READI

(Rights for Electronic Access to and Delivery of Information)

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WARRANTIES

Definition

This clause outlines the guarantees that the vendor offers the buyer with respect to the services or products to be delivered (see also Liabilities, Compliance, and Disputes). Like many other familiar contractual terms, it should be reviewed carefully to determine how the networked environment alters existing language, terminology, and interpretations.

Discussion

Our research revealed that there is a wide range of standard warranties in the industry. The most uncompromising examples specifically provide for no warranties whatsoever. The buyer secures the information from the vendor at its own risk.

Most agreements, however, provide for a host of warranties including:

• Assurances that the vendor has secured the rights to (or owns) the information and has the authority to sell (or license) it all (or in parts)

• A limitation on the amount of down-time

• Support requirements for documentation, training, technical support, customer service, etc. (see Technical Specifications)

• Billing in a timely fashion

• Speed of searches (time)

• Availability of backup copies in the event of failure of network or other means of delivery

• Assurances of information availability beyond the term of the contract (see also Definition of Product/Service, Termination)

Benefits

It is obviously quite beneficial to the buyer for warranties to be as numerous and specific as possible, especially since the lack of a warranty leaves the buyer without recourse if aspects of the contract are breached (or are not delivered as expected). The principal, and most important, warranty is that the vendor has the right to make the information offered available to the buyer.

Our research has shown that buyers respect sellers who offer warranties and that they, in turn provide sellers with a competitive advantage in the marketplace. Moreover, it became increasingly clear that the marketplace has responded to warranties and they have become an important feature for many electronic products and services.

For the seller, the exclusion of specific warranties provides the vendor with more latitude. Nonetheless, good business practices and quality service (including the inclusion of specific warranties for products or services rendered) may increase the likelihood of greater marketability and increase the acceptance of the product (or services) being offered.

Risks

From the point of view of the buyer, one of the principal risks is that the warranty offered by the vendor regarding its authority to sell (or license) the information may not be complete--owing to the nature of third party and intermediary channels of information delivery over networks, or because the vendor may not have secured all permissions from the original copyright sellers, or, for other reasons.

Warranties are often simply statements of good faith rather than enforceable by law, and consequently, the buyer's legal department should review the warranty clauses to determine their enforceability.

From the seller's point of view, caution should be exercised when identifying warranties in the event the vendor may not be able to reasonably deliver them.

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	Developed & Maintained by: webmgr@cni.org	© 2008 Coalition for Networked Information ALL RIGHTS RESERVED.
Any comments, or feedback?		Last Update:   Wednesday, 03 July, 2002 - 04:22 PM - EDT