[comp.misc] Software ``Contracts''

usenet@cps3xx.UUCP (Usenet file owner) (12/23/88)

In all of this, few people have actually considered the ramifications of
the software ``contract'' itself.  Correct me if I am in error, but does
not the balance of current software ``contracts'' state that:

	The product is not guarenteed to PERFORM in any promised manner,

and that:

	The manufacturer is not responsible for any damages that the
	purchasor might incur through the USE of the software.

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.

If this ``warranty'' were on a car, or a toaster, or a contraceptive, I
certainly wouldn't buy one!  How do software manufacturers get away with
this?  Why do we, as the consuming public, stand for this?

``Inquiring minds want to know!''
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barmar@think.COM (Barry Margolin) (12/23/88)

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.  For example, the disclaimor doesn't
permit them to distribute a program that they KNOW will destroy your
data.  And a program that obviously doesn't do what is described in
the manual is fraud.

Since no one yet knows how to write a non-trivial program without
bugs, these disclaimors are necessary to keep people from suing
because of minor problems.  Without them there would be very little
software published.  Imagine a class action suit by all the people who
bought MS Word 3.0 for the Mac.

Comparing software warranties to car warranties is unfair.  How much
of the software you run on your PC is responsible for your physical
well being?  When your car crashes you can lose your life; if a
spreadsheet crashes you lose a few hours of work.

The clause where they deny responsibility for damaged caused through
the use of the program is another necessity.  Suppose you use a tax
preparation program, and it has a bug that the publisher didn't know
about, and the IRS fines you for filing an incorrect return.  It is
YOUR responsibility to check your own return, and you can't sue the
software publisher for damages.  Even H&R Block has such a proviso
(when I was younger I remember their TV ads offering to pay any fines
for incorrect returns, but I don't know whether they still do).

Another important clause in the disclaimor is the warning about
"suitability".  It is the customer's job to make sure that the program
is appropriate for the task.  Unless the publisher made obviously
fraudulent claims, it's not his fault that you bought a desktop
publishing program when you should have bought a word processor, a
spreadsheet instead of a database, or a simple terminal emulator
when you needed one with extensive script capability.

I'm not a lawyer or a software publisher, so don't quote me on this
stuff.


Barry Margolin
Thinking Machines Corp.

barmar@think.com
{uunet,harvard}!think!barmar

palowoda@megatest.UUCP (Bob Palowoda) (12/23/88)

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.  For example, the disclaimor doesn't
> permit them to distribute a program that they KNOW will destroy your
> data.  And a program that obviously doesn't do what is described in
> the manual is fraud.
> 
> Since no one yet knows how to write a non-trivial program without
> bugs, these disclaimors are necessary to keep people from suing
> because of minor problems.  Without them there would be very little
> software published.  Imagine a class action suit by all the people who
> bought MS Word 3.0 for the Mac.
> 
> Comparing software warranties to car warranties is unfair.  How much
> of the software you run on your PC is responsible for your physical
> well being?  When your car crashes you can lose your life; if a
> spreadsheet crashes you lose a few hours of work.
> 
     I think Barry has made a very important statement in the last
     paragraph. But lets twist it a bit.       
     How much of the software that you are running on your PC is
     responsible for the well being of your business? Now when
     we apply the contract it appears to indemnify the publishers 
     from even the smallest problems. This is the last resort
     that software support departments use if they cannot fit
     a bug fix in the pipe for the next revision.

     So what's all this have to do with copy protection? By my 
     observations after installing several office systems on
     verious networks it has quite evident it has alot to do
     with it. I have watched the owners of the systems buy
     business applications software in the 500 to 1500 range.
     The first time users of software go through the normal 
     learning curve, after that they find the bugs in the software.
     Than they go the software support route, this is where things
     tend to go amuck.   
     
     The aggresive one's are smart enough to know that legal 
     actions will result in a loss by contract. So they take
     alternate action. He/She has two alternatives.
     1.) Go out and buy another software package and make sure 
	 a similiar bug/feature is not there. 
     2.) Scrap the computers and do it manually.

     Simple two alternative's right? Wrong! You can guess what
     the third alternative is. In anycase what ends up happening
     is that they find a better software package to fit there
     needs. Read reviews and go through a much more extensive
     period of evaluation. This is where they find out that all
     software has bugs and they form an idea of least bug per
     package figure. From there they weight in the customer support,
     price and maybe a few rumors about the company. 
     Than they finially go out and buy another package. If the 
     previous software company fixes the bug in the meantime it
     they accept it reluctantly but it still gives them some
     sort of sense for justification on coping software on the next 
     package. If any software publisher/programmer wants to get in the 
     ring and fight this situation they look pretty silly out there
     in front of an audience with no opponenet. 

     Now to reinforce my originial claim that contracts have     
     something to do with copying software.

[some text deleted]
> 
> Another important clause in the disclaimor is the warning about
> "suitability".  It is the customer's job to make sure that the program
> is appropriate for the task.  Unless the publisher made obviously

     What does this statement promote?   

     I do not promote the copying of software nor ignorant clauses
     in software contracts that oppose sales.

     I do favor strong positive customer contacts and some sort of
     software publishing organization that inquires about other 
     software publishing companys support. Something like a 
     consumers report none biased for software evaluation.

     ---Bob

-- 
 Bob Palowoda                               
 Work: {sun,decwrl,pyramid}!megatest!palowoda                           
 Home: {sun,pryamid}aeras!grinch!legends!fiver!palowoda                
 BBS:  (415)656-9386 2400/1200   Voice:(415)656-9384                  

rog@hpcilzb.HP.COM (Roger Haaheim) (12/29/88)

/ hpcilzb:comp.misc / palowoda@megatest.UUCP (Bob Palowoda) /  5:21 am  Dec 23, 1988 /
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.  For example, the disclaimor doesn't
> permit them to distribute a program that they KNOW will destroy your
> data.  And a program that obviously doesn't do what is described in
> the manual is fraud.
> 
> Since no one yet knows how to write a non-trivial program without
> bugs, these disclaimors are necessary to keep people from suing
> because of minor problems.  Without them there would be very little
> software published.  Imagine a class action suit by all the people who
> bought MS Word 3.0 for the Mac.
> 
> Comparing software warranties to car warranties is unfair.  How much
> of the software you run on your PC is responsible for your physical
> well being?  When your car crashes you can lose your life; if a
> spreadsheet crashes you lose a few hours of work.
> 
     I think Barry has made a very important statement in the last
     paragraph. But lets twist it a bit.       
     How much of the software that you are running on your PC is
     responsible for the well being of your business? Now when
     we apply the contract it appears to indemnify the publishers 
     from even the smallest problems. This is the last resort
     that software support departments use if they cannot fit
     a bug fix in the pipe for the next revision.

     So what's all this have to do with copy protection? By my 
     observations after installing several office systems on
     verious networks it has quite evident it has alot to do
     with it. I have watched the owners of the systems buy
     business applications software in the 500 to 1500 range.
     The first time users of software go through the normal 
     learning curve, after that they find the bugs in the software.
     Than they go the software support route, this is where things
     tend to go amuck.   
     
     The aggresive one's are smart enough to know that legal 
     actions will result in a loss by contract. So they take
     alternate action. He/She has two alternatives.
     1.) Go out and buy another software package and make sure 
	 a similiar bug/feature is not there. 
     2.) Scrap the computers and do it manually.

     Simple two alternative's right? Wrong! You can guess what
     the third alternative is. In anycase what ends up happening
     is that they find a better software package to fit there
     needs. Read reviews and go through a much more extensive
     period of evaluation. This is where they find out that all
     software has bugs and they form an idea of least bug per
     package figure. From there they weight in the customer support,
     price and maybe a few rumors about the company. 
     Than they finially go out and buy another package. If the 
     previous software company fixes the bug in the meantime it
     they accept it reluctantly but it still gives them some
     sort of sense for justification on coping software on the next 
     package. If any software publisher/programmer wants to get in the 
     ring and fight this situation they look pretty silly out there
     in front of an audience with no opponenet. 

     Now to reinforce my originial claim that contracts have     
     something to do with copying software.

[some text deleted]
> 
> Another important clause in the disclaimor is the warning about
> "suitability".  It is the customer's job to make sure that the program
> is appropriate for the task.  Unless the publisher made obviously

     What does this statement promote?   

     I do not promote the copying of software nor ignorant clauses
     in software contracts that oppose sales.

     I do favor strong positive customer contacts and some sort of
     software publishing organization that inquires about other 
     software publishing companys support. Something like a 
     consumers report none biased for software evaluation.

     ---Bob

-- 
 Bob Palowoda                               
 Work: {sun,decwrl,pyramid}!megatest!palowoda                           
 Home: {sun,pryamid}aeras!grinch!legends!fiver!palowoda                
 BBS:  (415)656-9386 2400/1200   Voice:(415)656-9384                  
----------

peter@thirdi.UUCP (Peter Rowell) (12/30/88)

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