Computer technology - Products or Services?

Determining whether or not computer technology is a service or a product is crucial in assessing liabilities. If programs are viewed as a product, then strict liability may be applicable and a plaintiff would not need to prove the "absense of due care" element needed in proving negligence cases. Strict liabilities may also be applied if the "statute of limitations" requirement in negligence cases expires. Under strict liability claims, consumers only need to prove that there was a defect in the product under the Tort law above -- "The article sold must be dangerous to the extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics".

If computer technology was viewed as a service, however, then professional negligence principles such as those covering doctors would apply (medicine is treated as a service by courts, not as a product, and hence negligence liability applies). Classification of computer programs as services is thought to be desirable because it allows victims to recover damages from the providers ONLY if negligence can be proven, which is much more difficult than merely proving the presence of a defect. Classification of programs as services can preclude the possibility of a liability claim against the program manufacturer, since negligence requires a high burden of proof, and it is very difficult to show when the defect occurred during the manufacturing process. This may cause victims to earn less in possible damages.


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