Case Note Gammasonics Institute for Medical Research Pty Ltd V Comrad Medical Systems Pty Ltd [2010] Nswsc 267

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Topics: Contract
CASE NOTE

Gammasonics Institute for Medical Research Pty Ltd v Comrad Medical Systems Pty Ltd [2010] NSWSC 267

New South Wales Supreme Court, heard by Fullerton J

Gammasonic v Comrad[1] demonstrates the reluctance of the courts to interpret the Sale of Goods Act to include software downloads as a “good”, preferring to leave the matter up to statutory review. It primarily discusses whether a software package delivered by online download is effectively classed as “goods" for application of Sale of Goods Act[2] and outlines the progressive court decisions that have considered the question and have begun to recognize software attached to a medium, like a cd package as a “goods”.

It also briefly addresses the applicability of statutory warranties of fitness for purpose and merchantable quality and supports that fitness for purpose and merchantable quality are implied by common law giving reference the test for implication in fact outlined in BP Refinery (Westernport) v Shire of Hastings (1977)[3]

Background and overview

The disputing parties are Gammasonics, a provider of services to radiologists in NSW, and Comrad, a business that provide software and information management systems to radiologists in Australia and New Zealand. The dispute concerns a contract between the parties for the delivery and installation of a software package via remote internet download called “Comrad RIS”; which was to manage workflow, patient registration and appointments, online referrals and processing of Medicare claims for Gammasonics.

The software was downloaded onto Gammasonics’ server and Gammasonic were purportedly responsible for hardware configuration and the network infrastructure specified to run the software.

Comrad delivered the software via internet download and certain areas of the software did not function as required. Gammasonics claimed to terminate the contract for breach of terms including “failure to deliver a functioning software package, failure

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