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A SaaS company attempted to rescind a contract with a client, Easyship Inc., and claw back a $50,000 engineering fee, alleging API integration failures among other issues. When their attorney sent a Notice of Rescission demanding a full refund and threatened litigation, I intervened.
They ended up paying the client $75,000 to walk away.
The Threat: Demand for Rescission
The dispute began when a client’s SaaS integration partner attempted to back out of its contractual obligations with our client, Easyship.
Claiming that a critical API integration was incomplete and deficient, SaaS Co sent a formal Notice of Rescission and Demand for Refund of their $50,000 integration fee and threatened further legal escalation, pointing to a rocky rollout and the need for expensive add-ons as proof of a failed delivery.
To an undisciplined eye, it looked like a standard tech vendor dispute heading toward costly litigation over software deliverables. Not so fast.
The Strategy: Dismantling the Timeline & Reversing the Leverage
Under the agreement, SaaS Co’s right to rescind matured only if the API integration remained incomplete by the six-month anniversary of the contract. The engineering receipts established an undeniable timeline:
February 17: Easyship’s engineering team successfully completed and deployed the API integration.
March 8: The contractual rescission window closed.
April 20: SaaS Co retroactively attempted to issue their rescission notice.
Because the integration was factually completed weeks before the deadline, the notice of rescission was legally void. Any subsequent complaints about a "bumpy rollout," like post-launch optimization and issues with third-party add-ons did not legally equate to an incomplete integration.
The Offensive Flip
Then we went on the attack. By attempting to rescind with 8 months left in the contract while withholding ongoing subscription fees, they were the breaching party. So on May 5, a letter went out to SaaS Co’s counsel with a hard response deadline:
Pay $125,000 to bring the account current and cure their default within a week.
Pay a $75,000 lump-sum buyout to terminate the contract and walk away within a week.
Realizing they had exposed themselves to significant financial liability, and potential litigation in New York, their attorney called to discuss settlement.
The Final Result: SaaS Co paid $75,000 to walk away.
The Lesson: If you’re going to be a predator, be a predator.