Causes of Action on and off the Contract in Year 2000 Litigation

I. Introduction With the advent of computers, many people believed they had witnessed the most advanced technological breakthrough of our time. There was nothing a computer system could not do. These perfect machines, which simplified our lives, became a necessity at home and work. Computers were able to perform, in a fraction of the time, the same functions that once took thousands of people hours to complete. Suddenly, an infinite amount of information on any given topic was at our fingertips. These computers were able to provide a worldwide link with the push of a button. However, no one ever dreamed that such an astonishing invention might contain a bomb waiting to detonate worldwide almost simultaneously. For these reasons, one of the hottest and fastest growing topics of public concern today is something referred to as the Year 2000 problem. Many in the computer industry refer to this topic as the Y2K problem, or the Millennium Bug.1 This problem is not a single problem, but actually consists of a number of related problems.2 The predominant problem refers to computer hardware and software that uses two digits to identify the year instead of four.3 For example, the year 1996 is input, stored, sorted, and calculated as 96. The Year 2000 or Y2K problem refers to the year 2000 being treated as 00, which will actually be interpreted by the computer hardware or software to mean 1900.4 Inaccurate date/year recognition by operations involving date accessing, sorting, comparing, indexing, and computing may cause errors that crash the computer system, cause software applications to operate incorrectly, or worse, slowly corrupt data over time, which will go unnoticed until a problem arises.5 One author has suggested "that of all the challenges which the start of the millennium will present for businesses and other organizations, few are as serious as the software time bomb ticking away within many computer systems."6 At this time, the catastrophic impact of the Y2K problem on business, government, and society is impossible to determine. Many consumers are attempting to locate alternative software and hardware that is Year 2000 compatible. However, there are still those who have not even heard of the problem, despite widespread publicity, which may pose an even greater threat.7 Should individuals or companies fail to address or correct their systems, it is possible for their defective information to spread to other computer systems that may have already been upgraded at a great expense to the purchaser.8 Thus, a cycling loop of error, correct, infection, error, and so forth, could result. For this reason, there is no guarantee that the Y2K problem can be corrected. Since the Y2K problem is drawing closer day by day, questions have arisen as to how to resolve the problem, and once resolved, who should bear the cost and expense of implementing the resolution. Most license or sale agreements dealing with computer hardware or software contain provisions limiting the manufacturer's and seller's liability to simple repair or replacement of the product. However, what should happen if a manufacturer or seller is unable to provide Y2K compatible products? In this situation, is the purchaser left without a remedy? This Article will address issues related to the Year 2000 problem and the solutions and remedies available to purchasers of hardware or software. Specifically, Part II will focus on whether the Uniform Commercial Code applies to license and sale agreements for computer hardware and software. Part III will address whether the limited liability and remedy provisions contained in computer software and hardware license and sale agreements are enforceable. Part IV will focus on the rights of a purchaser or licensee of computer hardware or software when the remedies contained in the contract for sale or license fail to provide a remedy. Part V will highlight the effect that the economic loss rule will play in the impending litigation over Year 2000 issues. …