How to exclude the validity of implied warranties in a software development contract (Part 3)
If anyone remembers, in the first part of my article on warranties, I mentioned “implied warranties” ( Implied Warranties ), which are automatically part of software development contracts, because they are enshrined in law. Under British law, these guarantees are enshrined in The Sale of Goods Act 1979 and The Supply of Goods and Services Act 1982 . I recall that the “Implied Warranties” include: 1) Warranty of Title, 2) Infringement Warranty, 3) Warranty of Merchantability, 4) Warranty of fitness for a specific Purpose. We talked about the fact that if we do not directly exclude the validity of these guarantees, they will apply to legal relations within the framework of this contract. Now I propose to consider options for the exclusion of these implied warranties.
First of all, it is worth noting that if we are talking about UK law, then all exceptions to “warranties” must comply with the requirements imposed by UTCA (Unfair Contract Terms Act 1977) . According to UTCA, some “implied warranties” cannot be excluded at all (for example, “Warranty of Title” ), and some, can be excluded only expediently - “only if reasonable” (for example, “Warranty of fitness for specific specific " ). If the court comes to the conclusion that the condition on the exclusion of the guarantee is contrary to the requirements of this regulatory act, then this condition will be considered invalid. In order to avoid the risks associated with violation of UTCA, and in order to ensure the exclusion of the maximum number of warranty obligations, the developer can use the following design: "Other warranties" .
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1. “EXCEPT FOR THE EXPRESS OF WARRANTIES SPECIFIED IN THIS SECTION, PROVIDER MAKES NO WARRANTIES”
The use of capital letters when expressing the exclusion clause “warranties” is a well-established contract practice in the United States and the United Kingdom.
2. “RECIPIENT ACCEPTS THE GOODS“ AS IS, ”WITH NO REPRESENTATION OR EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
Disclaimer “ AS IS ” in the trade turnover means that the goods are transferred to the property “as is”, i.e. without any warranty.
3. “Provider doesn’t need to be warrant The Provider doesn’t need to be taken for any reason; or “b)”
In this example we are talking about the fact that it is impractical to guarantee that the software developed is an unmistakable product. Defects are different and, in my opinion, promise to the customer that the software is free from material defects (“ material defects ”) is quite enough.
Naturally, it is necessary to reflect in the contract or in the Statement of Work, which is recognized as a significant defect. The defect classification "blocker-major -minor" and the precise definition of " Acceptance Criteria " will be sufficient to resolve this issue.
4. "Provider:" Provides (“Third Party Components”); and (b) will cooperatively with such rights. It’s not a problem. ”
In this example, the developer is not responsible for the risks associated with the functioning of components that belong to a third party.
5. "Provider of Windows XP" is not warranting
Here the customer does not guarantee interoperability with operating systems other than Windows XP.
1) The developer must clearly define his position regarding the guarantees he can give to the customer. Exclusion of all guarantees is the least risky approach, but the customer is unlikely to agree to pay for a product, the acceptable functioning of which is not supported by any legal means.
2) You should not use the full range of possible guarantees. Sufficiently expedient and necessary guarantees that are suitable for your particular case and will give your counterparty the assurance of guarantee security.
Links to other parts of the article:
1) Guarantee of software performance in an English-language contract (Part 1)
habrahabr.ru/blogs/pm/134007
2) Guarantee of observance of the rights of third parties in an English-language software development contract (Part 2) habrahabr.ru/blogs/pm/134476
First of all, it is worth noting that if we are talking about UK law, then all exceptions to “warranties” must comply with the requirements imposed by UTCA (Unfair Contract Terms Act 1977) . According to UTCA, some “implied warranties” cannot be excluded at all (for example, “Warranty of Title” ), and some, can be excluded only expediently - “only if reasonable” (for example, “Warranty of fitness for specific specific " ). If the court comes to the conclusion that the condition on the exclusion of the guarantee is contrary to the requirements of this regulatory act, then this condition will be considered invalid. In order to avoid the risks associated with violation of UTCA, and in order to ensure the exclusion of the maximum number of warranty obligations, the developer can use the following design: "Other warranties" .
Examples of warranties exclusion clauses:
')
1. “EXCEPT FOR THE EXPRESS OF WARRANTIES SPECIFIED IN THIS SECTION, PROVIDER MAKES NO WARRANTIES”
The use of capital letters when expressing the exclusion clause “warranties” is a well-established contract practice in the United States and the United Kingdom.
2. “RECIPIENT ACCEPTS THE GOODS“ AS IS, ”WITH NO REPRESENTATION OR EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
Disclaimer “ AS IS ” in the trade turnover means that the goods are transferred to the property “as is”, i.e. without any warranty.
3. “Provider doesn’t need to be warrant The Provider doesn’t need to be taken for any reason; or “b)”
In this example we are talking about the fact that it is impractical to guarantee that the software developed is an unmistakable product. Defects are different and, in my opinion, promise to the customer that the software is free from material defects (“ material defects ”) is quite enough.
Naturally, it is necessary to reflect in the contract or in the Statement of Work, which is recognized as a significant defect. The defect classification "blocker-major -minor" and the precise definition of " Acceptance Criteria " will be sufficient to resolve this issue.
4. "Provider:" Provides (“Third Party Components”); and (b) will cooperatively with such rights. It’s not a problem. ”
In this example, the developer is not responsible for the risks associated with the functioning of components that belong to a third party.
5. "Provider of Windows XP" is not warranting
Here the customer does not guarantee interoperability with operating systems other than Windows XP.
FINDINGS:
1) The developer must clearly define his position regarding the guarantees he can give to the customer. Exclusion of all guarantees is the least risky approach, but the customer is unlikely to agree to pay for a product, the acceptable functioning of which is not supported by any legal means.
2) You should not use the full range of possible guarantees. Sufficiently expedient and necessary guarantees that are suitable for your particular case and will give your counterparty the assurance of guarantee security.
Links to other parts of the article:
1) Guarantee of software performance in an English-language contract (Part 1)
habrahabr.ru/blogs/pm/134007
2) Guarantee of observance of the rights of third parties in an English-language software development contract (Part 2) habrahabr.ru/blogs/pm/134476
Source: https://habr.com/ru/post/135196/
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