Epicor ERP project sparks customer lawsuit

A Connecticut stone company is seeking unspecified damages for an allegedly faulty system it bought

A stone-and-tile company is suing ERP (enterprise resource planning) vendor Epicor over a system it says never worked as intended or promised, according to documents filed last month in U.S. District Court in Connecticut.

Ferazzoli Imports of New England, based in Middletown, Connecticut, is alleging breach of contract, unjust enrichment, negligent misrepresentation, fraud and violations of a state trade law. It is seeking attorneys' fees along with unspecified damages.

The dispute stems back to March 2007, when Ferazzoli began looking for software for its manufacturing, distribution and retail business, according to the company's initial complaint.

Ferazzoli provided Epicor with a list of requirements, which included functionality for sales order entry/point of sale, warehouse management, manufacturing, service and financials.

"Epicor's representatives were given the Requirements list prior to entering any contract negotiations, and Epicor represented its product would be able to perform all of Ferazzoli's requirements," the complaint states.

In June 2007, Epicor officials visited Ferazzoli's headquarters to learn about the business and demonstrate its software. The officials made further assurances that Epicor's technology would be satisfactory, according to the complaint.

The companies reached a contract agreement on June 29, with Ferazzoli initially paying Epicor US$184,443.61, according to the complaint.

But Ferazzoli subsequently began having problems getting the system to work, the complaint states. Epicor "induced" Ferazzoli to buy additional software and services meant to make the system operate properly, but none made it "functional or usable."

To date, Ferazzoli has paid Epicor US$244,656.42, according to the complaint.

Epicor did not immediately respond to a request for comment Monday. An attorney for Ferazzoli declined to comment.

In general, to ensure they're protected in the event of problems, software customers should try to include a number of key clauses in contracts, according to Forrester Research analyst Ray Wang, author of a 2006 Forrester report called "An Enterprise Software Licensee's Bill of Rights."

One is an "entire agreement clause," Wang said via e-mail. "You want to make sure that all demos, marketing materials, and assurances are put into the document."

Software customers are also entitled to "reasonable guarantees of quality" and "should retain the right to establish the severity of an incident or problem," Wang's 2006 report states.

In addition, if a vendor suggests a use case scenario for its software but hasn't actually implemented the use case successfully in the past, it should disclose that fact to customers, according to Wang.

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