UTK License Agreement & Liability Risk

["Wayne, Rachel Sommer" <rwayne1@mail.tennessee.edu>]

All,

As a State Institution, The University of Tennessee must follow 
Tennessee State Law. These laws can be especially difficult when 
entering into contracts for electronic resources. In particular, 
Tennessee Law requires the following:

12-4-119. Limitations of liability and warranty in state contracting.

(a)  Agencies and departments of the executive branch of state 
government may allow limitations of liability and limitations of 
warranty in contracts for personal services, professional 
services, and consultant services according to the procedures for 
services contracting set forth in regulations promulgated by the 
commissioner of finance and administration in accordance with 
12-4-109(a)(1)(A).

(b)  The limitations set forth in subsection (a) may not reduce 
the state's potential recovery from a contractor below two (2) 
times the value of the contract without the written permission of 
the commissioner of finance and administration. The commissioner 
shall promulgate rules and regulations in accordance with 
12-4-109(a)(1)(A) describing the circumstances in which the 
limitations are permitted and the procedures for obtaining 
permission.

(c)  In no event shall a limitation of liability or warranty 
permitted by this section limit the liability of the contractor 
for intentional torts, criminal acts, or fraudulent conduct.

(d)  The purpose of this section is to limit the monetary damages 
recoverable by the state in a claim or legal action against its 
contractor. This section does not authorize any further 
limitation on the legal rights of the state, does not constitute 
a waiver of sovereign immunity of the state, and does not 
authorize a cause of action against the state in any 
jurisdiction.

[Acts 2000, ch. 722, 2; 2003, ch. 413, 2; 2007, ch. 169, 1.]

The Library at UTK has been struggling with vendors to modify 
contracts to comply with the law stated above. In some instances 
a vendor will not change their license agreements. When this 
impasse occurs, the library is required to state why an agreement 
for the electronic resource would not pose a risk of liability 
for the University or the state.

I am writing to you all to ask if anyone has had a similar 
experience. If so, can you please advise me on what you did? 
Additionally, if anyone has any suggestions as to how a library 
may answer this question of "risk" please let me know.

I appreciate your help and consideration.

Thank you,
Rachel Wayne

If you would prefer, please contact me personally at 
rwayne1@utk.edu.

Licensing Specialist
The University of Tennessee Library
Knoxville, TN 37996-1000