This page considers warranties for software, sites and
other digital content.
Are online warranties worth the electronic paper they
are written on?
A warranty is essentially a statement of commitment by
a manufacturer, distributor, service provider or agent
to address particular problems.
It is common for digital products (such as music CDs,
software CDs and DVDs) to feature warranties - often as
part of the shrinkwrap.
Warranties frequently feature in B2C and B2B sites regarding
sale or licencing of tangibles such as clothing or intangibles
such as services and software, with consumers for example
being expected to assent to conditions expressed in an
online warranty as part of an initial download of software
or installation of an online update.
They may feature in printed or online terms & condictions
used by internet service providers (ISPs)
and auction sites. They
may also appear on sites that do not impose a fee for
access, ie where there is no contractual relationship
between the publisher/rights owner and the visitor to
the particular site.
Warranties are thus encountered, directly or otherwise,
by most people who have installed software, used a music
CD or DVD, bought a product from an online retailer such
as Amazon.com, paid for an airline ticket online or indeed
bought products such as toasters, refrigerators and automobiles
from an offline retailer.
They are significant part of national and provincial consumer
protection regimes, with courts for example holding businesses
to commitments and refusing to accept particular exclusions.
However they are frequently misunderstood or abused, reflecting
factors such as misplaced consumer expectations,
the opacity of particular statements ("the fine print")
and community acceptance of exclusions that are so broad
as to render the warranty of no value for some consumers.
The following paragraphs discuss particular issues, with
an emphasis on software and services for Australian consumers.
Consumer expectations are important and are conditioned
by past experience. It is clear that Australians who grew
up during the 1960s and thus experienced one of the golden
ages of consumer protection have high expectations about
the 'fitness for purpose' or 'marketability' of products
such as toasters and woolly jumpers, whether purchased
online or at a brick & mortar venue. Those expectations
are broadly reflected in warranties and in Australian
Expectations about much digital content appear, however,
to be different. Lower expectations about performance
- or indeed non-performance - are implicit in many warranties
and in much law. That law essentially gives consumers
less protection for software than for a cheap toaster,
although the software may be expensive to purchase and
its use may result in significant economic damage or distress
to the consumer.
Australian consumers purchasing goods and services from
vendors within Australia are protected by the national
Trade Practices Act 1974 (TPA). Australian online
vendors must ensure that the terms and conditions of their
on-line agreements comply with this Act. Part V of the
TPA contains consumer protection provisions, including
the prohibition in s 52of misleading and deceptive conduct
in trade or commerce. A contract might also be illegal
and contravene restrictive trade practices provisions
where it is contrary to public policy (eg unreasonable
restraint of trade). Jurisdictions outside Australia generally
offer similar consumer protection, for example the New
Zealand Consumer Guarantees Act 1993.
As with statements regarding many products, software is
typically provided with a limited warranty, one for a
finite number of days (often 90 days after first sale
or first installation).
Given that most software is licensed rather than sold
outright, the warranty does not cover sale/lending to
It is often restricted to delivery of the content: scrutinise
the boilerplate associated with software disks, for example,
and you will usually find that the warranty relates to
defects in the disk rather than whether the software performs
Examples include wording such as -
media on which the ... software is recorded to be free
from defects in materials and workmanship under normal
use for a period of ninety days"
storage media in this product will be free from defect
in materials and workmanship for 90 days"
developer "makes no warranty or representation,
either express or implied, with respect to the software,
documentation, quality, performance, usability, condition,
compatibility, security, accuracy, merchantability,
or fitness for a particular purpose".
the disk is scratched or missing you can expect a refund;
that is not necessarily the case if the software on that
disk is buggy.
Few manufacturers and vendors offer meaningful undertakings
about the performance of their software; it is a commonplace
that major software developers use consumers as lab rats
to debug early editions of their code. Many businesses
warrant that their code will work "substantially"
as described (a description that on close analysis is
often quite vague) but seek to strongly exclude liability
in relation to use of the software. That has been defended,
with some plausibility, on the basis that IT systems are
qualitatively different to toasters and that in practice
it is difficult to determine what caused a particular
Typical language thus includes statements such as "in
no event" will the software developer or its agent
"be liable to you for any consequential, incidental
or special damages, including any lost profits or lost
savings" and that the developer
not warrant the functions contained in the software
will meet your requirements or that the operation of
the software will be uninterrupted or error free. The
entire risk as to the quality and performance of the
software is with you.
have commented that assertions that software is sold 'as
is', with the consumer accepting any defects and non-performance,
are problematical. Debora Halbert for example comments
that a claim
the quality and performance of a product is not the
responsibility of the manufacturer, would make little
sense in any other field. Can you imagine the same warranty
attached to a Firestone tire? Or a baby crib? However,
this software agreement, which must be accepted in order
to use the program, contracts away liability on the
part of the manufacturer for a defective product.
notes that a software licence is different to buying damaged
furniture 'as is', because the software vendor typically
is not selling used goods and has made "assertions
about how the product will work in the advertising associated
with the product and the packaging surrounding the product".
Warranties are typically written with litigation in mind,
ie they are written for courts rather than for ordinary
consumers. Subject to restrictions imposed by statute
or common law they are also typically written to protect
the manufacturer, service provider or vendor rather than
As a result they are frequently expressed in a legalese
('boilerplate') that non-specialists have difficulty understanding,
whether because the vocabulary is wholly unfamiliar or
because the meaning of particular terms is different to
that in ordinary use. Problems with comprehension may
be especially significant if the legalese derives from
another jurisdiction. Australians, for example, have encountered
difficulty in making sense of warranties written for Japan
or the US.
Comprehension may also be inhibited by the poor readability
of a warranty, by difficulties facing a consumer who cannot
find the warranty online or by impediments to making a
hardcopy of the warranty.
Discussion elsewhere on this site regarding readability,
online design, accessibility
and privacy statements
has highlighted questions about the presentation of print
and online legal statements from financial institutions,
government agencies, software developers, retailers and
other entities. It is common to encounter statements that
use a small font size, that only use upper case letters
with inadequate spacing between lines and paragraphs,
and that are presented in a 'keyhole' format that allows
the reader to view only a few lines at a time and does
not feature clear navigation points.
That experience is not restricted to online content: most
people have encountered multi-page warranties accompanying
Japanese or Chinese electronic products in "microscopic
print that only my 14 year old nephew can read".
The US Privacy Rights Clearinghouse offered a scathing
view of statements in its Lost in the Fine Print: Readability
of Financial Privacy Notices report,
endorsed by the Federal Trade Commission.
As yet there is no significant Australian and New Zealand
case law regarding the readability of online warranties.
For the US see Joseph Wang's 1997 'ProCD, Inc. v. Zeidenberg
and Article 2B: Finally, the Validation of Shrink-Wrap
Licenses' in 16 John Marshall Journal of Computer
& Information Law 439, Darren Baker's 1997 'ProCD
v. Zeidenberg: Commercial Reality, Flexibility in Contract
Formation, and Notions of Manifested Assent in the Arena
of Shrinkwrap Licenses' in 91 Northwestern University
Law Review 379, Lorin Brennan's 1999 'The Public
Policy of Information Licensing' in 36 Houston Law
Review 61, Robert Gomulkiewicz' 1997 'The Implied
Warranty of Merchantability in Software Contracts: A Warranty
No One Dares to Give and How to Change That' in 16 John
Marshall Journal of Computer and Information Law
393, Mark Lemley's 1999 'Beyond Preemption: The Law and
Policy of Intellectual Property Licensing' in 87 California
Law Review, Daniel Perlman's 1998 'Who Pays the Price
of Computer Software Failure?' in 24 Rutgers Computer
& Technology Law Journal 383 and the transcripts
of the Federal Trade Commission 2000 symposium on Warranty
Protection for High-Tech Products and Services.