ALI's Proposed Principles of the Law of Software Contracts Approved for Final Release

In a previous blog posting, I discussed the new ALI Principles of the Law of Software Contracts. On May 19, 2009, the ALI membership, at its annual meeting, gave final approval to these principles. A number of provisions will prove controversial among software companies, particularly the new non-waivable implied warranty of no hidden material defects.

This implied warranty drew rebuke from a pair of unlikely allies: Microsoft and the Linux Foundation. In a joint May 14, 2009 letter to the academic representatives of the ALI responsible for the principles, Microsoft and the Linux Foundation requested that the ALI delay adoption of the principles pending further discussion and input from commercial software distributors and developers.

This [implied] warranty [of no hidden material defects] does not reflect existing commercial law: no similar warranty appears in the Uniform Commercial Code, and no explanation is given … for treating software contracts differently …. [T]he inability to disclaim the warranty does not reflect existing law or public policy: the UCC permits disclaimer of all implied warranties ….

Apparently the ALI stewards of the principles were unmoved by the entreaties of these two powerful representatives of both sides of the software industry spectrum.

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