What’s in YOUR Contract?

Apr. 22,2010

If there was ever an argument for negotiation of even the most banal of desktop software licenses (the highest price per desktop is $51.46), this breaking story about McAfee's latest virus definition file should have most procurement people running scared. Simply put, the definition file itself causes wide-spread shutdown of virtually every XP system it's installed on.

McAfee's Software Royalty-Free License (Jan 2010 edition) has two relevant sections [Note: This language is found in every publicly available McAfee agreement as of 4/22/10 at www.mcafee.com. Section numbers may be different.]:

"6. Warranty and Disclaimer. THE SOFTWARE IS PROVIDED "AS IS" WITH NO WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF NONINFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. You assume responsibility for selecting the Software to achieve your intended results, and for the installation of, use of, and results obtained from the Software. Without limiting the foregoing provisions, McAfee makes no warranty that the software will be error-free or free from interruptions or other failures or that the software will meet your requirements.

7. NO LIABILITY. UNDER NO CIRCUMSTANCES AND UNDER NO LEGAL THEORY, WHETHER IN TORT, CONTRACT, OR OTHERWISE, WILL MCAFEE OR ITS SUPPLIERS BE LIABLE TO YOU FOR ANY DAMAGES OF ANY KIND, WHETHER SUCH DAMAGES ARE CATEGORIZED AS DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS OR GOODWILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, OR FOR ANY OTHER DAMAGE OR LOSS."

Section 6 is pretty clear (and by law, has to be): there are no warranties. Using the software doesn't guaranty that you won't suffer from virus attacks. The software itself might not be error-free, either. Section 7 then puts a financial limit on damages just in case Section 6 wasn't clear enough: $0 for any damages of any kind.

Since it seems that the only way to fix each machine is to physically touch each machine , repairing this product is going to now require tens of thousands of man-hours, and McAfee isn't on the hook for any of the cost involved in repair.

To crib Capital One: "What's in Your Contract?"

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