Abstract
Warranty disclaimers, caps on damages, predispute mandatory arbitration, and anti-class action waivers constitute what I call, “no responsibility” or “rights foreclosure clauses” in computer contracts. This is the first empirical study of how the information industries, which include the 100 largest software companies and the 100 largest digital companies, deploy one-sided warranty disclaimers, caps on damages, and predispute mandatory arbitration clauses coupled with class action waivers to shift responsibility for defective software to the user communities. This gives the information industries carte blanche to release dangerously defective software without consequences. In their standard form contracts, the industries do whatever they wish by incorporating their designed terms and conditions. The software industry assert contractual rights without providing corresponding meaningful remedies for breach in their computer contracts. The net effect of these no responsibility clauses is to require users to waive their right to a judicial forum in favor of arbitration, where the stronger party is at a distinct advantage. Congress needs to enact a federal U.C.C. Article 2 reform that will invalidate no responsibility clauses, thus restoring mutuality in software license agreements.
Recommended Citation
Michael L. Rustad,
Cancel Carte Blanche for the Information Industries: Federalizing U.C.C. Article 2.,
89 Mo. L. Rev.
(2024)
Available at: https://scholarship.law.missouri.edu/mlr/vol89/iss1/6