Liability When Computers Fail

If a computer malfunctions and consequently conveys incorrect information to its user or to other computer systems, physical, or economic damages may occur.

Important systems that we depend on for daily activities may lose their functioning capabilities. These may include vital systems that help to operate:

Utility Companies (electric, gas, water, trash)
Credit card companies
Air traffic controllers
The stock market

Computer Failures
Computers might malfunction for a variety of reasons:

Poor design
Defective software
Defective hardware
Faulty data checking routines

Types of Liability
If a defective product causes damage, strict liability against the manufacturer may be applied. Usually, it must be proven that:

There was a defect in the product
The product was being used reasonably and safely
The defect in the product caused damage

In some cases, a seller may be liable for damages because of guarantees about the quality of service offered to its customers. Generally, the seller must offer a service that is:

Marketed to a large number of people
The same service for each person
Voluntary and for profit

In determining appropriate damages for the computer error and mishandled information, certain issues may be considered, including:

Physical injury
Emotional distress
Attorney’s fees
Lost profits