26-05-2014, 11:25 AM
Analysis of the case dealing with the lawsuit concerning Teknique Software Limited and Anand Retail Systems
Analysis of the case .docx (Size: 13.92 KB / Downloads: 12)
Facts of the case:
1. Teknique Software Limited (TSL) designs and sells software and Anand Retail Systems (ARS) is a value-added retailer that, among other things, configures, markets, and services multi-user computer systems.
2. Sometime in 1989, ARS’ system manager, Allen Rude, on seeing a magazine advertisement for an updated version of PC-MOS( an operating system for multi user systems), which he had decided against buying a couple of years back due to performance related reasons, contacted TSL to obtain information about PC-MOS and subsequently purchased a copy.
3. After evaluating the system for about two hours, Rude decided to keep the system.
4. ARS purchased many copies of PC-MOS from TSL over the next year, and the communications where through telephone conversations. The license agreement, however, appeared on the face of the packaging of each set of software sent by TSL to ARS.
5. ARS proceeded to install the software on a number of its clients’ systems, but the clients began experiencing problems.
6. After several months of trying to repair the damage done by PC-MOS, ARS gave up and sued TSL.
Analysis of the case:
The analysis of this case can be split into three parts based on the relationship between the following three pairs.
i. TSL and ARS
ii. ARS and its clients
iii. The clients of ARS and TSL
TSL and ARS:
There are two types of relationships that ARS and TSL could have shared, depending on which this case can be analysed. They are
i. ARS as the client of TSL
ii. ARS as a retailer of TSL
ARS as a client of TSL:
If ARS is assumed to be in the position of a client of TSL, then TSL, being the manufacturer of the product is liable to account for damages/losses incurred by ARS due to the malfunctioning software.
ARS as a retailer of TSL:
If ARS is in the position of a retailer of TSL’s software, then the contract exists between ARS’ clients and TSL, being the manufacturer of the software is accountable to the clients for the performance of its product.
ARS and its clients:
Again there are two possibilities based on which this can be analysed. They are
i. ARS as a client of TSL
ii. ARS as a retailer of TSL
ARS as a client of TSL:
If ARS was a client of TSL, then the contract/agreement(in this case, sale) between ARS and its clients becomes invalid as clients of a particular company are not allowed to contract for slae of the company’s product with each other.
ARS as a retailer of TSL:
If ARS acts as a retailer of TSL’s products, TSL is bound by legal procedures to take upon itself the liabilities incurred by ARS’ clients due to the use of TSL’s software.
Clients and TSL:
Here, there is only one possible relationship that could exist between the clients of ARS and TSL where ARS’ clients are the end users of the software produced by TSL. Since the clients of ARS are the end users of TSL’s product, TSL is liable to compensate for damages/losses incurred by the end users from use of the poorly performing software.
Conclusion:
From the facts of the case, it can be inferred that though ARS purchased the software copies from TSL, it was only acting as a retailer and installing them to their clients’ machines and hence, TSL is liable to compensate for damages/losses incurred by the end users from use of the poorly performing software.
Also, the shrink wrap agreement on the packages of each copy are not valid as the original contract between TSL and ARS was formed when ARS ordered copies of the software over the telephone and TSL agreed to ship them.