Just as individual consumers are expected to pay their bills, businesses must also stay current with payments for goods or services under the terms of a contract. A company that fails to hold up to its end in a contract may end up facing breach of contract litigation.
In some cases, contract issues can be settled out of court, if both sides are willing to come to an agreement, or the party that caused the contract breach is willing to follow the terms. However, it isn’t always easy to resolve a contract dispute out of court. Texas-based Medhost is involved in litigation against a Naples, Florida company for breach of contract, after Medhost stopped receiving payments for their emergency room software.
The Florida company, Health Management Association, had Medhost’s software installed at their Seven Rivers Regional Medical Center near Tampa for testing in May 2011. After a 60-day trial period, the software was installed at all of HMA’s 58 hospitals. HMA made the first two payments to Medhost, but didn’t pay the third payment of $4.5 million.
Medhost notified HMA of the contract breach in February, yet says they still haven’t been paid the third installment. Meanwhile, HMA has had the software installed at eight additional hospitals. An HMA spokesman says the medical group hopes to be able to resolve the dispute outside of court. Medhost has also expressed a willingness to settle the issue without litigation, and says the complaint was only filed as a last resort after conversations with HMA still didn’t yield the $4.5 million payment.
Whether on the paying or receiving end of a contract, litigation that arises out of confusion or lack of communication can be costly and complicated, and may need the help of a corporate attorney to sort out.
Source: Naples News, “Software provider sues Naples-based HMA, alleges $4.5M owed,” Liz Freeman, April 25, 2013