Feeds

Software liability ruling: 'Supplier beware', says IT brief

Ts & Cs offer chocolate-fireguard grade protection

Build a business case: developing custom apps

Analysis A software developer's assertion that it wasn't liable for the shortcomings of its software has been rejected by the UK High Court in a case that has implications for other vendors and channel partners.

As previously reported, London's Kingsway Hall Hotel had all sorts of problems when it installed hotel management software from Red Sky. Instead of helping to increase revenue and occupancy rates the hotel was obliged to hire extra staff to cope with the shortcomings of the application.

Kingsway eventually decided to ditch the application and find an alternative supplier. It also sued Red Sky for damages over alleged violations of the Sale of Goods Act, which states that purchased goods need to be fit for the purpose for which they are sold. Red Sky relied on its terms and conditions in contesting this suit, arguing its was only responsible for maintenance and support. It resisted attempts to supply a refund and pay Kingsway's extra costs.

However, in a ruling handed down by His Honour Judge Toulmin last week, the High Court sided with Kingsway and against Red Sky. The court ruled that the supplier had mis-sold its product which, regardless of its merits elsewhere, failed to match Kingsway requirements.

Experienced IT lawyer Dai Davis, of solicitors Brooke North, said that the case has implications for software developers and channel sales partners more generally.

"Courts continue to dislike limitations of liability included in contracts or licences," Davis told El Reg.

Contracts for software also invariably include limitations of liability but this does not necessarily means that they will withstand a legal challenge when something goes wrong.

"The wider the limitation (e.g. an exclusion) the more likely the court will strike it down," Davis explained. "Here, the court disliked a clause saying that if the software did not work, the customer (licensee) must look only to support/maintenance for a remedy.  This clause is common in IT contracts, so suppliers should beware!," he added.

Red Sky's sales practices counted against it in the case, Davis concluded. "The case illustrates:that if the supplier fails to inform the customer of the terms & conditions before the contract is entered into, the supplier cannot later rely on those terms & conditions, and in particular on the exclusions in those terms & conditions," he explained. ®

5 things you didn’t know about cloud backup

More from The Register

next story
PEAK LANDFILL: Why tablet gloom is good news for Windows users
Sinofsky's hybrid strategy looks dafter than ever
Leaked Windows Phone 8.1 Update specs tease details of Nokia's next mobes
New screen sizes, dual SIMs, voice over LTE, and more
Fiendishly complex password app extension ships for iOS 8
Just slip it in, won't hurt a bit, 1Password makers urge devs
Mozilla keeps its Beard, hopes anti-gay marriage troubles are now over
Plenty on new CEO's todo list – starting with Firefox's slipping grasp
Apple: We'll unleash OS X Yosemite beta on the MASSES on 24 July
Starting today, regular fanbois will be guinea pigs, it tells Reg
Another day, another Firefox: Version 31 is upon us ALREADY
Web devs, Mozilla really wants you to like this one
Secure microkernel that uses maths to be 'bug free' goes open source
Hacker-repelling, drone-protecting code will soon be yours to tweak as you see fit
Cloudy CoreOS Linux distro declares itself production-ready
Lightweight, container-happy Linux gets first Stable release
prev story

Whitepapers

7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?