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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.
Software as service (SaaS) vendors—who have the majority market share in application software as of 2023 [30] —rarely offer perpetual licenses. [31] SaaS licenses are usually temporary and charged on a pay-per-usage or subscription basis, [ 32 ] although other revenue models such as freemium are also used. [ 33 ]
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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.
Escrow is typically requested by a party licensing software (the licensee), to ensure maintenance of the software instead of abandonment or orphaning. The software's source code is released to the licensee if the licensor files for bankruptcy or otherwise fails to maintain and update the software as promised in the software license agreement.
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In some cases, vendors have asked that customers requesting refunds sign non-disclosure agreements. [36] [37] In 1999, a Toshiba representative stated that a case where a user obtained a $110 refund was "not the typical policy and not what other people will run into if they try it". [1] Other vendors do not issue refunds for Windows licenses.