In instances where one entity aquires title in an item or items from another
entity (typically through purchase) this is correct. It is effectively what
quiring title means. (i.e. If I aquire title in X, then I own X and, subject
to appropriate legislation, I can do with X as I see fit.)
In some circumstances, such transfers of title are encumbered. The most
ovious example is, say, the purchase of a motor vehicle with finance.
Despite te fact that you own the vehicle (refer registration certificate,
your name is o it), there are constraints on what you can and cannot do with
it over and aove the requirements of laws pertaining to motor vehicles. The
most obvious cnstraint is that you cannot sell it. This is why REVS exists.
If someone owns an encumbered vehicle, they are not entitled to sell it to
you. If they take your cash, sign the transfer forms and depart, you in fact
do not own the vehicle, because the vendor (despite being the owner) was not
entitled to sell it. This is (loosely) what happens with the 6 pack of Milky
Ways. In return for being allowed to participate in a promotion, the
reseller agrees not to break up the pack. This gets tricky in that, whilst
the contract may appear reasonable, the act the it brings about may be
viewed as restrictive trade, in contravention of the appropriate act of
parliament. This is the basis of what you have read. By and large,
distributors are not allowed to exert control over retailers because this
tends to represent restrictive trade.
Computer software however is sold altogether differently. More to the point,
it isn't sold at all. (See below.)
>For example, OEM software that say "for distribution only with
>a new PC" or words to that effect may be sold by the seller to whomever they
>please with or without a new PC without any fear of prosecution.
This is not correct. Software houses and distributors can and do prosecute
other organisations for sales of that type.
>This is
>because that once the company has sold the product to the reseller, they
>cannot (legally) regulate how the product is resold.
Generally this is true, however as mentioned above, software is not sold.
It is licensed.
This is quite different. You NEVER own your copy of Word. Nor does Harvey
Norman where you paid for it. Nor does the replicator who provided it to
Harvey Norman.
At each step of the way, the transactions are conducted NOT on behalf of the
apparent seller, but as agencies of Microsoft. When you purchase Word from
Harvey Norman, you are in fact purchasing it directly from Microsoft's
agent, despite appearances (and the fact that Microsoft never handled the
package directly).
Instead of the product being purchased by Harvey Norman then sold to you, a
licensed media copy is purchased by one of Microsoft's agents (Harvey
Norman) from another of Microsoft's agents (one of the replicators) for
approximately the cost of the media. (Perhaps $20.) Harvey Norman maintains
a tally of the number of copies that it has sold as Microsoft's agent, and
submits a portion of the funds that it has collected from Microsoft's
customers (you) to Microsoft with that report at the end of each 'period'.
(Week, month, quarter, whatever is in their contract.)
The big difference here is Harvey Norman's involvement. Instead of being a
trader who buys large quantities of goods at volume discount pricing and
sells in smaller quantities to retail customers for a markup, Harvey Norman
is operating as the paid agent of Microsoft, selling licenses for the use of
Microsoft's product to Microsoft's clients (end users.) For each sale that
Harvey Norman makes for Microsoft, a commission is calculated and deducted
from the funds that Harvey Norman collected from Microsoft's customers and
will remit to Microsoft.
In turn, the license conditions apply to you. The only thing that entitles
you to use Microsoft's intellectual property is the license that was granted
to you in return for your payment to Microsoft's agent of a license fee.
Therefore, you (the end-user) are bound by the entire agreement, subject to
legal constraints (and severability, see below.)
>Of course whether or
>not they continue to supply this seller is their own business, but once the
>goods are supplied to the seller, he may dispose of them any way he wishes.
This is true of goods where title passes. This does not occur with software.
>Along the same line as this is clauses in licences saying that in the event
>that you sell your software to someone else, you must pass on or destroy all
>copies of the software that you made. Is this legal or enforceable?
Of course. If you make copies over and above those allowed for by the
license, you are in violation of the license and lose all rights to use.
In including this clause, Microsoft is making the license transferable (they
are not required to do so, but it is common sense to do so) on the stated terms.
Again, you never owned the software, so you are not free to do with it as
you wish. If you wish to transfer it, you are entitled to do so only in
accordance with the terms of the license.
>Are there any other general clauses in software licence agreements that are
>invalid?
No. Not prima face. Certainly, if you test a clause, you may discover it to
be unenforceable, but testing licenses is nebulous as it stands. Testing
Microsoft licenses is, for most people, rather foolish.
(N.B. "Test" means have a dispute heard by a court.)
>I'm in the process of buying a house, and after reading all the contracts and
>agreements associated with buying a house and taking out a mortgage, I'm
>starting to get the shits with the bullshit that appears in these contracts.
Understandable, but recognise that the bank is your partner in that
contract, you both have substantial interests to protect.
>And what really annoys me is that they add a clause to the contract saying
>something like "if any of the clauses in this contract are unenforcable by law,
>that that invalid clause does not affect the validity of the rest of the
>contract".
This is frequently referred to as a severability clause.
>I read this as "We will put whatever we like in this contract and
>it is your repsonsibility to find out whether it is legal or not. If you
>catch us out, then we won't use the clause that you caught us on, but we'll
>still use all the others that you haven't".
Then you read it wrong.
You would be plain stupid to sign a contract without such a clause.
Severability clauses protect BOTH parties.
Consider the following (contrived, incorrect) example. You buy a house with
a mortgage. The title in the house is not yours, but the bank's, until the
loan is paid out. Your relationship with the bank collapses, they are keen
to get you out of the house and sell it to recover their cash. An act of
parliament makes certain methods of calculating interest illegal. OOPS! Your
mortgage uses such a method. Suddenly the contract is frustrated (can't be
carried out by one or both parties because of external events outside their
control), lacks frustration and severability clauses, so becomes totally
void. The bank gleefully sends you an eviction notice to get out of their
house (as you no longer have a contract with them that allows you to occupy
it), sells it and keeps ALL of the money.
Very few businesses would attempt something quite so brazen, but the point
is that individual clauses DO become unenforceable over time, and without
frustration or severability clauses, one or both parties is likely to be
severely disadvantaged if the contract becomes entirely void.
If there are clauses in a mortgage contract that you are being asked to sign
that your legal advisor (or you) consider unacceptable, have them removed.
If the bank won't come to the party (or attempt to negotiate an alternate
solution with you), go elsewhere.
- Raz
"It often upsets a man's God fantasies to have (Misquoted? from )
someone shoot down one of his helicopters." (Ben Elton's "Stark" )