Software companies are being held accountable for problems in its software projects, misrepresenting what a software product does and being deceitful project timelines. A British judge also said the Red Sky software development company should have better understood the requirements of its customer. An earlier court ruling found that EDS misrepresented project timelines and was what its software product actually did. It sounds like the end of vaporware.
Red Sky sold hotel management software to London’s Kingsway Hall Hotel but the Hotel found problems with the software immediately. Kingsway Hall complained and called customer service and got customer no service instead. The software company knew of problems with its software and failed to disclose those problems because it wanted Kingsway to buy its software. It is simple as that. The question remains should a software company disclose known issues to its customers. It turns out British courts are saying yes. Red Sky should have told its customer of problems with the product when demonstrating it and chosen more demonstrations for it that more closely matched the customer’s own business requirements, the Court ruled.
Does any other industry believe or think they should not be held accountable for product flaws that may cause its customers harm or injury. Red Sky tried to rely on a clause in its standard terms and conditions which said that the only remedy available to customers if the software did not perform as advertised was to make use of its maintenance and support functions (a.k.a. call customer service).
Clause meant that Kingsway could not sue it for a refund on the software or for the additional costs it incurred as a result of its failings. The High Court disagreed and said that Red Sky’s clause was unfair under the Unfair Contract Terms Act. It said that this Act applied and protected Kingsway because negotiations between the companies had been one-sided on the issue of liability. His Honor Judge Toulmin also said that the software was not up to the tasks that Kingsway needed to use it for, and which Red Sky should have known were part of Kingsway’s needs when buying the product.
This decision is on the heels of an earlier decision. The High Court ruled that EDS had lied about its software when selling it to BSkyB and awarded interim damages of £270m (about $400 millions) against the software supplier – ouch! The court also agreed that EDS had been deceitful in pursuing the contract, finding that the information technology company had deliberately misrepresented how long it would take to complete the job. BSkyB Wins Legal Victory Against EDS –
http://online.wsj.com/article/SB10001424052748703906204575027303086931726.htmlHigh Court rules software liability clause not ‘reasonable’ http://www.channelregister.co.uk/2010/05/12/red_sky_liability_ruling/