NEGOTIATE REMEDIES
Watch out for any vendor attempt to assert a self-help remedy that allows, for example, the vendor to shut off the system without notice to the customer. This can be done through use of dongles, disabling codes or other technical means and can wreak havoc on a business. The vendor can only legally pursue such a self-help remedy if it is clearly disclosed and agreed upon by both parties. In one well publicized case a software vendor disabled software used by the customer for inventory control after the customer had alleged problems with the system and withheld payments. As a result of the disabling code the customer was unable to process inventory or distribute its products. Millions of dollars were allegedly lost in missed orders and the defendant software vendor was found liable for damages. Customers and vendors should seriously consider whether or not the presence or use of disabling codes is appropriate and when, if ever, the activation of such codes is justified. As noted above it might be appropriate for the customer to include a warranty that there are no such disabling mechanisms in the software.
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