Warranty Clause In Software Agreement

abril 14, 2021 Agustin

Market practices vary considerably from standard software and customer-specific software to the extent of warranty protection, which is generally offered. While mass software providers offer very limited warranty protection (or, in some cases, not at all by simply saying that the software is made available as such), leveraged customers or those who purchase custom software may require vendors to guarantee a number of software licensing agreements that typically provide the customer with limited and proprietary corrective action when the software is defective. For example, the vendor will correct or replace the defective software (so that the software essentially matches the existing documentation), either terminate the customer`s license for the use of the defective software and reimburse the license fee paid by the customer for the terminated license. Limited corrective actions are generally comprehensive and expressly exclude any other corrective action, including financial compensation for losses and damage caused to the customer by the defective software. Limitation of liability: Most software licenses and service agreements limit the monetary liability that may result from the violation of the above guarantees. This amount is usually: – the licence or service fees paid in the last six to twelve months from the date of the breach; or – a certain amount agreed by mutual agreement between the parties; Aggregate taxes paid for the duration of the contract. Limited warranties and disclaimers limit the customer`s rights and remedies when the licensed software is defective or does not meet the specific requirements of the customer. When negotiating a software license agreement, a customer should ensure that the vendor`s software quality promises accurately reflect the vendor`s commitments during sales and negotiation presentations, and that the customer`s corresponding rights and corrective actions are reasonable and appropriate. The client should also consider how to manage and reduce risks through other prudent contractual rights and business practices.

The guarantees mentioned above are only clear and can sometimes be one-sided. Software contracts may also include explicit clauses to reflect the fact that the services or product conceded correspond to the specifications agreed upon by the seller and the customer. Depending on the size of the agreement, virus guarantees are also granted when products (or delivery components) are developed in the environment or on the supplier`s premises. In the case of a breach of warranty for the products granted or the services provided, the remedy, which is generally accepted, is stated above: There are however risks when searching for bare minimum guarantees. When most licensees see these general guarantees, they generally do not negotiate more than is indicated here. Remember, the warranty area is the contract provision that deals with software performance and service delivery. These are very important concepts, because a whole range of things can go wrong (for example.B. there may be errors, downtime or performance errors, etc.).

This practice opinion takes into account the main legal and commercial issues that may arise in the context of business-to-business when developing and negotiating guarantees and compensation, both for standard and standard software licenses, as well as more complex agreements. A warranty is one of the most important contractual provisions in a software contract.