Path: utzoo!utgpu!attcan!uunet!lll-winken!lll-lcc!pyramid!thirdi!peter
From: peter@thirdi.UUCP (Peter Rowell)
Newsgroups: comp.misc
Subject: Re: Re: Software ``Contracts''
Message-ID: <447@thirdi.UUCP>
Date: 30 Dec 88 02:02:56 GMT
References: <1355@cps3xx.UUCP> <1070002@hpcilzb.HP.COM>
Reply-To: peter@thirdi.UUCP (Peter Rowell)
Organization: Third Eye Software, Menlo Park, CA
Lines: 65

From article <34222@think.UUCP>, by barmar@think.COM (Barry Margolin):
> In article <1355@cps3xx.UUCP> usenet@cps3xx.UUCP (Usenet file owner) writes:
>>What this means is that the software is not guarenteed to DO anything,
>>and even if it does, the manufacturer can not be held responsible for
>>it's performance or lack thereof.
>>  How do software manufacturers get away with this?
> 
> Here are my beliefs about the warranty disclaimors:
              ^^^^^^^
> 
> Mostly, such total disclaimors of warranties are not enforceable (just
> like the road signs that say "road under repair, pass at your own
> risk").  There are many implied warranties that are always in effect,
> no matter what the package says.
  ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>
> etc.


We subscribe to a number of computer law newsletters and this particular
issue was recently addressed in a court case that I found quite interesting.

Breifly, Company A went to Company B and bought some software + some
custom modifications.  Things were late/buggy/fixed/so-so.  Company A
sued Company B for breach of contract based on unfitness for the given
purpose, B claimed its warranty disclaimers covered it.

The court said:
1. Since this was primarily a purchase of existing software the UCC
(Uniform Commercial Code) covered it (the mod's were a side effect).
If it was NOT covered by the UCC, then the contract is *everything*. (period)

2. The disclaimers were inside the contract and were not in bold face.
This addresses the need to state such disclaimers in an extremely
obvious way.

3. The two companies had specifically discussed the disclaimers, which
nullified #2. (Non-notice of disclaimer).

4. The disclaimers specifically mentioned "merchantability".  This
nullified the "implied" warranty supplied by the UCC.

5. The disclaimers further stated that the acceptance of risk by Company A
had effected the price of the software.  I.e. if they wanted more
warranties, it would cost them.  This in conjunction with #3 sealed
the case and the court held that the disclaimers were vaild.


From the above, you can see that even in the case of "shrink-wrap
licenses" (although the above case did not include such a license),
if the disclaimer is in large/bold print and is obvious to a
normally observant purchaser, such implied warranties CAN BE WAIVED!
If you don't want to waive them (or feel that having the disclaimer on
the package implies crap software inside), THEN DON'T BUY THE SOFTWARE!

In many cases, if the company does NOT include such disclaimers, they
cannot get product liability insurance *at any price*.
In this extremely litigious society, selling software is about as
safe as jumping off the Royal Gorge bridge with a frayed bungey cord!


----------------------------------------------------------------------
Peter Rowell				"He waived goodbye...."
Third Eye Software, Inc.		(415) 321-0967
Menlo Park, CA  94025			peter@thirdi.UUCP