Software Agreements Line by Line. How to Understand & Change Software Licenses & Contracts to Fit Your Needs

4. Checklist of Key Issues

The following is a checklist of the key issues presented in this chapter:

• Negotiate basic warranty protections: (1) performance; (2) services; (3) compliance with applicable law; (4) intellectual property infringement; (5) freedom from viruses; (6) no disabling mechanisms; (7) third party software; (8) authority; and (9) no pending or threatened litigation.

• Review warranties to ensure they cover all software and services to be provided by the licensor.

• Beware of general warranty disclaimers that may conflict with express warranties.

• Require the vendor to "pass through" all relevant third party warranties.

• Avoid exclusive remedies for breach of warranty.

• Always require a vendor intellectual property infringement indemnity and an associated remedy provision.

• Consider additional vendor indemnities where appropriate (e.g., property damages and personal injury).

• Limit licensee indemnities to claims for which the licensee is at fault.

• Make the limitation of liability apply to both parties.

• Increase the overall liability cap to a multiple of all fees paid.

• Carve out appropriate exceptions to the limitation of liability (e.g., breach of confidentiality, insured claims, indemnity obligations). Make sure the exceptions to the limitation of liability are carved out of both the exclusion of consequential damages and the overall liability cap.