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CAST 2009: Understanding the Principles of the Law of Software Contracts

“The American Law Institute just adopted the Principles of the Law of Software Contracts. For now, this will guide judges when they decide disputes involving the marketing, sale (of product or product license), quality, support and maintenance of software. Over the next few years, it will probably guide some new legislation as individual states apply its terms. It will probably also inform some legislative drafting efforts underway in Europe, and probably to come in other countries whose economies are gaining greater influence (e.g. India and China).”

That introduction comes from Cem Kaner as he summarized his upcoming talk at this year’s Conference for the Association for Software Testing (CAST). CAST takes place in a couple of weeks July 13-16th in Colorado Springs, and Dr, Kaner will be looking to dig into some of the new rules for software contracts adopted by the American Law Institute in more detail.

“Historically, the American Law Institute has had enormous influence. Its membership is politically diverse and primarily judges and tenured law professors. Appellate-level judges routinely reference American Law Institute materials in their published cases. For software, judges need to turn to other judges’ writing even more than in other areas, because so much software law is judge-made. […] The Principles provide a unifying framework, based on judicial opinions around the country over the past 50 years. I was ill and unable to travel to the ALI meeting this year, but the ALI meeting blog reported that the Principles were passed unanimously. This is very rare, and it speaks well to the likely future influence of the document.”

Cem Kaner has pursued a multidisciplinary career centered on the theme of the satisfaction and safety of software customers and software-related workers. With a law degree (practice focused on the law of software quality), a doctorate in Experimental Psychology, and 17 years in the Silicon Valley software industry, Dr. Kaner joined Florida Institute of Technology as Professor of Software Engineering in 2000. Dr. Kaner is senior author of three books: “Testing Computer Software,” “Bad Software,” and “Lessons Learned in Software Testing.”

While this might seem like an unlikely talk to some, the subject matter is critical to our industry and CAST is a perfect venue to get people talking about it. There’s a mix at CAST that is rare at other conferences. Not only do the talks go deep into the subjects they cover, the average attendee is willing to dig in and do the work necessary to understand the subject matter. Add to that the importance of the Principles of the Law of Software Contracts to the industry and you have the perfect mix.

“At most conferences, I would give a talk about the Principles, a few people would ask short questions, we would call a time limit, and that would be that. Those are “marketing talks” – one-way communication from someone pushing an idea to an audience that politely listens. I strongly prefer CAST’s approach, which encourages more critical questioning and follow-up discussions. Sometimes people come prepared for a serious debate. CAST encourages this, and everyone learns from it. More often, a group of us break away for more discussion at the end of the meeting. Again, I learn a lot from that, and so do the people in the breakout group, who get to discuss the ideas in a way that makes sense to them.

Many testers talk about their unhappiness with their company’s quality standards. They feel as though they are working on bad software, with irresponsible project managers who care a lot about cost, ship date, and personal glory but don’t care whether the final result works. Commercial law creates the playing field for software development and marketing. When you ask why a company can survive when it sells crap software, lies about what it is selling, and treats its customers like dirt, you are partially asking a market question (how can it keep customers?) and partially a legal question.

Given that we have hit a milestone in the adoption of the Principles of the Law of Software Contracts, I think it’s important to let testers know the new rules.”

Dr. Kaner is no stranger to some of the issues that will surround the Principles of the Law of Software Contracts. He started working on software-quality-related legislation in 1995, when he helped write the Uniform Electronic Transactions Act (UETA). UETA (adopted federally as ESIGN) removed a major barrier to electronic commerce by giving legal force to electronic signatures. Dr. Kaner also worked on the Uniform Computer Information Transactions Act (UCITA), trying to improve it when it was a joint project of the American Law Institute, the National Conference of Commissioners of Uniform State Laws, and the American Bar Association. From 1995-2001, he wrote almost 100 status reports on UCC2B /UCITA, most for the testing community.

“UCITA started as UCC-Article 2B, a joint project of the American Law Institute and the National Conference of Commissioners of Uniform State Laws and the American Bar Association to update the Uniform Commercial Code, which is America’s main body of commercial law. The American Law Institute and the National Conference of Commissioners of Uniform State Laws jointly run the UCC’s Permanent Editorial Board, which has such a strong reputation for fairness and thoroughness (amendments take up to 10 years of hearings) that state legislatures look to the Board for all amendments to the UCC.

Unfortunately, the Article 2B project was hijacked by political activists who wrote a bill that radically tilted copyright and contract law in favor of large software vendors. The American Law Institute demanded a rebalancing of the bill. When the National Conference of Commissioners of Uniform State Laws refused, the American Law Institute walked off the project, killing it as a UCC project. The National Conference of Commissioners of Uniform State Laws renamed the bill, UCITA, and submitted it to state legislatures. Ultimately, two states adopted UCITA, the rest rejected it, and four states even adopted laws that made UCITA-based contracts unenforceable in their states.

This was the first time since the American Civil War that some states passed laws to explicitly reject and make unenforceable contract terms that were lawful in the state in which the contract was written. Once UCITA’s failure was clear, the American Law Institute started a new project (the Principles), to bring computer law in line with the mainstream of American commercial and intellectual property law, balancing the rights of vendors and customers. They elected me as a member, which put me into a better position to comment on laws affecting the software industry. I think I am the least experienced lawyer ever elected to the American Law Institute. Since then, I’ve given a few reports to AST members at CAST and by email, collecting feedback and making suggestions back to the American Law Institute.

Revamping the legal infrastructure is not a guarantee of better times to come. A poorly balanced body of law can wipe out a marketplace or wipe out the companies trying to serve that market. I think this decade’s lethargic software market has been a result of that. I’ve seen a lot of extreme proposals coming from many quarters (right, left, and unclassifiable). The American Law Institute work is the best and most promising that I have seen.”

At CAST, debate on topics presented is encouraged. Given the effect of the Principles on the software development industry, I asked Dr. Kaner what he thought the most likely criticisms might be.

“I think the most likely criticism will be holding software companies accountable for undisclosed known defects will somehow harm the industry. Sadly, I think this is poorly informed. A bunch of silliness was promoted on the web just before the American Law Institute meeting that claimed this would particularly hurt the open source community. As is so common in this decade’s political propaganda, this was blatantly wrong. The Principles specifically exclude open source software from this type of liability. I think more generally that some people fear that commercial regulation creates a potential to kill the industry. I have seen some proposals, especially from consumer activists and buyers for very large non-software companies, that demand too much. I think the Principles are much more moderate – perhaps too moderate.

The only way to address these types of concerns is with open discussion and facts. I’ll introduce some of the key ideas in my talk and then be available for as much post-talk discussion as people want. I don’t expect everyone to come out loving the Principles, but at least the folks who want a deeper understanding will have a good chance of getting it.”

For more on the upcoming show, check out the CAST conference website. For more on Cem Kaner, you can check out his website, or take a look at what he considers to be his career-best writing and research in his freely available book, “Bad Software.” The Principles are not available in a free copy on the web. However, you can get to a copy for sale from the American Law Institute. Dr. Kaner has summaries of some of the main ideas in the Principles on his blog and in his 2007 CAST presentation “Law of Software Contracting: New Rules Coming.”

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