The Product Specification
copyright 1997 Donald M. Cameron , Aird & Berlis
Contents
- Schedule A: The Product Specification
- Express Warranties as to Product and Performance
- Project Milestones
- Implied Warranties as to Products
- Change Orders
Schedule A: The Product Specification
One of the most important parts of any licence agreement is the specification of the product and its performance characteristics. Although the grant of the use of the computer program forms the heart of any agreement, unless it is clear what is meant by the term "computer program", there will be no objective standard against which to measure delivery, acceptance, performance of warranties.
Too often in a negotiation, the product specification is left "for someone else to draft" (the technical person) while the rest of the obligations under the Agreement are negotiated. This is a dangerous oversight since the Licensor's ability to provide and service the product depends upon the characteristics of the product itself.
A well-designed product specification (which includes a performance specification) can be an objective yardstick against which other aspects of the agreement are measured. The creation of the Product Specification early in the negotiations, requires the parties to set their minds, at the earliest opportunity, as to exactly what the Licensee wants in terms of a product (see "Negotiating the Agreement").
The Product Specification is also used as a basis for product warranties.
Definition: Computer Program: The Computer Program shall have the features and performance characteristics described in the Product Specification, Schedule A to this agreement.
Express Warranties as to Product and Performance
The Licensor should warrant that the computer program will have the features and conform to the performance specifications of the Product Specification.
The Licensor warrants that the Computer Program shall meet or exceed the Performance Specifications set out in the Product Specification of Schedule A.
The Product Specification may incorporate external standards to which the computer program will comply. Other examples of external standards include Request For Proposals or Descriptions of the Licensee System and Software Environments (ie. operating systems).
The Licensor warrants that the Computer Program shall meet or exceed the Performance Specifications set out in the Request for Proposal dated **.
If the Licensor is licensing a standard form of computer program then the Product Specification will consist of a brochure describing the high-level functions of the computer program.
"As-is"
For a stock program, the Licensor will want to warrant almost nothing and put all the risk o the Licensor.
The computer program is supplied "as is" and no warranties are made as to its performance.
Response Time Warranty
The response time of a system can be critical to the acceptability of software by its users. No one wants a new system or changes to an existing system to result in slower response time. As with other performance standards however, the response time will be dependent not only upon the licenced software but also upon its operating environment and the number of users using the system. It may be difficult for the Licensor to predict the response time of the software in the Licensee's new environment. The volume of data, the speed of the hardware and the communication system will all affect the response time.
As with the Acceptance Criteria, the measurement of response time should only be guaranteed while the software is running on a system on which the Licensor can predict its behaviour. In some cases this will be an artificial environment: a machine having a certain processor, certain memory, etc.
From the Licensee's perspective, the software should work at a certain speed on a system that is close to the intended operating environment.
Project Milestones
The Product Specification can also include a Product Schedule which sets out a time line as to when certain functionality is to be completed or operational.
Change Orders
If the Licensee wants to change the product specification, it will have to formally order a change to the specification by means of a Change Order. The Licensor and the Licensee should agree to the Change Order and to any effect the change has on the cost of the licence or cost of the product development.
See also: Implied Warranties as to Products
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