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LOS ANGELES – A U.S. judge slapped an Oregon investment consultant with $1.25 million in damages and prejudgment interest, ruling the company remains locked into a contract to purchase and promote a proprietary software program despite its claims the software was never operational.

The decision by U.S. District Judge Margaret Morrow of the Central District, in a detailed 72-page ruling released Tuesday, is a victory for plaintiff Wilshire Associates, a Santa Monica firm that creates software programs to help investment companies analyze performance.

At the center of the case was a dispute over the basic terms of a business contract between the companies and what actions can trigger the nullification of a contract.

Morrow ruled that Ashland Partners, an Oregon company in the business of verifying that investment firms comply with industry standards, cannot walk away from a contract that runs through 2012 to use and promote several of Wilshire Associates’ software programs, putting it on the hook for hundreds of thousands of dollars, possibly millions of dollars in future payments.

“It’s a validation of the principle that courts don’t re-write contracts, but enforce them according to their terms,” said Eric George, of Browne Woods George in Century City who represents Wilshire Associates. “My very able opposing counsel raised scores of contract formation and performance defenses, but none had any traction.”

Ashland’s attorney Andrew A. August, of Pinnacle Law Group in San Francisco, declined to comment, saying he was in trial on another case and had not read Morrow’s ruling.

The decision follows a four-day bench trial in April. The dispute dates back to May 2007 when the parties entered an agreement to use and eventually promote three of Wilshire Associates’ software programs, designed to help investment firms measure their performance rate. In a sign that the terms were constantly being renegotiated, the contract was amended 11 times, according to court documents.

Ashland Partners argued the software never functioned, and so it never profited from the software – thus making the contract null and void. It refused to pay hundreds of thousands of dollars in bills that Wilshire Associates sent it beginning in 2007.

As a result, Wilshire Associates sued the firm for breach of contract in 2008, seeking declaratory relief to uphold the terms of the contract. Morrow found Wilshire Associates satisfied its obligations under the contract.