Microsoft, Linux Foundation Both Oppose Software Defect Warranties

May 20, 2009

It doesn’t happen often, but Microsoft and the Linux Foundation have issued a joint letter voicing their displeasure over the American Law Institute (ALI)’s latest effort to create an implied warranty stating that all shipped software have no material hidden defects.

The ALI is largely made up of judges and attorneys who are assigned the task of dealing with protocols related to software sales and warranties.  Due to serious flaws and other issues, more consumers are interested in having politicians and others deal with defective software, as it can be sometimes difficult to get the companies behind the software to take responsibility.

"Parties should be able to choose the rules that best suit their needs, as they have the most knowledge about their particular transaction," according to the joint letter.  "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."

Both the Linux Foundation and Microsoft especially don’t like the following statement written into the ALI’s Principles of the Law of Software Contracts:  "A transferor that receives money or a right to payment of a monetary obligation in exchange for the software warrants to any party in the normal chain of distribution that the software contains no material hidden defects of which the transferor was aware at the time of the transfer.  This warranty may not be excluded."

Specifically, Microsoft and Linux Foundation officials want the ALI to clarify that statement, as they believe it’s a bit too vague, while also wanting their attorneys to read over the published principles.

The ALI is meeting this week, and a final vote by all participating members will take place on the proposed draft.  For clarification, the ALI is not a legislative body that can create laws, though the group’s writings are popular reference points for attorneys and judges.

The fallout is far from over, and it should be interesting to hear future statements regarding the implied warranty from both sides in the future.  For example, Microsoft and the Linux Foundation will likely square off with the European Union, as EU legislators recently created a proposal aimed at better protecting consumers.

Microsoft and the open source community have butted heads numerous times in the past, so the realization that there is an issue serious enough to have them combine forces is impressive, IT analysts said.  

"The mere fact that the Linux Foundation and Microsoft are joining forces may be viewed by some as remarkable," according to Microsoft general counsel Horacio Gutierrez.  "But there is a wide range of issues that affect all software developers alike."

This post has been written by Michael Barkoviak on May 19, 2009 3:02 PM couresy of


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