Technology &
Internet Law
Exclusion Clauses in Software Development Contracts
Pegler v. Wang
The case of Pegler v Wang (UK) is important
for anyone involved in websites which are more than mere brochure sites.
The case was of general application to the IT industry but
in the context of the internet it is as relevant where a development
agreement includes software, hardware and maintenance services.
In Pegler v Wang (UK) the contract had clauses purporting to exclude
Wang's liability in various situations. However, they did not deal with what
would happen if there was a total failure to supply the system. When Wang did
fail to do so, they were not then able to rely on the more general exclusion
clauses contained in the contract.
Scope and Application of Exclusion Clauses
Software developers should look carefully at their
contracts to make sure that the exclusion and limitation clauses deal with the
exclusion of pre-supply liability. They need to make sure that before they take
a job on, they are absolutely sure that they can deliver because there are
limitations on these clauses anyway - if they are not "reasonable",
they will be unenforceable under the Unfair Contract Terms Act 1977.
The case also looked at claims for direct losses resulting
from a breach of contract.
The case highlights the need to
consider the impact of a failure to deliver and of other losses under the
contract to make sure that the terms of the contract strike a fair balance. In the
event of a dispute, clients must keep as much evidence as possible of the
losses suffered including any actual expenses but also any resultant loss of
time, loss of business and damage to reputation. Ccomplaints
may be central evidence in such matters.
Commercial and practical limitations and advantages of patent protection...
NEED TO KNOW MORE?
For further information
on software development contracts and agreements, contact Maitland
Kalton or Julian Danobeitia
or call us on +44 (0)20 7278 1817
Kaltons Solicitors, Suite 302, Spitfire Studios, 63-71 Collier Street, London, N1 9BE. Telephone +44 (0)20 7278 1817; Fax: +44 (0)207 278 1835.
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