Computer Software Contracts: A Review of the Caselaw

The pervasiveness of computers in our society has led to numerous legal controversies involving computers and computer transactions. Conflicts between buyers and sellers of computer software have resulted in, and will continue to result in, both tort and breach of contract actions to redress disputes. This article focuses on those contract actions involving computer software. A fundamental issue in resolving a contract dispute involving a software transaction is whether article 2 of the Uniform Commercial Code (hereinafter UCC) or the common law governs.

It has been recognized that whether article 2 applies to computer software contracts is very significant especially in the areas of warranties, consequential damages, and limitations on liability. However, commentators have disagreed on the answer to this question. This article categorizes and examines the judicial decisions that have confronted this question. An analysis of these decisions demonstrates that although only a limited number of courts have faced this question the decisions are generally consistent and reconcilable when viewed in the context of commercial transactions generally.