Case Law
Harbinger UK Ltd. v GE Information Services
Ltd.
[2000] 1 All ER (Comm) 166
Information and Communications
Technology:
Case Note - Harbinger UK Ltd.
v GE Information Services Ltd.
21 Dec 1999
This case note first appeared on the Lancaster Buildings website
The issue in this appeal was the construction of a software distribution agreement whereby the licensor agreed to provide "support and maintenance in perpetuity" in return for an annual payment by the distributor. The licensor had effectively brought the distribution agreement to an end by notice and the question was whether the obligation to support and maintain was a freestanding obligation that survived the termination of the principal agreement. The judge below had decided that it was and that it survived for so long as the distributor was obliged to support and maintain the software of its licensees.
Meaning of "in perpetuity"
Evans LJ agreed that the words "in perpetuity" meant that the obligation to
support and maintain extended beyond termination of the distribution
agreement but added that they did not impose any time limit on the existence
of that obligation. That did not mean "literally 'forever' or 'until the
crack of doom'" because the time would come when the technology would be
superseded and the technology outdated. Then, the end-users would terminate
their maintenance contracts. He dismissed the licensor's objection that this
construction would impose an intolerable burden on that company because the
undertaking to provide after sales service for so long as it was required
would have been a strong inducement for end-users to buy the product in the
first place. His lordship distinguished Staffordshire Health Authority v
Staffordshire Waterworks Co. [1978] 1 WLR 1387, where the court had held
that an obligation to supply water at all times hereafter could be
terminated upon reasonable notice, on the ground that the obligation in that
case subsisted only for so long as a water supply agreement (which could be
determined upon reasonable notice) continued.
