Contract Violation Costs $3 Billion for Oracle

Contract Violation Costs $3 Billion for Oracle

A California jury has levied Oracle with compensation payment of $3 billion to HP in damages due to the violation of contract associated with the servers of HP. HP has accused Oracle of breaking a contract for persistently developing software for HP’s servers, on the basis of the Itanium chips of Intel.

Meanwhile, Oracle has retaliated by saying that it was clarified by Intel in 2011 that the kind of chip in question is on the path of becoming outdated. Moreover, Oracle also revealed that the contract did not entail indefinite development of the software. The existence of contract was substantiated by the judge James Kleinberg in 2012.

The verdict of the jury has arrived four years after the initial ruling by the judge that without a doubt there was a contract between the two companies. "HP is gratified by the jury's verdict, which affirms what HP has always known and the evidence overwhelmingly showed", said the Executive Vice President of HP, John Schultz.

He added that the agreement has been clearly violated with Oracle discontinuing the development of Itanium software. The ruling by the judge over the agreement being the contract and the damages levied by the jury on the company will be appealed against by Oracle. Both the companies entail a disorderly history. Oracle CEO Larry Ellison announced in 2010 that it will be nearly impossible for the two companies to work together, but still they entered an agreement.


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