The Implied Warranty of Merchantability in Software Contracts: A Warranty No One Dares to Give and How to Change That, 16 J. Marshall J. Computer & Info. L. 393 (1998)

Authors

Robert W. Gomulkiewicz

Abstract

Software publishers disclaim the implied warranty of merchantability because the repercussions of recognizing such warranties are unknown. The purpose underlying implied warranties of merchantability is to ensure that the consumer is receiving a product that meets a minimal standard of consumer expectation; however, this threshold is difficult to measure when attempting to measure consumer expectation of computer software. The proposed U.C.C. Article 2B seeks to remedy this problem by removing some of the ambiguity. The implied warranty of merchantability had its genesis in the English commodities markets. As an action in tort, the implied warranty of merchantability protected a buyer from false representations made by the seller. By the 1800s, implied warranties of merchantability were used in contract situations where buyers could not refer to expressed warranties to demonstrate that the goods did not conform to what the parties had contracted. Eventually, the implied warranty of merchantability was interpreted so that sales contracts contained an implicit provision that goods sold under the contract were of the quality of other goods sold on the market and that the goods were reasonably fit for the use in which they were intended. Implied warranties of merchantability could be invoked when the buyer could not inspect goods before delivery and when the buyer was not protected by an express warranty. These principles were brought to the United States when they were codified in Article 2 of the U.C.C. To disclaim a warranty under U.C.C. Section 2-316, the disclaimer must 1) be conspicuous; 2) not conflict with express warranties; and 3) use prescribed language. Software publishers disclaim implied warranties of merchantability for a number of reasons. First, the doctrine of implied warranty of merchantability requires that goods must "pass without objection in the trade"; however, all programs are subject to criticism in the computer trade press. Second, the court would have to determine the standard to which the software would be compared. However, the dynamic nature of the software industry makes such a comparison difficult. Furthermore, such comparison would be difficult because computer software is generally perceived as a collection of unique ideas. To solve the problems of applying the doctrine of implied warranty of merchantability to computer software the following proposal should be adopted. Section 2B-403 Implied Warranty: Merchantability and Quality of a Computer Program (a) A merchant licensor of a computer program in a mass-market transaction warrants to the end user that the computer program is reasonably fit for the ordinary purposes for which it is distributed. (b) A merchant licensor of a computer program in a mass market transaction warrants to the retailer that: (1) the program is adequately packaged and labeled as the agreement or the circumstances may require; and (2) in the case of multiple copies, that the copies are within the variations permitted by the agreement, of even kind, quality, and quantity, within each unit and among all units involved. (c) A warranty under subsection (a) pertains to the functionality of a computer program, but it dies not pertain to the informational content in software or to the quality, aesthetic appeal, marketability, accuracy, or other characteristics of the informational content.

Recommended Citation

Robert W. Gomulkiewicz, The Implied Warranty of Merchantability in Software Contracts: A Warranty No One Dares to Give and How to Change That, 16 J. Marshall J. Computer & Info. L. 393 (1998)