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Posts Tagged ‘Software’

A clause has been ruled by High Court to effect, in a contract of software that no action can be taken by the customer against the software’s poor performance and as it was quite unfair therefore couldn’t be enforced.

The London’s Kingsway Hall Hotel bought software for hotel management from some software company named Red Sky. But there were so many problems in the software and in the end it wasn’t accepted as they rejected that software and also found some replacement. After that the proceedings were issued by the hotel against the software company for the loss in their business due to the bad performance of the software as compared to what was advertised. An attempt was made by Red Sky for relying on some clause in their terms-and-conditions according to which if some software could not perform as it was advertised then maintenance and the support functions provided by the company could be used by the customer. This was the only remedy that they had in their terms.

Due to this clause the company claimed that they can’t be sued by the hotel for any kind of refund or any of the other damages in terms of loss etc. But High Court did not agree to this point of view and it was determined that according to the Unfair Contract Terms the clause mentioned above was quite unfair. According to the software company exclusion of the liability was very much reasonable according to the Section 11 (1) of said Act. But the way in which the sale of the software was conducted caused the Court to Disagree as the hotel had not been provided with the complete documentation and therefore their decision of making a purchase was totally based on the software’s description provided by the Red Sky.

The point of view of the judge was that software that was provided could not performed the tasks for which it was bought and under “Sale of Goods Act 1070” it is necessary to imply those terms in contract that would be entirely fit to perform the tasks for which some one bought that.

£110,007.54 were awarded to the hotel for their profits that were lost, software’s price, goodwill’s loss and for the staffing that were needed additionally due to the problems that were caused by the software and for different other damages that the hotel had.