Feeds

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

Ts & Cs offer chocolate-fireguard grade protection

Boost IT visibility and business value

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. ®

Application security programs and practises

More from The Register

next story
HIDDEN packet sniffer spy tech in MILLIONS of iPhones, iPads – expert
Don't panic though – Apple's backdoor is not wide open to all, guru tells us
Apple fanbois SCREAM as update BRICKS their Macbook Airs
Ragegasm spills over as firmware upgrade kills machines
Captain Kirk sets phaser to SLAUGHTER after trying new Facebook app
William Shatner less-than-impressed by Zuck's celebrity-only app
Do YOU work at Microsoft? Um. Are you SURE about that?
Nokia and marketing types first to get the bullet, says report
Microsoft takes on Chromebook with low-cost Windows laptops
Redmond's chief salesman: We're taking 'hard' decisions
Cheer up, Nokia fans. It can start making mobes again in 18 months
The real winner of the Nokia sale is *drumroll* ... Nokia
EU dons gloves, pokes Google's deals with Android mobe makers
El Reg cops a squint at investigatory letters
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
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.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.