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The ARA strikes back

By: 26 May 2011 One Comment

Springdale-based Real Forms filed a breach of contract action against the Arkansas Realtors Association (ARA) on May 11 in Washington County Circuit Court and the trade association filed its response on Tuesday.

The brouhaha stems from a contract Real Forms and the ARA entered into last August under which the software company was to provide real estate contracts to Realtors throughout the Arkansas through a custom application. The agreement was to expire after five years, but Real Forms alleges the ARA wrongfully terminated the contract during the first few months of the $600,000-agreement. Real Forms, which is represented by the Asa Hutchinson Law Group in Rogers, filed suit asking for $25,000 in lost operating expenses and future lost profits valued in excess of $350,000.

A copy of Real Forms’ complaint is located here.

The ARA, meanwhile, alleges it properly terminated the agreement on March 21 as Real Forms failed to produce a software package the met the trade association’s business requirements. One of the issues raised by the ARA is that Real Forms failed to address a security issue that did not protect confidential client information — the trade group alleges that it was possible for Realtors to improperly access data concerning clients that were not their own.

The ARA alleges it notified Real Forms of the security issue, but the matter was never resolved. Real Forms alleged in its complaint that it was not fully informed of the security issue until the day the ARA terminated the contract and was, therefore, denied the opportunity to fix the issue as provided for under the contract.

In addition to the alleged failure on Real Forms’ part to repair the security issue and failure to deliver the software on or before Jan. 1, the ARA has set forth other problems with the software in its answer to the complaint. Click here to read the ARA’s answer and counterclaim.

The alleged failures by Real Forms under the agreement prompted the ARA to counterclaim for breach of contract. Also, the ARA alleged that Real Forms officials emailed Realtors — the software company’s clients and the ARA’s members — notifying of the breach and blaming the ARA for botching the timely software release. Those communications, the ARA claims, were misleading and served to vilify the trade group in the eyes of its members.

Those communications, the ARA claims, served to interfere with the contractual relationship and business expectancy between the ARA and its members (there’s one counterclaim) and effectively defamed the ARA and damages its reputation (there’s another one).

The ARA has also counterclaimed on the grounds that Real Forms committed fraud and deceit by claiming the software was functional when it wasn’t. Furthermore, the ARA counterclaimed on the grounds that Real Forms violated the Arkansas Deceptive Trade Practices Act by allegedly concealing material facts about the functionality of the software.

The ARA states it has seeking an award for damages against Real Forms, but has not specified a dollar amount. The ARA has asked for an injunction forbidding Real Forms from contacting Arkansas Realtors. The ARA has also asked for a change in venue from Washington County to Pulaski County where the trade organization is headquartered.

The ARA is represented by the Little Rock firm of Quattlebaum, Grooms, Tull & Burrow.

About: Ethan C. Nobles:
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.

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