EULA
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Hi, We have a possible customer who is complaining about one clause of our EULA. This is what our customer says: Clause 9 - don't like this clause at all. Last para says that they are limited to the license fee and yet the 1st para mentions that they will not be liable for ANY damages including DIRECT damage. So, at the end of the day, are they telling that we use their software at our company's own risk - not prepared to accept that. Our clause #9 is below for your reference. I’ve seen many licenses that include clauses very similar to ours. I will really appreciate any advice on this issue. Thanks, Carlos 9 Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES SUFFERED BY LICENSEE OR ANY THIRD PARTY AS A RESULT OF USING OR DISTRIBUTING SOFTWARE. IN NO EVENT AND UNDER NO CIRCUMSTANCES WILL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT OR DATA, OR FOR DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOSS OF GOODWILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, TORT, CONTRACT, OR OTHERWISE, ARISING OUT OF THE USE OF, MISUSE OF OR INABILITY TO USE SOFTWARE, EVEN IF OUR COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN SOME JURISDICTIONS THIS MAY NOT APPLY TO LICENSEE AND LICENSEE MAY HAVE OTHER LEGAL RIGHTS THAT ARE BY JURISDICTION. In no event will our company's liability to Licensee, whether in contract, tort (including negligence), or otherwise exceed the total price paid for the software to our company by Licensee for the twelve (12) months preceding the event giving rise to the claim. No action, whether in contract or tort including but not limited to negligence, arising out of or in connection with this Agreement may be brought by either party more than six (6) months after the cause of action has accrued.
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Hi, We have a possible customer who is complaining about one clause of our EULA. This is what our customer says: Clause 9 - don't like this clause at all. Last para says that they are limited to the license fee and yet the 1st para mentions that they will not be liable for ANY damages including DIRECT damage. So, at the end of the day, are they telling that we use their software at our company's own risk - not prepared to accept that. Our clause #9 is below for your reference. I’ve seen many licenses that include clauses very similar to ours. I will really appreciate any advice on this issue. Thanks, Carlos 9 Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES SUFFERED BY LICENSEE OR ANY THIRD PARTY AS A RESULT OF USING OR DISTRIBUTING SOFTWARE. IN NO EVENT AND UNDER NO CIRCUMSTANCES WILL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT OR DATA, OR FOR DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOSS OF GOODWILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, TORT, CONTRACT, OR OTHERWISE, ARISING OUT OF THE USE OF, MISUSE OF OR INABILITY TO USE SOFTWARE, EVEN IF OUR COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN SOME JURISDICTIONS THIS MAY NOT APPLY TO LICENSEE AND LICENSEE MAY HAVE OTHER LEGAL RIGHTS THAT ARE BY JURISDICTION. In no event will our company's liability to Licensee, whether in contract, tort (including negligence), or otherwise exceed the total price paid for the software to our company by Licensee for the twelve (12) months preceding the event giving rise to the claim. No action, whether in contract or tort including but not limited to negligence, arising out of or in connection with this Agreement may be brought by either party more than six (6) months after the cause of action has accrued.
It sounds perfectly reasonable to me. You won't extend your liability to any lost revenue or costs incured by any problem with the software, but you will be liable for a refund of the full cost. AFAIK that's your minimum legal requirement anyway (in England). Companies can isntall other software or hardware that causes problems, users can make errors and cause problems, there oculd be a power cut during a file operation, etc. Why would any software company readily take on liability for events like that. Your client should take out their own insurance. Offer to sell this customer an extended liability contract, limited to number like $2 million, and charge them $2 million for it. If they don't claim after ten years, give them a 10% refund. Ok so more seriously, you can take out insurance against liability for cause-and-effect (I don't remember the right term for that, sorry). You pick a liability amount and pay a recurring premium, just like most other insurances, but for high risk businesses like software development expect higher premiums. I would not operate a software company without one - some places in the world don't allow you to limit your liability as much and clients can always try and contest it in court which is expensive. If you get/have the insurance then you could consider offering extended liability in your contracts. You don't have to do it for free, where not required by law.
Ðavid Wulff The Royal Woofle Museum
Audioscrobbler :: flickrDie Freiheit spielt auf allen Geigen
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Hi, We have a possible customer who is complaining about one clause of our EULA. This is what our customer says: Clause 9 - don't like this clause at all. Last para says that they are limited to the license fee and yet the 1st para mentions that they will not be liable for ANY damages including DIRECT damage. So, at the end of the day, are they telling that we use their software at our company's own risk - not prepared to accept that. Our clause #9 is below for your reference. I’ve seen many licenses that include clauses very similar to ours. I will really appreciate any advice on this issue. Thanks, Carlos 9 Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES SUFFERED BY LICENSEE OR ANY THIRD PARTY AS A RESULT OF USING OR DISTRIBUTING SOFTWARE. IN NO EVENT AND UNDER NO CIRCUMSTANCES WILL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT OR DATA, OR FOR DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOSS OF GOODWILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, TORT, CONTRACT, OR OTHERWISE, ARISING OUT OF THE USE OF, MISUSE OF OR INABILITY TO USE SOFTWARE, EVEN IF OUR COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN SOME JURISDICTIONS THIS MAY NOT APPLY TO LICENSEE AND LICENSEE MAY HAVE OTHER LEGAL RIGHTS THAT ARE BY JURISDICTION. In no event will our company's liability to Licensee, whether in contract, tort (including negligence), or otherwise exceed the total price paid for the software to our company by Licensee for the twelve (12) months preceding the event giving rise to the claim. No action, whether in contract or tort including but not limited to negligence, arising out of or in connection with this Agreement may be brought by either party more than six (6) months after the cause of action has accrued.
What David is trying to say is the customer is a moron, and you should just tell the guy to send the software back. If he's being a pinhead over the EULA, he's going to become an ulcerous hemmorroid over everything he consideres to be a bug (even if it's not a bug). ------- sig starts "I've heard some drivers saying, 'We're going too fast here...'. If you're not here to race, go the hell home - don't come here and grumble about going too fast. Why don't you tie a kerosene rag around your ankles so the ants won't climb up and eat your candy ass..." - Dale Earnhardt "...the staggering layers of obscenity in your statement make it a work of art on so many levels." - Jason Jystad, 10/26/2001
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What David is trying to say is the customer is a moron, and you should just tell the guy to send the software back. If he's being a pinhead over the EULA, he's going to become an ulcerous hemmorroid over everything he consideres to be a bug (even if it's not a bug). ------- sig starts "I've heard some drivers saying, 'We're going too fast here...'. If you're not here to race, go the hell home - don't come here and grumble about going too fast. Why don't you tie a kerosene rag around your ankles so the ants won't climb up and eat your candy ass..." - Dale Earnhardt "...the staggering layers of obscenity in your statement make it a work of art on so many levels." - Jason Jystad, 10/26/2001
I agree here. The license agreement is for ALL your customers. If you make side agreements with this one (even for extra money) and have not offered that option to other previous customers then you might end up getting yourself in more hot water than it ends up being worth. I obviously have no idea how much you are charging for your SW, how much of a margin you are making on it, nor what your SW even does, but it sounds to me like this customer might be one best walked away from. Sometimes it is best to just walk away from a sale. I always like to say that 'customers can be fired just like employees'. Give someone their money back or don't sell them the software at all and you do two things. 1) You can end up saving your self a tone of cash form future support headaches. 2) You can end up pushing them to buy from a competitor. In the short term this might sound bad (because you loose the sale) but in the long run it could end up being worth it. Let them be a drain on your competition.
George Carlin wrote: "Don't sweat the petty things, and don't pet the sweaty things." Jörgen Sigvardsson wrote: If the physicists find a universal theory describing the laws of universe, I'm sure the asshole constant will be an integral part of that theory.
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Hi, We have a possible customer who is complaining about one clause of our EULA. This is what our customer says: Clause 9 - don't like this clause at all. Last para says that they are limited to the license fee and yet the 1st para mentions that they will not be liable for ANY damages including DIRECT damage. So, at the end of the day, are they telling that we use their software at our company's own risk - not prepared to accept that. Our clause #9 is below for your reference. I’ve seen many licenses that include clauses very similar to ours. I will really appreciate any advice on this issue. Thanks, Carlos 9 Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES SUFFERED BY LICENSEE OR ANY THIRD PARTY AS A RESULT OF USING OR DISTRIBUTING SOFTWARE. IN NO EVENT AND UNDER NO CIRCUMSTANCES WILL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT OR DATA, OR FOR DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOSS OF GOODWILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, TORT, CONTRACT, OR OTHERWISE, ARISING OUT OF THE USE OF, MISUSE OF OR INABILITY TO USE SOFTWARE, EVEN IF OUR COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN SOME JURISDICTIONS THIS MAY NOT APPLY TO LICENSEE AND LICENSEE MAY HAVE OTHER LEGAL RIGHTS THAT ARE BY JURISDICTION. In no event will our company's liability to Licensee, whether in contract, tort (including negligence), or otherwise exceed the total price paid for the software to our company by Licensee for the twelve (12) months preceding the event giving rise to the claim. No action, whether in contract or tort including but not limited to negligence, arising out of or in connection with this Agreement may be brought by either party more than six (6) months after the cause of action has accrued.
Nothing unusual about that at all. The customer hasn't seen very many license agreements apparently because that is pretty standard. To me this would be a warning bell that they will be a problem client because they are not familiar with the way software companies do business and so their expectations will probably always be out of alignment with what you can deliver. In your position I would explain to them that if they are uncomfortable with it they should look at alternative software from another vendor but that if they examine those vendors license agreements they will find that they are nearly identical in this respect and if they are not then those companies are the sort of companies that are failing to take the most basic legal protection for themselves which might reflect negatively on their policies and actions in other areas. Do not under any circumstances change/alter or remove any clause to please a customer. These are *exactly* the sort of customers you don't want to give away your rights to protection to because they will likely take advantage of it. Any company that doesn't take the most stringent protection policies available within the law is not a company that I would want to deal with, it shows a lack of professionalism that is pretty scary. If you had a lawyer draw up the agreement you already know it's the right thing to do, if you didn't then it's possible there are clauses that are not supportable within the jurisdiction you are in, some people just copy a license agreement from commercial software but they have to be very careful because these agreements always apply within a certain jurisdiction and so they must be drawn up to conform to that jurisdiction. Lawyers that specialize in software license agreements are expense but worth every penny if the shit hits the fan.
"In our civilization, and under our republican form of government, intelligence is so highly honored that it is rewarded by exemption from the cares of office." - Ambrose Bierce
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I agree here. The license agreement is for ALL your customers. If you make side agreements with this one (even for extra money) and have not offered that option to other previous customers then you might end up getting yourself in more hot water than it ends up being worth. I obviously have no idea how much you are charging for your SW, how much of a margin you are making on it, nor what your SW even does, but it sounds to me like this customer might be one best walked away from. Sometimes it is best to just walk away from a sale. I always like to say that 'customers can be fired just like employees'. Give someone their money back or don't sell them the software at all and you do two things. 1) You can end up saving your self a tone of cash form future support headaches. 2) You can end up pushing them to buy from a competitor. In the short term this might sound bad (because you loose the sale) but in the long run it could end up being worth it. Let them be a drain on your competition.
George Carlin wrote: "Don't sweat the petty things, and don't pet the sweaty things." Jörgen Sigvardsson wrote: If the physicists find a universal theory describing the laws of universe, I'm sure the asshole constant will be an integral part of that theory.
My Blog[^]
Ray Cassick wrote: Sometimes it is best to just walk away from a sale. We have *always* instituted this policy after our custom software days when we tried to please everyone to make a sale and it was nearly ruinous. It feels hard to do at first but after a while it get's much easier to politely refuse and it makes for much happier customers in the long run because everyone's expectations are met. Trying to meet unreasonable or unsupportable expectations just to make a sale is a common business error that is easily avoided. I agree with you completely, especially the point about pushing "bad" customers to the competition. It's a fact that they will be just as unreasonable or draining no matter who they go to, in most cases as long as you know you are doing everything you can to be a good company and getting positive feedback from your clients.
"In our civilization, and under our republican form of government, intelligence is so highly honored that it is rewarded by exemption from the cares of office." - Ambrose Bierce
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What David is trying to say is the customer is a moron, and you should just tell the guy to send the software back. If he's being a pinhead over the EULA, he's going to become an ulcerous hemmorroid over everything he consideres to be a bug (even if it's not a bug). ------- sig starts "I've heard some drivers saying, 'We're going too fast here...'. If you're not here to race, go the hell home - don't come here and grumble about going too fast. Why don't you tie a kerosene rag around your ankles so the ants won't climb up and eat your candy ass..." - Dale Earnhardt "...the staggering layers of obscenity in your statement make it a work of art on so many levels." - Jason Jystad, 10/26/2001
I've had a few customers like that, the more you give the more (and more) they take :suss: The tigress is here :-D
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Hi, We have a possible customer who is complaining about one clause of our EULA. This is what our customer says: Clause 9 - don't like this clause at all. Last para says that they are limited to the license fee and yet the 1st para mentions that they will not be liable for ANY damages including DIRECT damage. So, at the end of the day, are they telling that we use their software at our company's own risk - not prepared to accept that. Our clause #9 is below for your reference. I’ve seen many licenses that include clauses very similar to ours. I will really appreciate any advice on this issue. Thanks, Carlos 9 Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES SUFFERED BY LICENSEE OR ANY THIRD PARTY AS A RESULT OF USING OR DISTRIBUTING SOFTWARE. IN NO EVENT AND UNDER NO CIRCUMSTANCES WILL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT OR DATA, OR FOR DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOSS OF GOODWILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, TORT, CONTRACT, OR OTHERWISE, ARISING OUT OF THE USE OF, MISUSE OF OR INABILITY TO USE SOFTWARE, EVEN IF OUR COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN SOME JURISDICTIONS THIS MAY NOT APPLY TO LICENSEE AND LICENSEE MAY HAVE OTHER LEGAL RIGHTS THAT ARE BY JURISDICTION. In no event will our company's liability to Licensee, whether in contract, tort (including negligence), or otherwise exceed the total price paid for the software to our company by Licensee for the twelve (12) months preceding the event giving rise to the claim. No action, whether in contract or tort including but not limited to negligence, arising out of or in connection with this Agreement may be brought by either party more than six (6) months after the cause of action has accrued.
Well, all that legalese reduces to "don't sue us if it screwed up your business, and at most, you can get your money back if purchased with the last year". And, standard as it is, it IS interesting to me that software has such clauses. Of course, we would all be lawyers debating whether the customer used the software correctly, or even better, whose software is to blame! But, gosh darnit (no soapbox here) we have all lost countless hours because of some stupid bug in someone's software, and there isn't any way to get compensated for that time. Personally, I think that's WRONG. Other industries, if the water pipe seals are bad and all the houses in your development need to pipe fittings, you bet your tush that you're not going to foot the bill yourself! What we need is some sort of balance that puts some responsibility back to the company that makes the software and gives us victims the ability to be compensated for their bad programming, but also doesn't end up just making the lawyers rich. To that, I have no answer. Marc MyXaml Advanced Unit Testing YAPO
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Well, all that legalese reduces to "don't sue us if it screwed up your business, and at most, you can get your money back if purchased with the last year". And, standard as it is, it IS interesting to me that software has such clauses. Of course, we would all be lawyers debating whether the customer used the software correctly, or even better, whose software is to blame! But, gosh darnit (no soapbox here) we have all lost countless hours because of some stupid bug in someone's software, and there isn't any way to get compensated for that time. Personally, I think that's WRONG. Other industries, if the water pipe seals are bad and all the houses in your development need to pipe fittings, you bet your tush that you're not going to foot the bill yourself! What we need is some sort of balance that puts some responsibility back to the company that makes the software and gives us victims the ability to be compensated for their bad programming, but also doesn't end up just making the lawyers rich. To that, I have no answer. Marc MyXaml Advanced Unit Testing YAPO
Good point, but that's too problematic. Say, your client comes and claims your software corrupted database/deleted crucial data. How do you know if it was your software that did it or if some uneducated user accidently deleted it himself? How do you even know if your software was involved at all and it was not MSSQL/their buggy hardware that caused failure? It's too easy to abuse the right to sue the company if something went wrong, even if it was not your fault at all. Even if you decide to fight it, it would be extremely problematic to fight it in court because of the lack of the concrete evidence, but the costs would be enormous. If the company is relatively small even one such case could drive it out of business. The only possible compromise I see if the company does not take responsibility for loss/damage, but responds to every customer complain within 24 business hours or something along those lines, otherwise some sort of partial refund. Not a perfect solution but at least it will ensure quality customer service.
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Well, all that legalese reduces to "don't sue us if it screwed up your business, and at most, you can get your money back if purchased with the last year". And, standard as it is, it IS interesting to me that software has such clauses. Of course, we would all be lawyers debating whether the customer used the software correctly, or even better, whose software is to blame! But, gosh darnit (no soapbox here) we have all lost countless hours because of some stupid bug in someone's software, and there isn't any way to get compensated for that time. Personally, I think that's WRONG. Other industries, if the water pipe seals are bad and all the houses in your development need to pipe fittings, you bet your tush that you're not going to foot the bill yourself! What we need is some sort of balance that puts some responsibility back to the company that makes the software and gives us victims the ability to be compensated for their bad programming, but also doesn't end up just making the lawyers rich. To that, I have no answer. Marc MyXaml Advanced Unit Testing YAPO
Marc Clifton wrote: But, gosh darnit (no soapbox here) we have all lost countless hours because of some stupid bug in someone's software, and there isn't any way to get compensated for that time. Of course, if your idyllic software environment were implemented, Microsoft would have long ago gone out of business. I agree that programmers should be held to higher standards, but in order for that to payoff, someone would have to put the marketing nazis in their place, knock management down a peg or two on the annoyance scale, present said programmers with reasonable deadlines for properly planned development projects, conduct proper reviews as the project progresses, and properly awarding employess with not only decent pay but loyalty. On top of all that, they would need access to every line of source code even remotely associated wuith their application so that can fix OS bugs as well. Ya know what? I've NEVER seen a development project that was conducted in such a way... ------- sig starts "I've heard some drivers saying, 'We're going too fast here...'. If you're not here to race, go the hell home - don't come here and grumble about going too fast. Why don't you tie a kerosene rag around your ankles so the ants won't climb up and eat your candy ass..." - Dale Earnhardt "...the staggering layers of obscenity in your statement make it a work of art on so many levels." - Jason Jystad, 10/26/2001
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Hi, We have a possible customer who is complaining about one clause of our EULA. This is what our customer says: Clause 9 - don't like this clause at all. Last para says that they are limited to the license fee and yet the 1st para mentions that they will not be liable for ANY damages including DIRECT damage. So, at the end of the day, are they telling that we use their software at our company's own risk - not prepared to accept that. Our clause #9 is below for your reference. I’ve seen many licenses that include clauses very similar to ours. I will really appreciate any advice on this issue. Thanks, Carlos 9 Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES SUFFERED BY LICENSEE OR ANY THIRD PARTY AS A RESULT OF USING OR DISTRIBUTING SOFTWARE. IN NO EVENT AND UNDER NO CIRCUMSTANCES WILL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT OR DATA, OR FOR DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOSS OF GOODWILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, TORT, CONTRACT, OR OTHERWISE, ARISING OUT OF THE USE OF, MISUSE OF OR INABILITY TO USE SOFTWARE, EVEN IF OUR COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN SOME JURISDICTIONS THIS MAY NOT APPLY TO LICENSEE AND LICENSEE MAY HAVE OTHER LEGAL RIGHTS THAT ARE BY JURISDICTION. In no event will our company's liability to Licensee, whether in contract, tort (including negligence), or otherwise exceed the total price paid for the software to our company by Licensee for the twelve (12) months preceding the event giving rise to the claim. No action, whether in contract or tort including but not limited to negligence, arising out of or in connection with this Agreement may be brought by either party more than six (6) months after the cause of action has accrued.
If you are selling software to a corporation and they are actually paying attention to the contract because of the dollar value of the software you are selling, or because it represents something truly significant to them, almost all will require you to accept some liability in the case of failure. Trust me, I do this every day. Most standard shrink wrap agreements for software carry clauses like the one you have outlined and most of the time nobody reads them, clicks through all of the agreements and never gives it another though. I think our industry is pretty unique in this regard. So your choices in dealing with this seemlingly informed customer are to walk on the deal (which I would if there wasn't much money on the table) or to negotiate something you are comfortable with. One thing you may want to do as part of the negotations is to add another clause to your agreement that the customer acknowledges that they have fully reviewed and tested the software to their satisfaction, and have formally accepted it as being suitable for their use or have engaged a capable third party to do so. You may also add something that has the customer acknowledge that no software product is delivered without bugs or other flaws and they they are accepting the software with that understanding. David
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Hi, We have a possible customer who is complaining about one clause of our EULA. This is what our customer says: Clause 9 - don't like this clause at all. Last para says that they are limited to the license fee and yet the 1st para mentions that they will not be liable for ANY damages including DIRECT damage. So, at the end of the day, are they telling that we use their software at our company's own risk - not prepared to accept that. Our clause #9 is below for your reference. I’ve seen many licenses that include clauses very similar to ours. I will really appreciate any advice on this issue. Thanks, Carlos 9 Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES SUFFERED BY LICENSEE OR ANY THIRD PARTY AS A RESULT OF USING OR DISTRIBUTING SOFTWARE. IN NO EVENT AND UNDER NO CIRCUMSTANCES WILL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT OR DATA, OR FOR DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOSS OF GOODWILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, TORT, CONTRACT, OR OTHERWISE, ARISING OUT OF THE USE OF, MISUSE OF OR INABILITY TO USE SOFTWARE, EVEN IF OUR COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN SOME JURISDICTIONS THIS MAY NOT APPLY TO LICENSEE AND LICENSEE MAY HAVE OTHER LEGAL RIGHTS THAT ARE BY JURISDICTION. In no event will our company's liability to Licensee, whether in contract, tort (including negligence), or otherwise exceed the total price paid for the software to our company by Licensee for the twelve (12) months preceding the event giving rise to the claim. No action, whether in contract or tort including but not limited to negligence, arising out of or in connection with this Agreement may be brought by either party more than six (6) months after the cause of action has accrued.
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Good point, but that's too problematic. Say, your client comes and claims your software corrupted database/deleted crucial data. How do you know if it was your software that did it or if some uneducated user accidently deleted it himself? How do you even know if your software was involved at all and it was not MSSQL/their buggy hardware that caused failure? It's too easy to abuse the right to sue the company if something went wrong, even if it was not your fault at all. Even if you decide to fight it, it would be extremely problematic to fight it in court because of the lack of the concrete evidence, but the costs would be enormous. If the company is relatively small even one such case could drive it out of business. The only possible compromise I see if the company does not take responsibility for loss/damage, but responds to every customer complain within 24 business hours or something along those lines, otherwise some sort of partial refund. Not a perfect solution but at least it will ensure quality customer service.
JazzJackRabbit wrote: How do you know if it was your software that did it or if some uneducated user accidently deleted it himself? How do you even know if your software was involved at all and it was not MSSQL/their buggy hardware that caused failure? IANAL, but you don't have to worry about it: those who make claims need to prove them. So, if you're saying my software trashed your database, prove it. JazzJackRabbit wrote: If the company is relatively small even one such case could drive it out of business. That's why you shouldn't sell your software for a low price. BTW, there are places where such liability limit clauses are void. I see dead pixels Yes, even I am blogging now!
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Hi, We have a possible customer who is complaining about one clause of our EULA. This is what our customer says: Clause 9 - don't like this clause at all. Last para says that they are limited to the license fee and yet the 1st para mentions that they will not be liable for ANY damages including DIRECT damage. So, at the end of the day, are they telling that we use their software at our company's own risk - not prepared to accept that. Our clause #9 is below for your reference. I’ve seen many licenses that include clauses very similar to ours. I will really appreciate any advice on this issue. Thanks, Carlos 9 Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES SUFFERED BY LICENSEE OR ANY THIRD PARTY AS A RESULT OF USING OR DISTRIBUTING SOFTWARE. IN NO EVENT AND UNDER NO CIRCUMSTANCES WILL OUR COMPANY OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT OR DATA, OR FOR DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOSS OF GOODWILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, TORT, CONTRACT, OR OTHERWISE, ARISING OUT OF THE USE OF, MISUSE OF OR INABILITY TO USE SOFTWARE, EVEN IF OUR COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN SOME JURISDICTIONS THIS MAY NOT APPLY TO LICENSEE AND LICENSEE MAY HAVE OTHER LEGAL RIGHTS THAT ARE BY JURISDICTION. In no event will our company's liability to Licensee, whether in contract, tort (including negligence), or otherwise exceed the total price paid for the software to our company by Licensee for the twelve (12) months preceding the event giving rise to the claim. No action, whether in contract or tort including but not limited to negligence, arising out of or in connection with this Agreement may be brought by either party more than six (6) months after the cause of action has accrued.
You meed to insert the standard clause that I have seen in every hardware and software purchase agreement. "The seller provides no warranty of merchanitibility or fitness of purpose for the products sold under this contract blah blah blah blah...." The vendor is saying (I think) he is not sure this product will fit your needs or fit anybody's needs. He is not sure it is a product that anybody in good conscience would sell. Not a single company I have dealt with was willing to strike this clause off from the contract. PS. Unix freaks and NT worshippers might agree that IBM properly represented its mainframe products with the above disclaimer! ;P
