Understanding Open Source and Free Software Licensing

Warranties

Warranty disclaimers, while not a part of the open source definition and not necessary for a license to function as an open source license, are nonetheless very common in licenses.

To understand the effect of the warranty disclaimer, it helps to have some understanding of what the terms used in it are and what it means to have a warranty associated with or implied by the acquisition of a particular work. The most obvious form of warranty is an express warranty . If upon the sale of a particular item, the seller explicitly states to the buyer that the item being sold, say, an answering machine, will perform a particular function, say, automatically answer incoming calls, the warranty is part of the sale. In the event the product does not perform as stated, the buyer has a remedy against the seller, generally either to have the price of purchase returned or to receive an equivalent but functioning item in exchange for the defective one. Express warranties are very common in sales of consumer goods. My stereo speakers, for example, were warrantied against defects for 10 years from the date of sale.

A warranty of merchantability is not an express warranty, but rather a variety of implied warranty , a warranty created by the operation of law, not by the seller's decision to make a particular representation. This type of warranty is generally applicable only to merchants, persons who make a business in the sale of particular goods. This warranty operates as a general guarantee that goods sold by a merchant are suitable for use as generally intended. A purchaser who buys rope from a hardware store, even if there is no express warranty, is nonetheless guaranteed that the rope will function as rope generally does. By contrast, if you buy a car from your cousin, who is not a car dealer, you have no guarantee that the car will run in a particular way, or even that it will run at all.

A warranty of fitness for a particular purpose lies somewhere between a warranty of merchantability and an express warranty. Like a warranty of merchantability, it is implied by law, and not by express guarantee; but like an express warranty, it applies to a particular function. Its name describes its function. For example, if you buy rope in a hardware store, and prior to the purchase you say to the person selling the rope, "oh and by the way I am using this rope to pull the car I just bought from my cousin out of a ditch," and the person selling it says, "oh yeah, it's strong enough for that," a warranty of fitness for a particular purpose is implied. If the rope does not work, the buyer, again, has a remedy against the seller.

A warranty against infringement is a type of warranty unique to intellectual property. Such a warranty is a guarantee by the seller, say, a writer or a musician, that the work that she is selling is in fact a work that she has copyright to, generally because she is the creator of the work.

This is probably a good moment to address consequential damages . As described above, the remedies for a breach of one of the warranties just described include the familiar ones of the return of the price of purchase or the exchange of the defective item. However, under at least some circumstances, a seller of a defective product may be liable for more than just the sale price of the item. If the defect in the item causes damages of a type that were reasonably foreseeable at the time of the sale, the seller of the item could be liable for damages that flowed from the defect. These damages are often far greater than the sale price of the item and are known as consequential damages. Suppose, for example, the manufacturer of a brand of coffeemakers makes a particular model of coffeemaker that, contrary to its warranty, will start a fire if left on for more than four hours. If one of those coffeemakers starts a fire that burns down the house of the unfortunate purchaser of that coffeemaker, the manufacturer may be responsible not only for reimbursing the price of the coffeemaker, the so-called direct damages , but also for the value of the house and contents, the reasonably foreseeable consequential damages flowing from the defect.

Tip

As described in Chapter 7, warranty disclaimers can also produce business opportunities for developers willing to sign contracts to provide support for products that come without a warranty otherwise. However, these contracts are usually in addition to the open source license, not a part of it.

In light of the potential liability, disclaimers of warranties like that in the MIT License, described in Chapter 2, are commonly found in open source licenses. The use of such disclaimers is not necessarily foolproof, however. A contrary representation or agreement, particularly one made as part of a sale, may end up nullifying the disclaimer and result in liability attaching at least to the person making the relevant representation or entering into the particular agreement. In addition, state or federal law may limit the enforcement or the effectiveness of such disclaimers. Accordingly, licensors should consult with an experienced lawyer before relying on such disclaimers.