back to article High Court rules software liability clause not 'reasonable'

A software company's stipulation that customers could not take action against it for the poor performance of its software was unfair and could not be enforced, the High Court has said. The software company should have alerted its customer to problems with the product when demonstrating it and chosen more demonstrations for it …


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  1. Anonymous Coward
    Thumb Up

    Good verdict...

    ...occasionally, the law proves it can occasionally be something other than a complete ass.

    Well done that Judge.

  2. frank ly

    Our BS will make your business grow

    "... The IT industry feared that the result would make it harder to make claims for software,... "

    It's not hard to make a claim that can be proven or reasonably demonstrated. It's the marketing bullshit that needs to be pushed back down their throats.

  3. Ian Ferguson
    Thumb Up


    This is a fantastic outcome. The number of times I've been outright lied to at software demos is astonishing. I do hope substandard vendors take note of this :)

  4. Pete 2 Silver badge

    Could open the flood gates

    .. for victims of every over-hyped and badly documented piece of carp to pursue software vendors. The judgement does seem to say that the onus is on the supplier to provide adequate documentation and where that isn't done, to "know" how the users expect to use it. I also got the impression that the company is being held liable for the claims made in it's sales literature.

    Hopefully we'll see many more software suppliers held to account for bad software, poor support documentation and unrealistic marketing in the future.

  5. G2

    incentive to cut out the crap

    this is a great incentive for the marketing departments to cut out the 'creative' crap they try to push and spin into product descriptions and press releases.

  6. BristolBachelor Gold badge
    Thumb Up

    Breath of fresh air

    This seems entirely sane, and I hope starts a trend where software also has to be fit for purpose, like any other goods or servicees sold by companies.

    However, I have a scarey feeling that the response to this may be to deliver millions of pages of documentation describing everything about the software (like MS interoperability docs) that makes it impossible to find out if something is fit for purpose, but allows the vendor to say that the customer was able to make an informed decision.

  7. Anonymous Coward
    Paris Hilton

    Fit for purpose?

    It seems to be a tricky area.

    For example:

    installed software

    software had insecurities that allowed unauthorised access to important resources

    computer and immediate network became compromised through the newish software

    1. Campbeltonian

      Re: Fit for purpose?

      It sounds like you're stretching the definition a bit.

      A web browser that opens all your ports when you browse the web and opens all your ports is still fit for purpose.

      On the other hand, a web browser that crashes every time you try to browse the web is not fit for purpose, that purpose being browsing the web.

  8. Harry
    Thumb Up

    This makes perfect sense.

    Read any advert, no matter whether its for software or not, and you'll usually find that the person who wrote it knew exactly what the person reading it wanted to buy, but had no idea whatsoever about the product it was trying to sell.

    As a perfect and incontrovertible example, we have companies advertising internet access described as "unlimited" when the companies concerned know full well that the product is not by any stretch of the imagination unlimited.

    Of course, its incompetents like the ASA and Ofcom that we really have to thank for that particular bit of nonsense, because either of them if they actually did their job could insist that the inappropriate misrepresentation be discontinued. But as the judge proves, "unlimited" is just the tip of the "deliberate misrepresentation" iceberg and there's a lot more than just that which needs to be forcefully stamped out.

    1. Rolf Howarth


      Unlimited just means no limit has been applied, it doesn't mean infinite. Think of a lorry with a 60mph speed limiter fitted. Removing that limiter so it's "unlimited" doesn't mean it's suddenly going to travel at the speed of light!

      It's perfectly reasonable to sell different versions of the same software, perhaps that supports 5, 10 or an "unlimited" number of users. That doesn't mean you can put 100 million billion users on it and expect it to run as fast as when there only one or two though.

  9. Anonymous Coward

    Caveat emptor

    Why the hell didn't the hotel trial the software, pilot it and then review it properly?

    Why is it the supplier's responsibility to know what the buyer wants and needs?

    That hotel is one customer I would not want -- too much troubl, they don't know what they want or need, and then when it all falls apart it's *your* fault not theirs.

    1. Paul Crawford Silver badge

      @Caveat emptor

      You seem to ASSUME that a trial was possible, but probably not. In fact, the simple way out of this is to always allow a free X days trial before you buy, in that case there can be no complaints about functionality (unless its broken at the trial and a promised post-purchase fix never appears).

      It is high time that software suppliers were held to *some* degree of responsibility for what they produce, for years the MS model of "push out product with gee-whiz features, then sell an upgrade to maybe fix some of the crap in it" has been the industry norm.

    2. Mike Shepherd
      Thumb Down

      Tell it to the judge...

      ...since you seem to know so much more about this case than he does.

      If software suppliers (it sounds like you are one) made their products work instead of selling snake oil, they wouldn't end up descending the steps of the High Court with a big bill in their hand.

      1. Anonymous Coward

        Mike Shepherd

        If you can't articulate what your needs are, how is the software supposed to meet them?

        Epic fail.

    3. JohnG

      Suppliers' claims

      "Why is it the supplier's responsibility to know what the buyer wants and needs?"

      Probably because the supplier makes the following claim on their website:

      "Entirety Property Management System (PMS) has been designed to fulfil the requirements of any size of hotel organisation....."

      Do you think the sales patter was any less optimistic when they were looking for a sale?

      Sales and marketing weasels the world over are renowned for promising the earth and then disappearing once the purchase order has been received.

  10. John Smith 19 Gold badge
    Thumb Up

    Hotel "Can we look at the manuals"

    Supplier "No"

    Hotel "How can we *find* out if it will do the job we want it to"

    Supplier "You can ask us."

    Hotel "Will it do the job we want it to."

    Supplier "Absolutely"

    The judge understood this is exactly what happened. The supplier ( if they are *any* kind of expert in the hospitality industry, which has had IT systems installed for at *least* the last 40 years) either *knew* the software could not hack it (so they lied when they said it could) or were so clueless about their business they did not know either way (and guessed).

    Thumbs up. You've got to wonder how many other suppliers have pulled this routine in their T&C's. This stripping will continue until more customers take some *responsibility* for their purchasing decisions and give cowboy suppliers a kicking.

  11. Anonymous Coward

    affect on EULAs

    What effect is this going to have on EULAs in general ?

  12. Peter H. Coffin

    Re: affect on EULAs

    It'll have no particular effect on EULAs in general. The validity of the EULA concept isn't at issue. Essentially, the hotel was told that they were buying chocolate and that it was delicious. They were not allowed to read the ingredients ("Contents: rocks"), and told that they were not entitled to a refund when they opened the wrapper and discovered that they'd bought rocks.

  13. Fab

    @Caveat emptor

    No... you missed the point completely.

    The Hotel was advised by the vendor that it would meet their needs. The hotel may not have the expertise to evaluate the software and has to rely on the vendor to understand the hotels requirenments.

    Its a typical example of a vendor overselling or turning a blind eye to requirenments that they know they may not be able to meet.

    Good verdict and another good article by Out-LAW.

  14. Anonymous Coward
    Anonymous Coward

    I'm suprised...

    ...that such a judgement should be required.

    Shirley legal action should always be available as a way to solve disputes. Writing into your T&Cs "the customer isn't allowed to sue us" is to attempt to completely undermine the law.

  15. Pete 2 Silver badge

    It'll be interesting to see if this applies to vacancies, too

    This is one area where, even with the best will int he world, it's impossible to try before you buy. or even to get a demo of what the job will entail before you start. If the vacancy starts rattling on about opportunities, or "a great company to work for" or makes any other claims - why can't they be held responsible as well? After all a new recruit has pretty much burned their boats by taking the new job, so if they can show that it's not all it was cracked up to be, they should be entitled to compo, too.

  16. Anonymous Coward
    Thumb Down

    Can of worms

    I'm not saying anyone should be able to get away with lying or making deliberately exaggerated claims but this could have a seriously detrimental effect on smaller software producers, pushing up costs and forcing lots of pointless effort to be put into disclaimers throughout the documentation or spent on liability insurance. The equivalent of warnings everywhere saying "warning - hot coffee might be hot" or "this bag of peanuts may contain nuts". The lawyers will be happy, but I'd rather whoever is supplying my software devotes their efforts into writing and maintaining the code.

    And what about freeware or shareware vendors? Every time you download and use a bit of software and it doesn't do what you hoped are you going to go and sue the author for £100,000 for wasting your time?

    This is only a good judgement if you suddenly want all your software to cost 3 to 5 times as much, and free offerings to all but disappear.

    1. James Hughes 1

      Just perhaps

      instead of spending all that money on liability insurance and disclaimers, it was spent on actually making the software fit for purpose, everyone would be happy?

      1. Anonymous Coward
        Anonymous Coward

        Re: Just perhaps

        Let's say you developed a cheap and cheerful software product that does 90% of what's required by most people and costs a tiny fraction of what a full solution from a big vendor would cost. You could:

        a) sell it as it is, warts and all, and users can accept there will be some limitations and issues (which you'll endeavour to fix, as they come up, thereby improving the product for the next version)

        b) spend the next year and a bit fixing or documenting every potential weakness you can think of, whether or not it actually makes a difference to users, thereby tripling the cost of the software and delaying when people can actually start using it

        c) worry so much about potential liability and being sued if it doesn't meet users' every requirement from the word go that you give up and do something else

        I don't see how b) or c) are in the interests of users, and they're certainly not in the interests of small developers who are trying to bring an innovative new product to market with limited resources.

        1. Displacement Activity
          Thumb Down

          Re: Re: Just perhaps...

          That's *exactly* what I do. It's (very) good software, even if I do say myself, and I let anyone have a free early version of the software. But, despite this, this judgement leaves me wondering to what extent I'm open to consequential damages claims. In this industry, that could easily run to millions.

          This judgement appears to put the onus on me to understand what each customer actually wants. To be frank, I don't care what the customer wants; anyone can have a 100-page manual and a free version, and I trust them to be grown-up enough to decide for themselves whether the software is fit for purpose, and to commit to an expenditure of a few hundred pounds on the basis of their own evaluation. But it's complicated software, I'm only human, and there must be bugs I haven't found. So, if at some point in the future someone uses it in a way that I hadn't quite envisaged, is some poxy lawyer going to come after me because I didn't fully evaluate the requirements of that particular customer before they parted with their £300?

          I don't know what happened in this particular case, but those of you backing this judgement should remember that the software industry isn't all about a bunch of shysters making false marketing claims and ripping off customers. That particular niche has already been taken up by lawyers.

    2. John Smith 19 Gold badge


      "And what about freeware or shareware vendors? Every time you download and use a bit of software and it doesn't do what you hoped are you going to go and sue the author for £100,000 for wasting your time?"

      Well I'll take a wild guess and say since you did not *pay* for it and have had a substantial amount of time to evaluate it (and the presumably readily available support docs as well) that is *your* problem.

      This case was about a company that did *not* allow the customer access to the information *necessary* to make an *informed* judgment but given a (probably *highly* choreographed) demonstration instead. Had the customer been given *all* the information I suspect their response would have been "This product sucks. Thanks but no thanks."

      Instead I suspect they put some substantial cash down before they found out they had a lemon on their hands.

      Or perhaps you already know this?

    3. Mike Shepherd

      No payment, no contract

      Under English law, a pure gift cannot be the basis of a contract.

      But your main mistake is that you're arguing for poor quality software, presumably described by some euphemism like "cheap and cheerful".

      Imagine substituting "software" with "car". You'd be saying "...this could have a seriously detrimental effect on smaller car producers, pushing up costs". I expect car makers to do safety tests and to make sure that the complex bits like brakes and airbags work reliably. I don't do exemptions for makers of "cheap and cheerful" death crates.

      In the same way, a company whose business depends critically on certain software expects that the supplier will take all reasonable care to make sure the software works, especially when that supplier crows at length about how superbly, superlatively and ineffably wonderful that software is.

      You can't say "caveat emptor" in the 21st century, because no-one can be an expert on everything (or even most) of the complex products now essential to the modern world. That's why we have contracts.

      1. This post has been deleted by its author

  17. mego

    Title? I don't need no reekin title!

    I can see the point from the Hotel's side, but I have to say - come on guys, surely you insisted on a trial before purchase? If you did and they promised the issues were fixed in purchase version, then it's slightly better, but only to raise you from a moron to a cretin.

    Putting ANY new software in any form of production use without running full test cycles on it in your environment, to ensure no compatibility/functionality problems is just plain irresponsible. I hear ya, there's too many lies from vendors that don't know their own product. Even more reason to be cautious when using something untested to RUN YOUR BUSINESS ON, don't you think?

    No, I am not a software vendor. I'm an IT professional. And this just stinks of bad IT management pointing fingers and lawyers at a problem that should have stopped at their desk. That IT department is the grenade and the pin's somewhere the sun don't shine..

  18. brycec

    Not Caveat Emptor - Moronus Emptor

    What kind of morons buy software that is apparently critical for their business without even trying it out or reading the manual?

    Presume they can't be bothered to read the contract either - they signed a contract which explicitly said the vendor liability was limited.

    If they had wanted more comeback in the event of a failing, they could have either negotiated the damages clause or chosen another vendor with more generous contractual liability terms.

    When the purchaser dipshit whines "but they said it would work" to his boss, his boss goes whining to the lawyers who ultimately produce an absurd and dangerous ruling which says its ok to not do any due diligence when purchasing a product.

    Hopefully the ruling was based on a technicality as it appears to be, and should not set a dangerous precedent.

    You sold me some reading glasses. They weren't right for me and I couldn't read my winning lottery ticket before the deadline. You owe me £1 million. It's your fault.

    Yeah right.

  19. Fab

    @Not Caveat Emptor - Moronus Emptor - brycec

    NO - you are assuming that software is simple shrinked wrapped product.

    Some products require configuration, setup and are sufficiently complex that product evaluation is either too difficult or in some instances completely impossible until the software is deployed.

    Every vendor knows that the customer has the right to return if the product isnt fit for function. In situation like this, the vendor needs to do his own due diligence to ensure that what they are delivering is suitable for a customers needs.

    I'm in the software industry and we have "products". That is is an equivelent to shrinked wrapped product with licensing governing the features enables. If a customer asks whether the product can do something but I know that the product cannot I will spell out the fact that it doesnt.

    Customers will often put trust in the vendors to be honest because the vendors have the expertise required. (are you a washing machines engineer? no? heck how can you buy a washing machine if you havnt evaluated it? )

    Its scumbags like that vendor that causes people to have scheptism about software and IT in general. So I've got EVERY reason to be watchful of this type of ruling but I think in this case it excelent!

    1. Anonymous Coward


      "Some products require configuration, setup and are sufficiently complex that product evaluation is either too difficult or in some instances completely impossible until the software is deployed."

      Oh my gawd, that couldn't be further from the truth. I've worked for the biggest of the big and the smallest of the small, and every client we ever sold to (and big means big) they always would start with an evaluation, proof of concept, pilot (this is where you can actually test it in a working environment without having to install and roll out fully), and then a planned rollout/deployment.

      If that hotel had an IT department that knew anything about rolling out software and systems, this problem *never* should have happened. You don't buy sight barely seen and roll it out into production without evaluation, proof of concept and pilot before deploying. That's bad business practice, and if that's how they do business,something tells me this hotel has more problems that the stupid IT decisions it makes.

  20. John Dougald McCallum


    "You sold me some reading glasses. They weren't right for me and I couldn't read my winning lottery ticket before the deadline. You owe me £1 million. It's your fault." In that case you should have gone to a REAL Optician and not the Pound Shop! A very silly comparison.

  21. John Smith 19 Gold badge


    It's the way the T&C's are written that puts *all* the responsibility on the customer to find out if it's suitable for them *coupled* with the companies *denying* them the information necessary to find that out.

    Yes, the customer *should* have trialled it with their existing system. Maybe the in house IT team knew this.

    *Maybe* their boss played golf with the company rep and he seemed "A good egg."

    *Maybe* the managers who are hotel management specialists smelt a rat but the IT types parroted the results of the demo ("Best thing since sliced bread..." .. Should have had it years ago" etc).

    The Judge reckoned they had pretty much set it up to sidestep *any* responsibility for delivering a defective product (which it was). That deliberate nature is probably what wound him up.

  22. nsld

    Sometimes the client screws the pooch as well

    It isnt always the snake oil sale thats the problem, often the client has a specification which then evolves into a meat pie with legs, the concept is great but the delivery is impossible.

    The general process starts with a requirements document, then the sale, then the config starts and you find that what was in the requirements docs is completely different to what they want.

    That said, we take a lot of business from competitors who do promise the meat pie with legs but end up delivering a vegetable somosa!

    Paris - her requirements are simple, but costly

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