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A lawsuit says Twitter failed to pay a $1,092,000 bill in a software deal that doesn’t expire until late 2024, and that the Elon Musk-led company appears to intend to hit the provider with additional payments of $1,092,000 charge $7 million.
Imply Data, Inc. sued Twitter in California Superior Court in San Francisco County for alleged breach of contract. The lawsuit was filed Tuesday (see lawsuit) and reported today by Bloomberg.
“For over four years, Imply has licensed its proprietary software to Twitter, and Twitter has paid Imply over $10 million,” the lawsuit reads. “Twitter has always been very pleased with Imply’s product and associated maintenance and support services, so in mid-2021 the parties extended the term of their software license and services agreement for an additional three years from October 1, 2021 to September 30, 2024.”
In May, just weeks after Musk struck a deal to buy Twitter, the company told Imply Data that it would not renew the deal again, but “recognized that the license agreement is in full force until the end of its term.” would remain’ 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. “However, shortly after Musk’s purchase of Twitter was completed, Twitter refused to pay the outstanding quarterly bill, which it received on April 30, and the service agreement that obliges Twitter to do so,” the lawsuit said.
Imply creates a database based on the open source Apache Druid software and products for managing and monitoring Druid clusters.
The New York Times reported on November 22 that Twitter was stiffening some vendors. Noting press coverage of Twitter refusing to pay vendors, Imply’s complaint states, “This lawsuit concerns such an egregious case.”
Imply uploaded the $1,092,000 invoice to Twitter’s supplier portal, and the invoice was approved by Twitter on Oct. 5, the lawsuit states. “When Imply accessed the provider portal on November 28, 2022, Imply learned that Twitter had deleted the invoice and entered into the license agreement,” the lawsuit reads.
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“We will no longer pay Imply”
According to Imply, Twitter “also uploaded an internal email chain to the vendor portal to support these promotions.” The lawsuit states that this chain of emails contained a message from Martin O’Neill, head of global strategic sourcing at Twitter, which said: “Beware, we will no longer be paying Imply. If we can flag them in our AP system, not submit any of their invoices for approval, that would be great, thanks!”
The Twitter executive who received the email, Kristena Bravo, “forwarded this email to other Twitter employees and wrote, ‘Can you please cancel any invoices currently pending with Oracle for Imply (if any) and the supplier opt out by using the email below as proof? ‘” the lawsuit states.
After reviewing these emails, Imply contacted Twitter to inquire about the status of the payment due on November 30th. “Twitter Accounts Payable told Imply that the invoice had been ‘cancelled’ and that Imply should ‘contact her if Imply had any concerns [Imply’s] Twitter business partner.” Imply reached out to Twitter to discuss canceling the bill; However, Twitter has not yet substantially responded to that outreach,” the lawsuit reads.
Imply demands financial damages for breach of contract. “Imply expects Twitter’s breach to continue, with the amount in arrears increasing each quarter through the end of the term of the License Agreement… Twitter’s breach has caused and will damage Imply to an extent that can be proven in court , but likely will be over $8 million,” Imply said in court.
Dispute over whether Twitter can terminate the contract
The lawsuit also alleges breach of good faith and fairness and anticipatory repudiation. The latter term describes when a contracting party declares that it does not intend to perform its contractual obligations.
“Twitter has expressly, unequivocally and absolutely rejected and abandoned the license agreement, stating that Twitter will not pay Imply and instructing its employees not to approve invoices and to disable Imply from the vendor portal. Twitter thereby violated the license agreement,” the lawsuit said.
Twitter can claim that it had a right to terminate the contract early. Imply’s complaint said there was a dispute between the companies over “whether Twitter had the unilateral right to terminate the license agreement before its term expired.” Imply seeks a declaratory judgment that Twitter does not have this right.
We contacted Twitter about the lawsuit, but the company reportedly disbanded its PR team after Musk took over.