According to the lawsuit, the company apparently intends to stiff the vendor on another $7 million worth of payments after failing to pay a $1,092,000 invoice.
The lawsuit was filed in California Superior Court in San Francisco County. The complaint was filed on Tuesday and reported by the news agency.
Over the course of four years, Imply has licensed its proprietary software toTwitter, and it has paid Imply over $10 million. The parties extended the term of their software license and service agreement for an additional three years from October 1, 2021.
In May, a few weeks after Musk struck a deal to buy Twitter, the company notified Imply Data that it wouldn't be renewing the contract again, but that the License agreement would remain in effect until the end of the term on September 30, 2024.
Musk completed the purchase of the company in October. After Musk's purchase of Twitter, the company refused to pay the outstanding quarterly invoice from Imply, despite the unambiguous language in the software license and service agreement requiring them to do so.
Imply makes a database and products for managing and monitoring Druid clusters.
According to the New York Times, some vendors were stiffed. Imply's complaint states that the lawsuit involves one egregious case.
The lawsuit said that the $1,092,000 invoice was uploaded to the vendor portal by Imply. According to the lawsuit, when Imply accessed the vendor portal, he found out that the license agreement had been closed.
AdvertisementThe email chain was uploaded to the vendor portal. According to the lawsuit, this email chain included a message from Martin O'Neill, head of global strategic sourcing atTwitter, that stated, "A heads up that we will not be paying Imply any longer." If we can flag them in our system to not route any of their invoices for approval, that would be great.
The lawsuit said that the executive forwarded the email to other employees and asked if they could cancel all invoices for Imply if they wanted to.
Imply asked about the status of the payment after looking at the emails. Imply was told that the invoice had been canceled and that he should reach out to his business partner. The lawsuit said that Imply had reached out to the social networking site to discuss the cancellation of the invoice.
Financial damages are being sought for a contract violation. Imply believes that the amount of default will increase each quarter until the end of the license agreement. Imply told the court that the breach would damage him in an amount that would be proven at trial.
Anticipatory repudiation is one of the allegations in the lawsuit. When a party to a contract says they don't intend to live up to their obligations, it's called the latter term.
The License Agreement was repudiated by the company because it said it wouldn't pay Imply and wouldn't approve any invoices. The lawsuit said that the license agreement had been violated.
It's possible that it had the right to end the contract early. According to Imply's complaint, there is a dispute between the companies as to which company had the right to end the license agreement before the end of the term. Imply is trying to get a declaratory judgement as to whether or not there is a right to speak.
The company's public relations team was dismantled after Musk took over.
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