Common use of System Defect Clause in Contracts

System Defect. 3.1 If the functions set out in Article 2 fail to fully materialize, Party A may refuse to inspect and accept the System. Party B shall be liable for any loss or liability arising from such failure and shall compensate for all the direct losses, if any, suffered by Party A. If as a result, this Agreement becomes impossible or unnecessary to perform, Party A may terminate this Agreement and reserve the right to claim full compensation for its losses from Party B. 3.2 If there is any functional defect or operation interface defect in part after the System has been checked and accepted by Party A, Party A shall inform Party B in writing. Party B shall respond within 24 hours after accepting the notice, and exclude the impediment unconditionally through amending, upgrading or correcting the program within the period confirmed by both parties at party B’s own expenses. Party B shall be responsible for the damages of Party A thus caused. 3.3 If there is any data security defect existing after the system has been checked and accepted by Party A, Party B shall be liable pursuant to the provision of data security responsibility in Article 7 of this Agreement.