Software Contracts: Put It in Writing

This is from a contract between GE and software vendor General Magic Inc. (GMI), from earlier this year, which, experts say, represents some of the strongest language to date that software users have crafted to hold software vendors accountable for the quality of their code. It also creates clout-by-proxy: If General Magic has to make sure the code conforms for GE, it will conform for all users of the product.

7.3 Code Integrity Warranty. GMI warrants and represents that the GMI software, other than the key software, does not and will not contain any program routine, device, code or instructions (including any code or instructions provided by third parties) or other undisclosed feature, including, without limitation, a time bomb, virus, software lock, drop-dead device, malicious logic, worm, Trojan horse, bug, error, defect or trap door (including year 2000), that is capable of accessing, modifying, deleting, damaging, disabling, deactivating, interfering with or otherwise harming the GMI software, any computers, networks, data or other electronically stored information, or computer programs or systems (collectively, “disabling procedures”). Such representation and warranty applies regardless of whether such disabling procedures are authorized by GMI to be included in the GMI software. If GMI incorporates into the GMI software programs or routines supplied by other vendors, licensors or contractors (other than the key software), GMI shall obtain comparable warranties from such providers or GMI shall take appropriate action to ensure that such programs or routines are free of disabling procedures. Notwithstanding any other limitations in this agreement, GMI agrees to notify GE immediately upon discovery of any disabling procedures that are or may be included in the GMI software, and, if disabling procedures are discovered or reasonably suspected to be present in the GMI software, GMI, as its entire liability and GE’s sole and exclusive remedy for the breach of the warranty in this section 7.3, agrees to take action immediately, at its own expense, to identify and eradicate (or to equip GE to identify and eradicate) such disabling procedures and carry out any recovery necessary to remedy any impact of such disabling procedures.

Source: FreeEdgar.com/SEC