TEC America, a vendor of point-of-sale systems, will pay $250,000 to Produce Palace International, a Michigan grocer, to settle the first lawsuit by a customer claiming that its computer system wouldn't work because of Year 2000 date-field problems. Specifically, the system rejected credit cards with Year 2000 expiration dates. The system, which was installed in 1995, is being returned to TEC America as part of the settlement. It will be replaced by a later version which has successfully handled cards expiring later than 2000 since early 1997.
The settlement appears to confirm a widely held opinion among legal experts that vendors are liable for Year 2000 problems. However, the real test will be when a case actually goes through the courts to the appellate level. The first case which may go to that level is one between retailer J. Baker, Inc., and Anderson Consulting. The latter developed a mainframe-based merchandising system for J. Baker, Inc., in 1991, but did not make it Year 2000 compliant. Baker wants reimbursement for the cost it incurred in upgrading the system; Anderson contends that it met the terms of its contract. If nothing else, the case may fix a date by which Year 2000 compliance should have been an essential feature of any system. Many experts in the industry think that date will be 1995, rather than earlier.
