Software licensors should consider disclaiming the ALI Principles of software contract law

I’ve added an optional governing-law clause to the general-provisions section of the clause library. The new clause disclaims applicability of the American Law Institute’s Principles of the Law of Software Contracts.

The ALI is basically a bunch of law professors. Its new Principles document doesn’t (yet) have the force of law, because they haven’t been adopted by any state and no court has followed them.

Many software vendors regard the Principles as quite problematic. For example, the Principles proclaim, out of thin air, a non-disclaimable warranty of no known material hidden defects. Many vendors would regard this as ludicrous: in most cases, the cost of testing software, and of documenting the test results, to achieve that standard would make it inordinately expensive.

Further reading (all most recently accessed June 21, 2009 except as indicated):

• Mark F. Radcliffe, New and Flawed Rules: Dealing with the ALI Principles of Law of Software Contracts – contains a checklist of steps software vendors could take to conform their license agreements to the Principles [ADDED 6/24/09]
• Dean Raymond T. Nimmer, Flawed ALI Software Contract Principles
• Sean Hogle, ALI’s Principles: My Recommendation for Software Vendors
• Jeffrey Gordon, ALI Approves the Principles of the Law of Software Contracts
• Kristie Prinz, Series on ALI Software Contract Principles [ADDED 6/23/09]