15

Most open source software licenses contain, in capital letters, the following disclaimer:

THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. IN NO EVENT SHALL THE COPYRIGHT HOLDERS OR ANYONE DISTRIBUTING THE SOFTWARE BE LIABLE FOR ANY DAMAGES OR OTHER LIABILITY, WHETHER IN CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.

Does such a disclaimer carry any legal weight? That is, if my license doesn't contain such a clause, can I as a distributor of the software be held liable for damages, and if it does contain such a clause, does it effectively prevent me for being held liable?

10

Some jurisdictions provide for statutory warranties on fitness and merchantability of goods. The effect of these exclusion clauses will vary between jurisdictions, so I will briefly examine two different effects of law with respect to supply of goods.


For the United States, certain warranties are implied in the sale of a product, provided for in the Uniform Commercial Code § 2-314,

(1) Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchantwith respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.

(2) Goods to be merchantable must be at least such as

  • (a) pass without objection in the trade under the contract description; and
  • (b) in the case of fungible goods, are of fair average quality within the description; and
  • (c) are fit for the ordinary purposes for which such goods are used; and
  • (d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
  • (e) are adequately contained, packaged, and labeled as the agreement may require; and
  • (f) conform to the promise or affirmations of fact made on the container or label if any.

(3) Unless excluded or modified (Section 2-316) other implied warranties may arise from course of dealing or usage of trade.

The Uniform Commercial Code § 2-315 states that:

Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.

This means that the warranties in § 2-314 will generally apply to products that are sold, unless excluded as per § 2-316

UCC § 2-316

(2) Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous.

Licenses that specifically exclude implied warranty are sanctioned by the UCC, and therefore would be considered in the United States.

UCC §2-106 defines a sale as passing of title from the seller to the buyer for a price.

States may have additional laws that may affect the interpretation of the UCC. For example, Ark.Code Ann. § 4–1–201(32):

(29) "Purchase" means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property.

However, Neuhoff v. Marvin Lumber and Cedar Co., 370 F.3d 197 (1st Cir.2004) held that windows provided free of charge to replace defective windows did not come with implied warranty.


However, not all jurisdictions allow the exclusion of implied warranty. For instance, consider Australian Consumer Law. (Part 3-2, Division 1):

54 Guarantee as to acceptable quality

(1) If:
(a) a person supplies, in trade or commerce, goods to a consumer; and
(b) the supply does not occur by way of sale by auction;
there is a guarantee that the goods are of acceptable quality.
(2) Goods are of acceptable quality if they are as:
(a) fit for all the purposes for which goods of that kind are commonly supplied; and
(b) acceptable in appearance and finish; and
(c) free from defects; and
(d) safe; and
(e) durable;
as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).

64 Guarantees not to be excluded etc. by contract
(1) A term of a contract (including a term that is not set out in the contract but is incorporated in the contract by another term of the contract) is void to the extent that the term purports to exclude, restrict or modify, or has the effect of excluding, restricting or modifying:

(a) the application of all or any of the provisions of this Division; or
(b) the exercise of a right conferred by such a provision; or
(c) any liability of a person for a failure to comply with a guarantee that applies under this Division to a supply of goods or services.
(2) A term of a contract is not taken, for the purposes of this section, to exclude, restrict or modify the application of a provision of this Division unless the term does so expressly or is inconsistent with the provision.

67 Conflict of laws
If:
(a) the proper law of a contract for the supply of goods or services to a consumer would be the law of any part of Australia but for a term of the contract that provides otherwise; or
(b) a contract for the supply of goods or services to a consumer contains a term that purports to substitute, or has the effect of substituting, the following provisions for all or any of the provisions of this Division:
(i) the provisions of the law of a country other than Australia;
(ii) the provisions of the law of a State or a Territory;
the provisions of this Division apply in relation to the supply under the contract despite that term.

What the above sections mean : (54) there are implied statutory warranties (64) that cannot be excluded by contract, (67) and applies even if the proper law of a contract is not Australia.

It is important to note that these do not depend on the existence of a contract (see 54(1)); gifts are covered, though I am unaware of any case law on this. In addition, title (s51) and non-infringement ("undisturbed possession") (s52) must be guaranteed by the supplier and cannot be excluded.

In addition, the mere existence of this statement, purporting to limit or remove guarantees that cannot be limited or excluded, puts the supplier in breach of s29 as they are making a "false or misleading statement in connection with the supply, possible supply or promotion of goods or services". This is a criminal or civil offence and can be punished by fines of up to $1.1 million for a body corporate and $220,000 for a person other than a body corporate plus injunctions, damages, compensatory orders and other remedies. However, a simple "To the extent permitted by law ..." at the start would make this legal.


So, does it have an effect? Sometimes. But not always. And at least in the United States, there are specific requirements if you want to exclude implied/statutory warranty.

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  • 1
    Do I understand correctly that 2-314 and 2-315 don't count for software that is given away for free, and not sold, as is often (but not always!) the case? – Martijn Jul 28 '15 at 10:01
  • @Martijn I've added some information about gifts. – jimsug Jul 28 '15 at 11:00
  • @jimsug open source software is not really a gift IMHO as there is no active "giving" on the part of the author. The software is just made available for free under an open source license. – Philippe Ombredanne Sep 15 '16 at 13:27
  • @PhilippeOmbredanne ... that's fine, but I don't assert that in my answer. I added information in response to the above comments. – jimsug Sep 17 '16 at 7:18
  • 4
    @Rhymoid while that may be true in some cases, it is definitely not always the case. Courts will look at the "heart" or the nature of the agreement, and have variously found that software is and isn't a good - it really depends on the facts, so you can't make this claim without qualifying it. Two such examples: A good - not a good – jimsug Nov 5 '16 at 21:56

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