SOFTWARE DISTRIBUTOR AGREEMENT VIOLATES RULE AGAINST PERPETUITIES

A Missouri district court, applying New York law, ruled that the Rule against Perpetuities can be applied to software agreements, especially where the provisions concerning the distribution capacities contained in such agreements are open-ended and do not provide time limitations.

The following questions have been addressed in this article:

What is the Rule against Perpetuities and how can it be applied to software?
What was the reasoning of the court in McAllister Software Systems, Inc. v. Henry Schein, Inc.?
What were Schein’s arguments against application of the Rule against Perpetuities?

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