The increasing threat of legal liability for software developers

Abstract

This paper discusses the increasing threat of legal liability for developers should software malfunction and cause financial loss or harm to the user. Recent events in the software industry have signaled a changing environment for development organizations. A discussion of the mounting market expectations for software to function properly is presented to underscore the increasing potential for users to seek legal recourse. Various theories in the U.S. legal system may form the basis for legal action on the part of the user, based upon the characteristics of the individual case. The focus of this discussion is on software which is developed for sale, as opposed to in-house development, since most legal actions would arise between a vendor and purchaser. Although we conclude that the legal liability of the software developer is currently unclear and varies by jurisdiction, the threat is nonetheless present and may indeed be on the rise.