8. Limitation of Liability

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Both OSL and AFL

Under no circumstances and under no legal theory, whether in tort (including negligence), contract, or otherwise , shall the Licensor be liable to any person for any direct, indirect, special, incidental, or consequential damages of any character arising as a result of this License or the use of the Original Work including, without limitation, damages for loss of goodwill, work stoppage, computer failure or malfunction, or any and all other commercial damages or losses. This limitation of liability shall not apply to liability for death or personal injury resulting from Licensor 's negligence to the extent applicable law prohibits such limitation. Some jurisdictions do not allow the exclusion or limitation of incidental or consequential damages, so this exclusion and limitation may not apply to You.


Section 8 of the OSL/AFL disclaims liability for damages.

An attorney drafting a liability disclaimer on behalf of a licensor has an interesting challenge. The attorney must identify all possible ways in which a licensee may suffer damages (i.e., loss, detriment, or injury), and then the attorney must expressly announce that the licensor will pay for none of that. In that way, the limitation of liability provision in most licenses protects the licensor ”not the licensee.

The OSL/AFL limitation of liability provision first identifies the possible legal theories under which a licensee may claim damages. Tort (including negligence) is the civil law that deals with private wrongs or injuries; contract is the civil law that deals with breaches of written or oral agreements. The phrase "under no circumstances and under no legal theory" at the beginning of the sentence , and the phrase "or otherwise" at the end of that list of legal theories, is intended to mean a total and complete limitation on liability.

As I shall explain, such a total and complete limitation isn't actually allowed by the law.

Liability can potentially extend to any person . For example, software may be incorporated into a commercial product that causes injuries to persons other than the licensee. Consider what might happen, for example, if defective software were used to run a nuclear power plant or control a space shuttle.

Although the OSL/AFL (and most other open source licenses) disclaim liability to any person , those third parties are not subject to the limitation because they have never agreed to the license ”and they remain free to sue whoever they believe is liable for their injuries. The purpose of this language is to clarify that, as between the licensor and the licensee , it is the licensee who is potentially liable for injury to third parties. So if damages are ultimately assessed for injury to third parties, the licensee will pay them. (The effect on injured third parties of this limitation of liability provision is similar to an indemnification provision under which the licensee indemnifies the licensor for injuries to third parties.)

The OSL/AFL limitation of liability provision next identifies the types of damages that courts may potentially award. "Direct" damages are those that follow immediately upon the act done; in the case of a breach of contract, as one court put it, they are damages which, in the ordinary course of human experience, can be expected to result from breach. "Indirect" damages, of course, are those that are not direct. "Special" damages are those that do not arise from the wrongful act itself, but depend on circumstances peculiar to the injury or the parties; in contract law, they are damages that were not contemplated by the parties at the time the contract was made. "Incidental" damages are those expenses that result from an injured party taking commercially reasonable steps to deal with the wrongful act. "Consequential" damages are those that do not flow directly and immediately from the wrongful act, but only from some of the consequences or results of such act; anyone who deals with computer technology in modern commerce realizes the substantial potential financial consequences, for example, of replacing defective software.

As if that list were not enough, the OSL/AFL licenses then list specific examples of damages for which the licensor disclaims liability. Computer software can be such an integral part of a licensee's business that its failure risks the business itself. The OSL/AFL disclaim liability for that, mentioning specifically "loss of goodwill, work stoppage, computer failure or malfunction, or any and all other commercial damages or losses."

The intent of the first long sentence of this limitation of liability provision is to limit liability for absolutely everything the licensor can think of. Of course, the law doesn't really allow someone to simply write a liability disclaimer and then get away with outrageous commercial activities. Licensors always remain liable ”regardless of a disclaimer of liability ”for criminal activities, for unfair business practices (including antitrust), and for fraudulent behavior that induces licensees to accept the defective or dangerous software under the license.

Consider the effect of the limitation of liability provision in light of the express warranty of provenance in OSL/AFL section 7. Even in the event of a breach of that warranty of provenance, liability for damages may still be limited. Licensors may not have to pay damages even if it is discovered that the licensor didn't actually have authority to grant a sublicense to the software. For example, suppose a contributor lied about the provenance of his or her contribution to a project and the project, in reliance on that contributor 's license, distributes the work under the OSL/AFL. The OSL/AFL disclaim liability for direct, indirect, etc., damages resulting from any such breach of warranty.

That liability disclaimer may not always be effective. In particular, in most jurisdictions, if a licensor provides a warranty of provenance with full knowledge that the promise he or she made is untrue or knowing that he or she does not have a reasonable basis for making the promise of provenance, that licensor may be liable for fraud despite his or her limitation of liability.

And so, the second and third sentences of the OSL/AFL limitation of liability provision remind licensees that applicable law may prohibit certain limitations of liability. That applicable law may be national, state, or local. In such situations, the licensor remains potentially liable regardless of what the OSL/AFL say. Only your own attorney can properly advise you of what that potential liability might be.

Once again, licensors should not rely on a limitation of liability provision to protect themselves from fraudulent or criminal or outrageous business behavior. They can, however, rely on limitation of liability provisions to protect them from the effects of accidental and unexpected breaches of the warranty of provenance or other implied or express warranties.

Comparison to Other Licenses

Every open source license in this book contains a limitation of liability clause.

The only time the specific wording will matter is if a licen-see or third party suffers an injury and his or her attorney identifies a type of liability that the open source licensor's attorney forgot to disclaim. It requires that we speculate without bound about future events. For that reason, I'll leave any further discussion about liability to Chapter 12.

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Open Source Licensing. Software Freedom and Intellectual Property Law
Open Source Licensing: Software Freedom and Intellectual Property Law
ISBN: 0131487876
EAN: 2147483647
Year: 2004
Pages: 166

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