Recently, a Dutch district court gave an interesting judgment on the duty of care of a contractor in light of a license issue. In 2009 Tauw Group and Imtech concluded a support services contract. This contract allowed Tauw Group to purchase IBM products such as IBM licenses. An audit done by KPMG revealed that Tauw Group had not contracted enough Processor Value Units (PVUs). A PVU is a measuring tool used by IBM to streamline its license contracts. The shortage was caused by the use of a virtual processor on a physical server. Tauw Group had decided to virtualize and had assigned not one but two processors, so-called Central Processing Units, to a physical server. Imtech was not involved in the virtualization. Under the support services contract, Tauw Group managed the licenses, and Imtech dealt with their application. The main issue in this case was whether Imtech was in breach of its contractual duty of care by not warning Tauw Group about the virtualization’s consequences for the existing IBM licenses. The district court concluded that Tauw Group acknowledged that Imtech did not provide any services relating to the hardware of Tauw Group. Furthermore, Tauw Group did not specify that Imtech knew that it never had a virtual system which worked on a one-processor machine. Tauw Group also did  not  specify how Imtech could have seen that two processors were used. The district court therefore ruled that Imtech did not know, or didn’t have to know, that virtualization would take place on hardware with two virtual servers. Thus, Imtech had no reason or probable cause to warn Tauw Group about the consequences of the required number of licenses, so it had not violated its duty of care.

Source: District court Gelderland 27 November 2013, ECLI:NL:RBGEL:2013:4796