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Software vendor liability is the issue of product liability for software bugs that cause harm, such as security bugs [1] or bugs causing medical errors. [2] For the most part, this liability does not exist in the United States.
The software vendor is usually not legally liable for the cost if a vulnerability is used in an attack, which creates an incentive to make cheaper but less secure software. [71] Some companies are covered by laws, such as PCI, HIPAA, and Sarbanes-Oxley, that place legal requirements on vulnerability management. [72]
This is in contrast to in-house software, which is developed by the organization that will use it, or custom software, which is designed or adapted for a single, specific third party. Although ISV-provided software is consumed by end users, it remains the property of the vendor. Software products developed by ISVs serve a wide variety of purposes.
Even if the user purchases a perpetual license, it is common for EULAs to allow unilateral termination by the vendor for any number of vague reasons or none at all. [34] [35] Furthermore, many EULAs allow the vendor to change the terms at any time and the customer must choose between agreeing or ceasing use of the product, without getting a refund.
Diagram of software under various licenses according to the FSF and their The Free Software Definition: on the left side "free software", on the right side "proprietary software". On both sides, and therefore mostly orthogonal, "free download" . A software license is a legal instrument governing the use or redistribution of software.
In the event of a third-party breach, multinational corporations such as Delta potentially face breach notification requirements in multiple states.
Strict liability thus requires manufacturers to evaluate the full costs of their products. In this way, strict liability provides a mechanism for ensuring that a product's absolute good outweighs its absolute harm. [68] Between two parties who are not negligent (manufacturer and consumer), one will necessarily shoulder the costs of product defects.
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