A Software Transfer Agreement and its Implications for Contract, Sale of Goods and Taxation

Abstract

Considers the nature of a software supply transaction, and whether it is a sale or a licence. Examines a typical software transfer transaction and end user licence agreement. Compares the approach taken by the courts in England, India and the US. Proposes the adoption of a functional test, as applied in the Indian Supreme Court ruling in Tata Consultancy Services v Andhra Pradesh, to determine whether the subject of a transaction constitutes goods, noting also the importance of the nature of an agreement in relation to sale of goods legislation and sales tax.

Keywords: Software, taxation, sales tax, service tax, Tata Consultancy Services, St. Albans