Target Australia has terminated a three-year agreement with retail software maker daVinci, alleging the product failed to deliver and seeking its outlay on licences, hosting and professional services back.
The retailer is held up as a case study user of daVinci’s software for inventory and merchandise planning.
But a recent court judgment shows that the relationship unravelled in its third and final year, with Target “refusing to pay the third annual software licence agreement to daVinci”, the vendor’s counsel said.
“Until this time, Target had regularly made the licensing and hosting payments and many further payments for specific work requested by Target.”
daVinci is seeking a US$531,707 payment – translating earlier this month to $790,995.24 – from Target.
The retailer has filed a counterclaim seeking reimbursement of everything it has spent with the vendor so far – almost $2.8 million.
“Target … terminated the software licencing agreement on September 1 2023,” a procedural judgment states.
“[Target pleads] that the software was not fit for purpose and did not meet the standards and targets that daVinci had represented it would, and which Target relied upon to enter into the agreements.”
The case is slated to go to trial in August next year if intermediate steps to resolve the dispute fail.
If it progresses as such, a key issue will be understanding what caused the relationship to sour so far into the contract term.
“The commercial arrangements apparently worked satisfactorily for some time,” Judge Anderson of the County Court of Victoria wrote.
“After more than two years, Target decided that the services that had been provided to it by daVinci were entirely worthless.
“It terminated the arrangement by refusing to pay the annual licence and hosting fees when they were invoiced in June 2023 and served a purported notice of termination on September 1 2023.
“The damages Target counterclaims and sets off in defence of daVinci’s claim in the proceeding, comprise every payment it had paid to daVinci over the previous two-and-a-half years in respect of their commercial arrangements.”
Target had a small victory in the court with an order for daVinci to post a $25,000 security that could contribute to a future order of costs in the proceeding.
Target Australia did not acknowledge or respond to an email sent to its media address. Several attempts to contact a corporate affairs spokesperson by phone call to the retailer’s head office were unsuccessful.
Comment was also sought from a daVinci spokesperson.