One defence which it is anticipated that the software industry may run is to say that it did not anticipate, at the time the item of software was sold, that it would still be in use come the year 2000. As a matter of contract, it is clear that vendors are obliged to ensure that goods sold are æreasonably durableÆ, by which is meant of course that goods last for about as long, given proper usage, as they should. Strictly speaking, therefore, one might argue that software could reasonably be expected to last forever!

However, the matter may well differ in negligence. In a fast developing field such as applications software, it may be reasonable for a supplier to expect that their customers will purchase Year 2000 compliant updated versions from time to time.

Although it is possible that suing in contract may bring certain advantages over negligence, in practice, your lawyers are likely to advise you to avail yourself of BOTH courses of action by suing in the alternative.

The Legal Analysis of Software Upgrades

The fact that Year 2000 compliant upgrades have been issued subsequent to the purchase of the original software will not, in itself, protect the supplier against liability in contract. Clearly if the software supplied under the original licensing or sale contract remains faulty, that contract will have been breached. However, the availability of upgrades will affect the question of what damages are recoverable. English law requires that people take all reasonable steps to alleviate their potential losses - a duty which may stretch to imposing an obligation on software users to purchase an upgrade. Any costs incurred in mitigating losses, such as the price of purchasing the upgrade, are themselves recoverable.