth of billings because that money wasn't lost, only delayed. You're still going to get the money from the insurance companies.

 

Your cost to borrow money might have been compensable except for one thing - a concept in contract law called "mitigation of damages."

 

See:

 

https://legal-dictionary.thefreedictionary.com/Mitigation+of+Damages

 

You could have easily typed up invoices and mailed them to the insurance companies. What do you think businesses were doing before computers and software came along?

 

I don't see you having much of a case other than for the return of whatever money you paid those people.

 

But do consult an attorney if you like, and review your options.

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1 hour ago, Jabvmet said:

Now on how can we sue them?

 

Your company can sue the other company by filing a complaint in the appropriate court.  Since you didn't say where either company is located, we can't provide any information about what the appropriate court might be.

 

 

1 hour ago, Jabvmet said:

Can we sue them only for the amount of past 6 months billing or more for the stress and breach of contract?

 

Your company can sue for whatever amount it likes.  Without reading the contract and knowing what state the two companies are in, it is virtually impossible to speak intelligently about what amounts might be recoverable.  However, I can tell you that stress is not something for which a business entity can recover for a breach of contract.  Likewise, nothing is preventing you from billing the old fashioned way and, after a month or two of unsuccessful billings, you should have found an reliable alternative.  That said, if your company eventually cannot get paid for services because of this, such amounts might be recoverable (again, it depends on what your contract says).

 

 

56 minutes ago, adjusterjack said:

You could have easily typed up invoices and mailed them to the insurance companies. What do you think businesses were doing before computers and software came along?

 

While I made a similar point, the reality is that many insurance companies require specialized electronic billing, so that could come into play here.

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Our company is in Virginia and software company is in Texas.  This company is charging us 50% of their regular billing rate. Even though we are not able to bill properly due to their mistakes. Today we spoke to one of their employees and he is calling us liars. We have back billing of $150k while some of the claim are paying $4k here and $5k there. But we have to pay payroll bi weekly which is around $15k to 20k. We have exauhasted all our personal savings paying this expenses. 

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I've never seen a software contract even for high end stuff that didn't have wording somewhere stating that the maker was not responsible for lost income or that the software would actually do a specific thing.

 

It has been over a week since your first post. What have you done to mitigate damages.  i.e. Replace the software.

 

 

 

 

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1 hour ago, Jabvmet said:

we have to pay payroll bi weekly which is around $15k to 20k.

 

Which is one of the reasons why, after the problem was not fixed after a week or two,  you should have sough an alternative billing solution.

 

 

1 hour ago, Jabvmet said:

We have exauhasted all our personal savings paying this expenses.

 

Assuming your business is organized as a corporation or LLC, there's nothing that inherently obligated you to pump personal funds into the company.  Again, your company likely has a valid claim against the software provider (although, as I mentioned previously, and as "PayrollHRGuy's" comment brings into sharper focus, a lot depends on what the contract says), but a lot of the consequential damages you're talking about seem to be of your own making.

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