Linux Foundation joins Microsoft in opposing software defect warranties

If someone sells you a defective piece of software, what rights do you have? If the retailer doesn't offer a return policy, as you may very well know -- especially if you ever read the End-User License Agreement, wherever it might be located -- your ability to hold the manufacturer liable may be very limited, if not non-existent. Since the 1990s, Microsoft has been an active opponent of changes to laws and regulations that allow the sale of software to be treated as an exchange of services rather than a sale of goods -- changes that one software development lawyer in 1997 warned would "have a far more damaging effect on software publishing competition and on the quality of software products than anything being done solely by Microsoft today."

But now, Microsoft's principal competition in the operating system field has joined sides with it in opposing the latest efforts by a panel of prominent judges and attorneys to reform the protocols for developing software sales contracts and warranties. The Linux Foundation is now on record as opposing changes to warranties, and has co-authored a document with Microsoft to that effect, as Microsoft revealed last Sunday.

Recently, legal scholars, legal authorities, and even governments have lent their talents and resources to the task of strengthening consumers' rights of redress with regard to defective software. Worldwide, the category of software has historically been given specific exclusion from having to provide warranties of merchantability -- guarantees to the customer that it works as advertised, that it won't harm systems on which it's installed, and that it doesn't contain bugs.

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In the United States, the Uniform Commercial Code (UCC) governs the way commercial entities devise their warranties of merchantability. But software as a category has been excluded from falling under the purview of the UCC, on account of successful arguments over the years from Microsoft and many others that software is essentially a service, even though it sometimes comes shrink-wrapped. The American Law Institute is the panel currently responsible for revising and updating the UCC.

In a joint letter sent by attorneys for the Linux Foundation and Microsoft to the ALI last Thursday, the organizations argued that the current standard already gives the consumer plenty of rights with regard to defective software, and that the exemption granting software the status of a service should not be lifted for that reason.

"Parties should be able to choose the rules that best suit their needs, as they have the most knowledge about their particular transaction," the organizations argue. "That is not to say that certain protections -- for example, in the business-to-consumer context -- are not warranted. But even in today's common law approach to software contracts, there is no great failure in terms of substandard quality or unmet expectations that would justify imposition of new mandatory rules, particularly given existing remedies under misrepresentation and consumer protection law."

The organizations go on to state their opposition to the ALI's current re-drafting of the Principles of the Law of Software Contracts, "which establishes an implied warranty of no material hidden defects that is non-disclaimable." After years of enjoying the exclusion of software being treated as a service, Microsoft and the Linux Foundation now argue that leveraging the exclusion to treat software as worthy of specific guidelines, is unfair. "No similar warranty appears in the [UCC]," they continue, "and no explanation is given in the commentary for treating software contracts differently from sales of goods on this point."

Though year after year, action on redrafting the Principles has been delayed for further reflection (last year at this same time being no exception), the organizations called upon the ALI to delay the redraft again, this time to give "interested parties" an opportunity to comment.

Next: How Linux's new stance could impact legal efforts in Europe...

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