WELCOME TO OUR WEBINAR. PRINCIPLES OF THE LAW OF SOFTWARE CONTRACTS. Monday, June 29, 2009 | 9:00 a.m. PST. *This webinar is offered for informational purposes only, and the content should not be construed as legal advice on any matter. PRINCIPLES OF THE LAW OF SOFTWARE CONTRACTS.
Mark RadcliffePartnerCorporate and SecuritiesDLA Piper
Jeffrey SternExecutive DirectorLaw DivisionMorgan Stanley
Karen CopenhaverPartnerChoate, Hall & Stewart LLP
CHOATE HALL & STEWART LLP
Letter on behalf of OSI and the Linux Foundation
Letter on behalf of Microsoft and the Linux Foundation
Letter on behalf of ITPEC
“A transferor that receives money or a right to payment of a monetary obligation in exchange for the software warrants to any party in the normal chain of distribution that the software contains no material hidden defects of which the transferor was aware at the time of the transfer. This warranty may not be excluded. In addition, this warranty does not displace an action for misrepresentation or its remedies.”
The Principles explain that “[a] defect exists if the software is not fit for its ordinary purposes” and that “[n]egligence on the part of transferors in failing to discover defects is not covered by the Section and is the subject of products-liability law.” The Principles state, “[s]oftware that requires major workaround to achieve contract-promised functionality and causes long periods of downtime or never achieves promised functionality ordinarily would constitute a material defect.” The Principles state that this new, non-disclaimable warranty does not replace a separate claim for misrepresentation.
* Examples include requirement for businesses to post license terms on Internet, no modification of terms without a “fresh” clickthrough (notice not sufficient), terms must be “reasonably comprehensible” by person of ordinary intelligence, choice of law and forum less likely to be upheld, easier for licensees to override disclaimers including by asserting express warranties, and ban on use of automated disablement