A Leap Forward: Why States Should Ratify the Uniform Computer Information Transactions Act

Article excerpt

I. INTRODUCTION

As a new century dawns, the American economy continues to evolve. Long gone are the days when the United States dominated the world economy by manufacturing goods. Today, our economy depends much more on services and information.(1) As the dominant players in our economy shift, the law needs to follow suit and deal with new issues. One recent piece of legislation attempts to bring the law in line with the developing information industry.

The Uniform Computer Information Transactions Act (UCITA or Act) has been drafted to address questions regarding contracts covering computer information. Patterned after the Uniform Commercial Code (UCC or Code), the UCITA actually began as a new article to the UCC.(2) However, the drafters realized that the specifics of an information product could not match the legal specifications of the sale of a good from Article 2. Accordingly, the drafters renamed the statute the UCITA to denote the Act's narrow focus to computer information. Originally known as proposed Article 2B, the drafters revised the Act, although much of the terminology remains the same.

The UCITA is not yet law. The National Conference of Commissioners on Uniform State Laws (NCCUSL) drafted the Act. NCCUSL also drafted the UCC.(3) The 107-year-old organization attempts to bring uniformity to state laws by drafting legislation and then lobbying each state to pass the law.(4) NCCUSL designs its commercial law statutes to "codify established commercial practice and its reflection in the decided cases."(5) NCCUSL completed its final draft of the UCITA in the summer of 1999 and then voted on the enactment on July 29, 1999. The Act passed by a vote of forty-three to six.(6) As of the publication date, only one state has voted on the UCITA. Virginia adopted UCITA as law and the governor signed the bill on March 14, 2000.(7) The Act has been introduced to the legislatures in Delaware, the District of Columbia, Hawaii, Illinois, Iowa, Maryland, and Oklahoma.(8)

Despite the fact that a large majority of NCCUSL members voted to approve the UCITA, the Act is not without critics. Several organizations have stepped forward to voice their opposition to the Act and asked state legislatures to not approve the law.(9) Parties opposing passage of the UCITA include consumer groups,(10) library associations,(11) writers' groups,(12) academics,(13) state attorneys general,(14) and the Federal Trade Commission (FTC).(15) Although these organizations oppose the Act for various reasons, one common thread that emerges is that the UCITA favors software producers to the detriment of software users.(16)

This Comment discusses the support and opposition to the UCITA. In Part II, this Comment examines the Act. This Comment compares the UCITA to Article 2 of the UCC. The UCITA and Article 2 share several similarities, as the Act began as an addition to Article 2. However, the UCITA also contains several innovations that distance it from the sale of goods provisions of Article 2. As a number of commentators have lined up on both sides of the Act, Part III of this Comment views the support for and opposition to the UCITA. After reviewing the commentary, this Comment concludes that state legislatures should enact the UCITA.

II. WHAT IS THE UCITA AND HOW DOES IT FUNCTION?

The UCITA began as Article 2B of the UCC. The UCC originated as a project to create uniformity in commercial law. The Code has emphasized freedom of contract and adherence to business standards.(17) These factors differentiate the UCC from regulatory statutes that place more restrictions on parties. Despite several revisions of the major Code sections, the UCC has been a remarkable success. Two prominent commentators describe the UCC as "the most spectacular success story in the history of American law."(18) With the desire to enact a statute true to the commerce-friendly UCC, NCCUSL commenced drafting Article 2B. …