SAASY
A SaaS company attempted to rescind a contract with a client 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, we intervened.
The result: 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 after the client’s engineers labored for months with the SaaS company to integrate client’s API into their systems.
Claiming that a critical API integration was defective, the SaaS Co sent a formal Notice of Rescission and Demand for Refund of a paid $50,000 integration fee and threatened further legal escalation, pointing to a rocky rollout of the API and the need for expensive add-ons.
To an undisciplined eye, it looked like a standard tech vendor dispute heading toward costly litigation over software deliverables.
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 7 days.
Pay a $75,000 lump-sum buyout, within 7 days, to terminate the contract and walk away.
Realizing they had exposed themselves to significant financial liability, and potential litigation in New York, their attorney called to discuss settlement.
They paid the $75,000.