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UK Court Finds Company Liable For Software Defects
normsky writes "A software company's stipulation that it couldn't be held accountable for the poor performance of its software was unfair and could not be enforced, the High Court has said. 'Pursuant to the Sale of Goods Act 1979, a term is to be implied into the contract that Entirety would be fit for the purpose for which it was bought, namely that the system would increase revenue and occupancy levels and would allow quicker check-in and check-out, including accurately processing groups and making changes to group reservations while preserving the accuracy of the system. I am satisfied that Entirety was not fit for the purpose for which it was sold,' his Honor Judge Toulmin wrote."
Great news - and am happy this is being done. Maybe if this is held as a precedent, more software will be written sensibly and with fewer stupid bugs and features.
I think it is unforgivable that software companies can provide us any software they want (esp. in enterprise software) and get off without any problems. All this is due to very little attention paid to during the SDLC to thinking of problems and use cases and testing.
Yay good for UK - and hope developers in US also get their feet held to the fire soon!
Er, the whole point is you can't assign away any responsibilities if you've sold it at all. It must be fit for purpose.
What part of the word "sale" do you not understand?
How we know is more important than what we know.
While it might be good to hold commercial companies responsible for the software they sell it can place OSS developers in a very bad situation.
If you sell your software to someone using only a rigged demo to convince them, then yes - you'd be liable if it wasn't able to do in reality what it seemed to do in the demo. With OSS - and heck, many commercial apps - you can usually evaluate it first, in which case this law would not apply. AFAIK it was the fact that they weren't able to evaluate it properly which caused the problem.
If you'll bother to read the article (yes, I know...) you'll see that the customer was only given a demonstration of the software by a sales rep and the sales contract said "no money back".
If your software has a free trial period and/or you allow refunds then you're OK - people can try before they buy.
No sig today...
In America, the buyer must beware: there's this weird idea that it's OK to con someone, because they should somehow know that the person they're buying from isn't trustworthy, essentially throwing all "perfectly informed and rational consumer" theories out of the water. Western European countries tend to have the different opinion that you don't get to fool someone any time (unless you're a civil servant or banker). Sales of most goods are very much not final - for example, the Distance Selling Regulations stipulate a trial period for many goods bought online. So:
1. Do you feel your software is of good quality?
If YES, go to 2.
If NO, give away or do not distribute.
2. Are you prepared to fix any serious problems with your software found by your customers in the year after you've sold it?
If YES, go to 3.
If NO, give away or do not distribute.
3. Do you want to make money from others on the basis of honest trade?
If YES, go to 4.
If NO, give away or do not distribute.
4. Are you prepared to accept that for a consumer to be properly informed about a complex product, he must have a trial period?
If YES, go to 5.
If NO, give away or do not distribute.
5. Congratulations, you're not a shyster and are the sort of businessman an economy needs.
AC has hit the nail on the head - there's a reason that, for instance, a company might choose to pay MS a lot of money to use Bing maps in preference to the free solution from Google, and that reason is that they have a legally binding contract which includes accountability on both sides. If you're dealing with an alpha version of the code which is expected to have bugs and comes with no guarantee, that's fine so long as that's reasonably conveyed to the customer and they're happy to take the risk. If you tell the customer you're providing a mature solution that will do X, Y and Z and you're charging a premium for that, it's only right that the software vendors are accountable if it fails on any of those stated counts. If you're worried about getting sued, make it blatantly clear that there are potential flaws in the software - if that makes it harder to sell then either reduce the price or fix the flaws.
What laws not contingent on a sale having occurred? Negligence and other torts? Not likely: there is no case law suggesting that, and it is a completely different situation so this case has no bearing on it.
What happened here was:
1) There was a sale of goods, and therefore an implied contract term that the goods were fit for purpose.
2) The exclusion clause relied on the customer having been supplied with documentation before purchase that they never received.
3) As a result of 2), the customer relied on the suppliers descriptions of what the software could do.
In the case of hobbyist software
1) there is no sale of goods and no contract (an open source license is not a contract)
2) There are no conditions on disclaimers of liability
3) There is no salesman making unrealistic promises to the customer.
This is not the horror story which the headline and TFS seem to imply. The key points are:
* The software company (Red Sky) sold the software without letting the customer (Kingsway) try it or read any operating documents
* Kingsway thus bought it based *solely* on the sales advice of Red Sky
* When the software failed to live up Red Sky's promise, Kingsway tried to get their money back
* Red Sky tried to rely on a clause in its standard T&C which said that the only remedy available to customers was to make use of its maintenance and support functions. Thus it said that Kingsway could not sue it for a refund
* The High Court disagreed and said that Red Sky's clause was unfair under the Unfair Contract Terms Act. It said that this Act applied and protected Kingsway because negotiations between the companies had been one-sided on the issue of liability
From TFA:
"Red Sky's' standard terms were predicated on the fact that a prospective customer would investigate Entirety [the software] and make up its own mind whether or not to purchase based on demonstrations and the Operating Documents which Red Sky had previously supplied," said the ruling. "It did not apply to circumstances in which the customer relied on Red Sky's' advice in deciding to purchase Entirety"
In brief: If you are going to make promises about your unseen and untested product, you cannot prohibit the customer from getting a refund if it turns out you misled/misinformed them.
Seems fair to me and it has no real issues for software vendors or OSS people unless they also allow their sales people to make promises that the development team cannot support
That's kind of the point of why this is an interesting / important story. Everyone has those kinds of statements in the EULA, and this judge has ruled that if you're selling a product to do X, it better actually be capable of doing X because no amount of weasel-words gets you out of the fact that you sold someone a product that would do X.
You'd have to read the complete case, not just the headline. If I promise you the software does X, but have a license that says "no warranty whatsoever", and I give you a free 14-day trial where you have a chance to find any faults, then you lose. But if I promise you the software does X, but have a license that says "no warranty whatsoever", and I give you no chance to find any faults before signing the contract, then I lose.
A contract will stand unless it is too unfair. This one was too unfair not because of the words in the contract, but because the buyer had no chance to check the seller's promises.