The Kingsway Hall Hotel alleged that the Entirety online booking software consistently underperformed and that it was forced to employ extra staff to cover the problems. It had hoped that the software would speed check-in and check-out, and improve reservation processing. In the end, the hotel bought a replacement product.

Lawyers called it an "important" judgement that highlighted to customers they could question licensing terms that were weighed against them. The damages were awarded for lost profits, the cost of the software, and the additional staffing costs.

During the case, the hotel successfully overcame a clause in Red Sky's software licence that said if the software did not perform as advertised, customers would have to make use of maintenance and support functions -- and effectively could not do anything else. Red Sky suggested in hearings at the Technology and Construction Court that the term protected it from lawsuits.

Judge Toulmin ruled that this liability clause was not "reasonable" and that Red Sky should have alerted the hotel to problems with the software during demonstrations. Red Sky did not immediately return calls for comment.

In a sales pitch that secured the licensing sale to the hotel, Red Sky had also shown examples of the software in use that were not closely related to the hotel's needs, the judge said, meaning Red Sky could not exclude itself from liability.