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A lawsuit says Twitter failed to pay a $1,092,000 invoice in a software contract that doesn’t expire until the end of 2024, and that the Elon Musk-led company apparently plans to saddle the seller with another $7 million in payments.
Imply Data, Inc. sued Twitter in California Superior Court in San Francisco County for breach of contract. The lawsuit was filed on Tuesday (see complaint) and reported today by Bloomberg.
“For more than four years, Imply has licensed its own software to Twitter, and Twitter has paid Imply more than $10 million,” the lawsuit said. “Twitter has always been very satisfied with Imply’s product and associated maintenance and support services, so in mid-2021 the parties extended the term of their software license and service agreement for an additional three years from October 1, 2021 through September. December 30 2024.”
In May, a few weeks after Musk struck a deal to buy Twitter, the company told Imply Data it would not renew the contract, but “acknowledged that the license agreement would ‘remain in full force and effect’ until the end of the year.” the term on September 30, 2024,” the lawsuit said.
Payments stopped after Musk took over
Twitter continued to make quarterly payments for the contract until Musk completed the purchase in late October. Shortly after Musk’s purchase of Twitter was completed, Twitter refused to pay the outstanding quarterly invoice, due November 30, 2022, and denied any obligation to pay future invoices from Imply, despite the unambiguous language in the software license. service agreement that requires Twitter to do so,” the lawsuit said.
Imply creates a database based on Apache Druid open source software and products for managing and monitoring Druid clusters.
The New York Times reported on Nov. 22 that Twitter was holding some suppliers stiff. Imply’s complaint points to press coverage of Twitter refusing to pay suppliers, saying, “This lawsuit is such a blatant one.”
Imply uploaded the $1,092,000 invoice to Twitter’s vendor portal, and the invoice was approved by Twitter on Oct. 5, the lawsuit said. “When Imply accessed the vendor portal on November 28, 2022, Imply learned that Twitter had removed the invoice and closed the license agreement,” the lawsuit said.
“We no longer pay Imply”
Imply says Twitter “also uploaded an internal email chain to the vendor portal to support those actions.” The lawsuit said that this email chain contained a message from Martin O’Neill, head of global strategic procurement at Twitter, which read: “A warning that we will no longer be paying Imply. If we can flag them in our AP system to don’t send any of their invoices for approval, that would be great, thanks!”
The Twitter executive who received the email, Kristena Bravo, “forwarded that email to other Twitter employees and wrote, ‘Could you please cancel all invoices for Imply that are currently pending with Oracle (if any) and deactivate the supplier using the email below as evidence?'” the lawsuit said.
After reviewing these emails, Imply asked Twitter about the status of the payment due on November 30. “Twitter’s accounts payable department informed Imply that the invoice had been ‘cancelled’ and that if Imply had any concerns, Imply should contact [Imply’s] Twitter business partner.” Imply has reached out to Twitter to discuss the cancellation of the bill; However, Twitter has not yet responded substantively to that reach,” the lawsuit said.
Imply is seeking financial damages for breach of contract. “Imply expects Twitter’s breach to continue, with the amount of default increasing each quarter through the term of the license agreement…Twitter’s breach has harmed and will harm Imply in an amount that will be proven at trial, but that will likely exceed $8 million,” Imply told the court.
Dispute over whether Twitter can terminate contract
The lawsuit also alleges violation of the covenant of good faith and fair dealing, and anticipatory rejection. The latter term describes when a party to a contract declares that they do not intend to fulfill their contractual obligations.
“Twitter has expressly, unequivocally and absolutely waived the license agreement by stating that Twitter would not pay Imply and instructing its employees not to approve invoices and deactivate Imply from the supplier portal. Twitter has thereby violated the license agreement,” the statement said. lawsuit.
Twitter can argue that it had the right to terminate the contract early. According to Imply’s complaint, there is a dispute between the companies over “whether Twitter had the unilateral right to terminate the license agreement before its expiration date.” Imply is seeking a declaratory judgment that Twitter does not have that right.
We reached out to Twitter about the lawsuit, but the company reportedly dismantled its public relations team after Musk acquired it.
