Performance Warranties in Software and SaaS Agreements


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Instructor: Derek Schwede
Length: 30 minutes
CLE: None
Tools: Example Performance Warranties and Disclaimers; Tips and Tricks for Vendors; Presentation Slides
Roundtable: Yes
Created: 9/16

Using the UCC and consumer protection laws as background, we explain how performance warranties work at law and discuss best practices for implementing warranties in software and SaaS agreements. While we take the perspective of a technology vendor, we provide tips for customers as well.

Specific Topics:
  1. Background Law – We describe the awkward fit between UCC Article 2 and software and also highlight key Federal and California consumer protection laws.
  2. Best Practices for Warranties and Disclaimers – Using a hypothetical enterprise SaaS company called “ServiceHR”, we review the implied warranties and warranty remedies that may apply at law. We then describe a better approach for ServiceHR – creating an express, limited warranty with a defined, exclusive remedy for the customer. We also review warranty periods and drafting warranty disclaimers.
  3. Consumer Warranties – When ServiceHR wants to launch a new consumer product, we examine the Federal and California state consumer protection laws that may apply and review additional warranty disclaimers that ServiceHR should consider.
  4. Choose Your Own Disclaimer – We discuss the importance of vendors creating warranty disclaimers specific to their products, and show examples for ServiceHR and other products.
  5. Relationship with Service Level Agreements and Support – Software or SaaS performance issues can relate to support and SLA, in addition to warranty. We provide a framework for understanding how these provisions relate and for avoiding overlapping remedies.
  6. Tips and Tricks for Addressing Customer Concerns – We provide suggestions for how a vendor may respond to common customer requests for changes to the vendor’s warranty terms.