Delivery, Installation
& Acceptance
copyright 1997 Donald M. Cameron , Aird & Berlis
Contents
Introduction
In the case of shrink-wrapped, commercial computer programs, the product is usually accepted once the software has been purchased, torn open by the licensee, delivered to the licensee's site by the licensee or installed by the licensee.
In the case of larger custom systems, the delivery and installation may be done by the licensor and the payment of consideration by the licensee delayed until the licensee is satisfied that the software is "up and running" and acceptable.
In more complicated large-scale custom systems, there may be a series of modules delivered, installed and accepted which trigger instalment payments of the consideration. The licensee uses the instalment payments to fund the development of the further modules.
Thus, the complexity of the deal often defines the complexity of the delivery, installation and acceptance clauses.
With respect to each of delivery, installation and acceptance, the questions Who?, What?, When? Where? and How? must be asked and answered.
Delivery
Who
Will the licensor or the licensee deliver the software to the installation site?
What
What form will the computer program take: disk, tape, downloaded data?
How many copies of the computer program will be provided?
Is the computer program according to conform to a functional or performance specification (the infamous "Schedule A")?
Is it to be in executable form or source code?
Are there any other deliverables such as manuals or empty data files?
When
Set out the dates for delivery.
If there is more than one module to the program, set out the delivery schedule for each.
If the delivery is delayed, are there any financial or other penalties to be applied to the licensor?
Where
Is the computer program to be delivered to the site of the proposed permitted use, or elsewhere?
Installation
How
Who is responsible for the installation of the computer program?
With respect to the installation of the software, someone will have to create an environment for the computer program (usually the licensee) as a pre-requisite to installation of the computer program. If there are several modules to be installed, their individual installation schedule should be specified.
Obligations of the Licensee
The Licensee may be obliged to create the proper operating environment for the computer program. This obligation can be phrased either as a specific obligation that the Licensee must fulfill or as a warranty made by the Licensee that the environment for the computer program will be prepared by the Licensee. Such environment would include the necessary hardware, operating system and other software as well as the communication or electrical infrastructure of the Licensee's premises. Without these obligations being fulfilled, the Licensor should be excused from performance of its obligations which depend upon them being completed.
Acceptance
The acceptance of the computer program should be measured against an objective standard.
Acceptance criteria could be as simple as having the computer program meet the product specification of Schedule A to the Licence Agreement which would include a list of the functional characteristics of the software. Acceptance criteria could be highly detailed to include performance characteristics of the software on specific equipment.
From the licensee's perspective, the best form of testing of the software is in actual business operation with "real data" and "real time". That is the environment in which the licensee intends to use the software. Such an environment however may include a number of parameters unanticipated by the licensor during the product specification stage. Instead the licensor may prefer a more clinical standard. The licensor may prefer the testing of the software under control circumstances in a well-defined environment on sampled data.
Vague phrases such as "to the satisfaction of the licensee" should be avoided. Subjective criteria breed litigation.
The acceptance will likely trigger a financial payment by the licensee to the licensor, as well as the beginning of a new relationship between the licensee and licensor: the warranty or maintenance phase.
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