National Conference of Commissioners on Uniform State Laws

211 E. Ontario St., Suite 1300, Chicago, IL 60611
tel 312-915-0195, fax 312-915-0187

For Immediate Release

New Uniform Act Meets Immediate Needs of the Information Age

August 2, 1999 - Information technology accounts for more than one-third of the nation's economic growth and is the most rapidly expanding component of the U.S. economy. Until now there has been no law that provides clear, consistent uniform rules for the intangibles of computer information transactions. To meet this need, the National Conference of Commissioners on Uniform State Laws (NCCUSL) approved at its 108th Annual Meeting in Denver, July 23-30, a uniform law that provides fundamental rules for licensing contracts between users and software vendors or vendors of information in electronic form.

The Uniform Computer Information Transactions Act (UCITA) will make it possible for states to provide a neutral and predictable legal framework for transactions in computer information and greater legal certainty for the millions of transactions which are occurring daily under less than clear legal rules.

"The Uniform Computer Information Transactions Act addresses a long-standing need for uniform law treatment of software and other computer information contracts," says Carlyle C. Ring, Jr., chairman of the committee that drafted UCITA. "As the United States moves from an economy centered around transactions in goods to an information economy, the need has grown dramatically for coherent and predictable legal rules to support these contracts that underlie that economy."

Over the last several decades, licensing has developed as a form of contract to facilitate electronic transactions of information to users. At the same time, licensing protects software and information vendors who may invest millions of dollars in creating and assembling the information, which otherwise is easily copied and disseminated.

Licensing gives publishers the ability to protect their economic interests, structure types of products, and respond to market demands. Computer technology has made new information products available to customers at a rapidly declining cost.

UCITA is the first uniform law governing licensing contracts. UCITA adopts accepted and familiar principles of contract law, setting the rules for what law governs, how to create electronic contracts, and what default rules apply in Internet contracts.

UCITA covers software and information that is electronically disseminated. It does not cover other kinds of licenses of information such as motion picture contracts. Also excluded are distribution of information in traditional written form, such as books, magazines and newspapers.

Under the Act, there are separate sections dealing with mass-market licenses (ie. shrink-wrap and click-wrap licenses), which commonly accompany copies of software and other information products, and warranties tailored to software. UCITA follows basic contract law, and adds many benefits to users with additional protections to consumers. When all license terms are not available for review before payment and delivery, UCITA mandates that there be an opportunity to review and reject those terms, with a right to a cost-free refund from the vendor if the terms are not acceptable.

UCITA extends warranty rules to all software licenses and requires that a warranty disclaimer be conspicuous. It follows current law on the sales of goods, providing an absolute right of return, including refund of the purchase price and damages for injuries caused by defects, when a warranty is breached.

The information industry has grown exponentially in the last decade and already exceeds most manufacturing sectors in size. The numbers of transactions in information and their dollar value are immense. UCITA provides a single set of rules which can be applied across the many industries which provide computer information products, bringing U.S. commercial law into the information age.
The National Conference of Commissioners on Uniform State Law is now in its 108th year. The organization comprises more than 300 lawyers, judges, and law professors, appointed by the states as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, to draft proposals for uniform and model laws and work toward their enactment in their legislatures. Since its inception in 1892, the group has promulgated more than 200 acts, among them such bulwarks of state statutory law as the Uniform Commercial Code, the Uniform Probate Code, and the Uniform Partnership Act.

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