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Software Bugs and No Fixes?
Why Warranties Are Important in Software Contracts

A few weeks ago, I got one of those calls. You know the kind. The kind where you can practically hear the panic in the other person’s voice.
A client had just launched a custom software product. They’d invested time, money, and a whole lot of faith into it.
This was supposed to be the product that took their business to the next level. But instead of fireworks and celebrations, they got bugs.
They have security holes big enough to drive a truck through. It was a disaster.
Naturally, they turned to their development partner for help. After all, that’s what you do when things go south, right?
But here’s the shocker - there was nothing in the contract that guaranteed those issues would be fixed. Not a single word.
That’s when they realized they had made a big mistake.
When the client came to me, they were determined not to make the same mistake twice.
They needed a new development partner, but this time, they wanted to be fully protected. So, we got to work on their contract.
We realized there were a couple of challenges we needed to take care of first.
(1) The client had lost all confidence in their software.
Without warranties, they had no safety net. No assurance that these problems will be addressed.
They were left hanging, with a product that didn’t perform and no guarantees for a fix.
(2) Security risks were another issue they had to deal with.
With no warranties in place, the client had no guarantee that the software was free from undocumented third-party code or backdoor access.
Their data was at risk, and so was their business. One security breach, and they could be facing serious legal challenges.
(3) Compliance with data protection laws was another big worry.
After the mess they found themselves in, the client was anxious, rightfully so, about whether their software met legal standards.
The absence of warranties left them vulnerable to regulatory penalties, and they couldn’t afford another misstep.
That's when we realized there was a lot of work to be done. We had to take their previous experience into consideration.
But that’s not all. We also had to think about potential risks with the new agency.
The fix we worked on focused on 3 aspects.
(1) Performance Warranties:
We made sure the new contract included clear, unambiguous warranties guaranteeing that the software would perform as expected.
We didn't want there to be more guesswork or more "hoping for the best."
These warranties covered everything from basic functionality to handling specific tasks without failure.
The client could now move forward with confidence, knowing that if something went wrong, the development partner was on the hook to fix it.
(2) Security Warranties:
Next, we tackled the security risks. We included warranties that the software would be free from undocumented third-party code and backdoor access.
This was non-negotiable. Transparency was important. No more hidden surprises, no more legal complications.
For this, we also added a clause requiring the development partner to disclose any third-party components used in the software, along with their licensing terms.
(3) Legal Compliance Warranties:
Finally, we addressed the client’s legal concerns. We included warranties ensuring that the development partner would comply with all relevant data protection laws and regulations.
This wasn’t just about avoiding penalties. It was also about peace of mind. We also added provisions for regular updates and patches to keep the software compliant with any new legal requirements.
The client could rest easy, knowing their software was both secure and legally sound.
By tackling these challenges head-on, we drafted a contract that offered full protection. Overall, 4 things were achieved:
-> The client regained trust in their software, knowing that any bugs or issues would be promptly addressed by the development partner.
-> The software was guaranteed to be free from undocumented third-party code and backdoor access, significantly reducing security risks.
-> The contract ensured the software complied with all relevant data protection laws, minimizing the risk of regulatory penalties.
-> The development partner was contractually obligated to fix any issues, giving the client peace of mind and a clear path forward.
The end result? A smoother development process, a higher-quality product, and a client who felt secure in their business decisions.
When it comes to software development, never ignore or overlook the importance of warranties in your contracts.
Because they are quite literally your safety net. They make sure that your software performs as promised.
That it remains secure and meets all legal standards. Without them, you’re just trusting the word of the other side.
The next step? Take a close look at the contracts you have in place with your development partners.
Do they include the necessary warranties to protect your software and your business?
If not, it’s time to renegotiate or update those contracts to make sure you’re fully covered.
If you need my help with it, just reply "UPDATE" and let's get you sorted.
Talk to you soon.
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