When two businesses collaborate to bring a tech solution to market, clearly written contracts are the best protection. That’s the takeaway from Baldwin Hackett and Meeks, Inc. v. Early Warning Services, LLC, a recent case from the Eighth Circuit involving a failed software licensing relationship. Nebraska-based software firm Baldwin Hackett and Meeks, Inc. (BHMI) had leased its proprietary platform for processing financial transactions to Early Warning Services, LLC (EWS), only for the relationship to sour after EWS allegedly used BHMI’s software knowledge to build a competing system.
BHMI sued for breach of contract and breach of the implied covenant of good faith and fair dealing, but the United States District Court for the District of Nebraska ruled in favor of EWS, and the Eighth Circuit affirmed their ruling. The court emphasized that BHMI’s claims were barred by the limitation-of-liability clause in the parties’ lease agreement. Despite BHMI’s assertions that EWS misused its product and ended the relationship in bad faith, the court strictly enforced the written contract, finding that it allowed for EWS’s actions and blocked the types of damages BHMI was seeking.
How could this apply to you? If your business relies on licensing intellectual property or outsourcing important software development, this case is a powerful reminder that your contract must clearly define limitations on liability and protections for proprietary information. Courts will enforce the written terms of the contract, even when the practical outcome feels unfair. If entering or managing a valuable software agreement, consult with counsel to ensure the contract reflects your long-term business interests.
This post is for informational purposes only and does not constitute legal advice. If you have questions about your specific situation, you should contact a lawyer for assistance. Nothing herein is intended to create any attorney-client relationship between you and DLM LAW.
