My Lords, we have heard that this amendment seeks to introduce into the digital content chapter a right for businesses to be able to exclude or limit their liability for meeting the quality rights if doing so is “reasonable”.
We have chosen not to allow “reasonable” limitations on liability for the quality rights in any of the goods, services or digital content chapters of the Bill. This reflects the current law in relation to business-to-consumer contracts for goods. Clause 47 prevents a trader contracting out of the consumer’s statutory rights and remedies specified in that clause. This is because, in
practice, the liability will for the most part be limited to the contract price of the digital content, as for goods. So there is a natural cap.
Clauses in consumer contracts that exclude liability entirely, or limit liability to significantly less than the contract price, are unlikely to be judged as reasonable anyway. I have heard industry concerns about the complex environment in which digital content works, and I know that contractual relationships between traders may be complex, as may the technical issues. Against this backdrop, it is difficult for a trader to have full control over the quality of the digital content that they supply, so traders have concerns about being liable for problems that are not entirely in their control. However, as I said earlier, is it right, from the consumer’s perspective, that traders can limit their liability? Surely if a trader offers to sell digital content for a consumer, they should take responsibility for the consumer getting what they expect.
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Complex arrangements are not a defence against poor product offerings, as we have made clear in Clause 39, which deals with products supplied across a network. Allowing “reasonable” limitations makes the situation unnecessarily complex. It also risks that traders will use—and consumers will think they are bound by—terms which would not bind the consumer. Here is an example from some real terms and conditions for digital content. It says that the company:
“provides the product software ‘as-is’ and disclaims all warranties and conditions, whether express, implied, or statutory, including the warranties of merchantability, fitness for a particular purpose, title, quiet enjoyment, accuracy, and non-infringement of third-party rights”.
It further says that the company:
“makes no warranty that the product software will be uninterrupted, free of viruses or other harmful code, timely, secure, or error-free”.
We want to put it beyond doubt that such terms are not binding. Introducing the word “unreasonable” into the Bill would not give consumers that clarity. As such, the amendment would see consumers of digital content with lesser protections than consumers of goods. I therefore ask my noble friend to withdraw his amendment.