Re: SGI Free SW license 1.1 compatability with Xfree86 style license
Note: I was just simply responding to your equivalence of the indemnity
clause cited below (note at the time of my response all I was going on was
the snippet quoted by Henning) with a "no warranty" clause. Digging the
license out, it seems there already is a pretty clear "no warranty" clause
so by normal contract interpretation the other clause would have a different
purpose. I read the first line of section 11 as simply saying that the
licensee is on its own for all losses caused to it by virtue of the use of
the license rights i.e. SGI is giving no indemnity, whether for third-party
claims or as between the SGI and the licensee.
"9. DISCLAIMER OF WARRANTY. COVERED CODE IS PROVIDED "AS IS." ALL EXPRESS
AND IMPLIED WARRANTIES AND CONDITIONS ARE DISCLAIMED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY,
SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NON-INFRINGEMENT. SGI ASSUMES NO RISK AS TO THE QUALITY AND PERFORMANCE OF
THE SOFTWARE. SHOULD THE SOFTWARE PROVE DEFECTIVE IN ANY RESPECT, SGI
ASSUMES NO COST OR LIABILITY FOR SERVICING, REPAIR OR CORRECTION. THIS
DISCLAIMER OF WARRANTY IS AN ESSENTIAL PART OF THIS LICENSE. NO USE OF ANY
COVERED CODE IS AUTHORIZED HEREUNDER EXCEPT SUBJECT TO THIS DISCLAIMER."
From: James LewisMoss <email@example.com>
Subject: Re: SGI Free SW license 1.1 compatability with Xfree86 style
Date: 06 Jul 2000 21:00:34 -0400
>>>>> On Thu, 06 Jul 2000 11:38:21 EDT, "Chloe Hoffman"
Chloe> Actually Henning's understanding of the nature of the clause
Chloe> is correct. An indemnity is a different animal than a
Chloe> warranty - they are not synonymous. A (no) warranty clause in
Chloe> a software license typically addresses what a licensor
Chloe> guarantees (or does not guarantee) with respect to the
Chloe> software. If the licensor does not live up to the warranty (if
Chloe> any) e.g. a warranty that the software would comply with the
Chloe> docs was provided and the software does not, the remedy is
Chloe> typically breach of contract/termination (although sometimes
Chloe> other remedies are provided) and the damages would involve the
Chloe> damages suffered by the licensee (subject to limitation of
Chloe> liability clauses).
Chloe> An indemnity however typically goes after a different concern
Chloe> (although it can overlap in coverage in some cases with a
Chloe> warranty e.g. intellectual property infringement and a
Chloe> warranty of title). An indemnity in a software license
Chloe> typically addresses losses caused by third parties to one of
Chloe> the contracting parties. In this case, the clause is trying to
Chloe> protect SGI (licensor) from losses caused by its licensees'
Chloe> "use" of the SGI code e.g. product liability suits brought by
Chloe> third parties against SGI caused by the licensee(s),
Chloe> third-party IP suits against SGI caused by the licensee(s),
Chloe> etc. A warranty provided (or not) by SGI won't get them that
Chloe> protection because the warranty/no warranty clause puts no
Chloe> obligation on the licensee(s). SGI could require a warranty
Chloe> from its licensees but that probably wouldn't give it the
Chloe> remedies it wants i.e. SGI doesn't merely want to terminate
Chloe> the agreement - it wants its losses to be covered. The type of
Chloe> indemnity below is common in OEM/software distribution
Chloe> agreements as well as in redistributables sections of
Chloe> off-the-shelf commercial software licenses.
Thank you for the clarification. Still I don't read Henning's
interpretation there (or in what you've said above). It's not SGI can
sue you if you use their software to compete with them. It's if
someone uses their software they've gotten from you and that someone
sues SGI takes no responsibility for that someone and they are all
your problem. Is this an accurate reading of the above? Or is there
This is not legal advice; just academic discussion. No attorney-client
relationship is established, etc. Sorry but got to do this to protect
SGI can sue you for any valid cause of action, with or without the contract,
whether or not you use (, distribute, etc.) their software or not (of course
whether SGI will be successful is another matter). Certainly, the primary
goal of an indemnity is typically to cover off third-party actions. If there
is something of dispute between the parties no contract is required to
provide the damaged party the ability to obtain compensation since the
damaged party can simply sue the other; the same can't simply be said of
actions brought against one of the parties by third parties. Nevertheless,
sometimes an indemnity is intentionally drafted to cover losses caused by
one party to the other (typically for some procedural and substantive
reasons). For example, such indemnities often cover breaches of
representations and warranties (note that language at the tail end of the
SGI clause). It is not beyond the realm that an indemnity clause can cover
losses caused by one party to the other (outside of the breach of
representation and warranty scenario). Indeed, such indemnity clauses may
cover losses not stricly based on a legal cause of action i.e. it is instead
based on a "private" law. The SGI clause here may (or may not) be
interpreted that widely. Of course, many other factors could come into play
such unconscionability/contract of adhesion, lack of consideration,
ambiguity of the clause, etc. which could seriously limit the scope and/or
effectiveness of such broad indemnity clauses including the SGI clause.
FYI indemnity clauses typically work on a notice basis. That is, the damaged
party (indemnitee) notices the indemnitor that it has suffered a loss. The
indemnitor then either refuses (and then typically awaits a lawsuit) or else
negotiates/pays the loss.
Chloe> This is not legal advice, no attorney-client relationship is
Chloe> established, etc. etc.
>> From: James LewisMoss <firstname.lastname@example.org> To: Henning Makholm
>> <email@example.com> CC: James LewisMoss
>> <firstname.lastname@example.org>, email@example.com Subject:
>> Re: SGI Free SW license 1.1 compatability with Xfree86 style
>> Date: 05 Jul 2000 22:04:31 -0400
>> >>>>> On 05 Jul 2000 16:05:56 +0200, Henning Makholm
>> >>>>> <firstname.lastname@example.org>
Henning> Scripsit James LewisMoss <email@example.com>
>> >> On 30 Jun 2000 18:49:01 +0200, Henning Makholm
>> >> <firstname.lastname@example.org> said:
Henning> That is a very broad clause: "Recipient will .. indemnify
Henning> .. SGI from, .. any loss ... arising out of Recipient's use
Henning> .. of the Covered Code". That seems to mean that if I use
Henning> the software in a business that competes successfully with
Henning> SGI, they could sue me and demand that I pay up for their
Henning> lost profits. If that's a legal interpretation I'd say this
Henning> is quite nonfree.
>> >> This reads to me just as a no warranty clause.
Henning> That is probably the intent of it. However, can you refuse
Henning> that my reading is one of the cases the language actually
>> Actually yes. It looks like a standard no warranty clause. It
>> uses big words and could have been clearer by just saying NO
>> WARRANTY, but I don't see your reading in it.
@James LewisMoss <email@example.com> | Blessed Be!
@ http://jimdres.home.mindspring.com | Linux is kewl!
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