Software Liability, Essay Example

In software development agreements whereby the programming may be on a clients mission critical list or the resulting software implementation has a high potential injury rate to the clients business; the programmer needs adequate legal protection.  Where clients receive considerable business disruption, potential damage to existing systems or experience significant downtime, directly as a result of erroneous programming, they may seek legal compensation.  This essentially will be looked at from the law of contract and the contractual agreement between the two parties. ”  These losses may be disproportionately high when contrasted to the fees that the Software Developer (Developer) may earn from doing the work.  For this reason Developers should try to limit or exclude liability for various sorts of losses that the Client could suffer. ” (Roston Carlyle Solicitors, 2010).

The legal perspective is that there should be adequate protection from both sides. From the Programmer viewpoint there is a need for limited liability and this needs to be clearly stated in the contract and Terms of Business. This is best achieved by clearly identifying the limits of liability accepted and placing a cap on the financial extent of potential damages claims. Software development professionals need to be very careful when looking at Professional Indemnity (PI) Insurance cover for protection. Many policies do not extend the coverage for acts of negligence. ” (consequential loss, negligence, wilful conduct, fraud, third party reliance, indirect losses, property damage (note that the scope of liability will, to a large extent depend on the sort of system that is developed) and may to a certain extent be controlled by the Developer.” (Roston Carlyle Solicitors, 2010).

Large Software development firms go a step further and introduce Non-Liability clauses directly into their agreements.  Such an example is that produced by Cisco Systems ” in no event will cisco or its suppliers be liable for any lost revenue, profit, or data, or for special, indirect, consequential, incidental, or punitive damages however caused and regardless of the theory of liability arising out of the use of or inability to use the software even if cisco or its suppliers have been advised of the possibility of such damages”  (Cisco Systems, 2009).

It is useful to note that many software development firms take months to years in the delivery of their products. During this time programmers may come and go; it is a very transient and fluid profession.  Equally parameters of the business may change during this period and these may not be taken into consideration in the software development, thus potentially leaving the Company or client vulnerable.  The key to this is in the testing phase before delivery of the product ” I agree that the company doing the development needs to take some responsibility, but the way this is ensured is through the testing phase implemented for the software before its release. This is the area that needs focus, with extra effort put in throughout the development of the software and not just near the end.” (Humphries, 2005).

An example where negligence caused loss of life is in the case of Leveson and Turner (1993) where a radiation machine was giving too high levels of treatment.  The error took weeks to discover and longer to resolve.  Faulty software is fairly commonplace but the programmers normally build in safety factors and redundancies to mitigate risks.  If you think of the millions of calculations that go into the software of the Space Shuttle software it would prove difficult to blame anyone for potential error but accidents do happen and in law this is mitigated by having robust legal contracts in place.

Works Cited

Cisco Systems. (2009). Cisco Systems. Retrieved 7 27, 2010, from Example License Agreement: http://www.cisco.com/public/sw-license-agreement.html

Humphries, M. (2005, 10 13). Programmer liability for software security holes . Retrieved 7 27, 2010, from http://www.geek.com/articles/news/programmer-liability-for-software-security-holes-20051013/

Roston Carlyle Solicitors. (2010). IT & Software Development. Retrieved 7 28, 2010, from Roston Carlyle Solicitors: http://www.rostroncarlyle.com/legalarticles/negotiating-liability-issues-in-software-development-agreements.html