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Purchasing Enterprise Software - Caveat Emptor Richard Zaitlen

Purchasing Enterprise Software - Caveat Emptor

Richard Zaitlen

Published December 27th 2012
ISBN :
Kindle Edition
10 pages
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 About the Book 

Authored by Richard Zaitlen, Partner at Pillsbury Winthrop Shaw Pittman LLPThe chapter will focus on negotiating end-user license agreements (“EULAs”) from the prospective of the software purchaser to ensure an adequate remedy should the software notMoreAuthored by Richard Zaitlen, Partner at Pillsbury Winthrop Shaw Pittman LLPThe chapter will focus on negotiating end-user license agreements (“EULAs”) from the prospective of the software purchaser to ensure an adequate remedy should the software not function as the parties intended, and for defending claims due to the purchaser’s often innocent misuse of the software.Executive SummaryThis chapter provides solutions to common issues faced by purchasers of enterprise software (i.e. software created and sold to businesses and organizations) in just about any industry, including the medical device, health care, high tech, insurance, mining, accounting and marketing industries, just to name a few. The issues are presented in the context of two frequently encountered scenarios: one in which the purchaser of software receives a product that is defective or does not function as expected when installed in the purchaser’s system, and another in which employees of the purchasing company take actions that result in exposure to liability for the purchasing company.With respect to the first scenario, this chapter provides guidance for software purchasers on how to negotiate the best terms for an agreement with a software supplier up front, and offers important advice on how to deal with a supplier of defective software to obtain the best possible outcome, whether that include additional support from the supplier, a refund of the software, or damages based on the costs associated with the installation of the defective software.Other issues arise where employees over-install the purchased software, or otherwise use the software in a manner not consistent with the terms of the EULA. This chapter addresses the steps purchasers can take to minimize and eliminate liability associated with such actions by negotiating for the inclusion of favorable terms in the EULA, and increasing communication between different departments within the purchasing party’s organization, among other approaches.The guidance provided in this chapter is relevant for any and all purchasers of enterprise software, and can literally save companies millions of dollars in costs associated with the purchase and installation of faulty software, and liability due to often innocent, but inappropriate use of the software.I analyze terms of a EULA with an eye towards potential litigation. I encourage companies to understand all terms of a EULA and negotiate those that are not in the purchaser’s/licensee’s favor. I further encourage companies to implement a protocol which ensures that the company’s IT departments understand the terms of the EULA with respect to upgrades, patches, etc., such that exposure to copyright infringement and other liability is avoided.