UCITA & Other Online Contracts. (Copyright Corner)

By Gasaway, Laura | Information Outlook, October 2002 | Go to article overview
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UCITA & Other Online Contracts. (Copyright Corner)

Gasaway, Laura, Information Outlook

The Uniform Computer Transactions Act (UCITA) is a model uniform state law that must be adopted state-by-state. It basically creates a presumption that computer information transactions, which include, but are not limited to software, are licenses rather than sales. Further, it explicitly validates shrinkwrap, clickwrap or click-on contracting practices that may restrict warranties and purchasers' use of the software. Some of the other complaints about UCITA include: 1) that it validates post-payment disclosure of materials terms of a software licensing contract; 2) it permits licensors to fail to disclose known defects in the software; 3) it creates doubt about whether software transactions are covered by consumer protection law in existence for other goods; 4) it validates the use of transfer restrictions in the mass market that conflict with traditional consumer expectations; 5) it permits owners to exercise self help and disable a licensee's use of the software unilaterally; and 6) it prohibits a licensee from even criticizing the software.

Both Virginia and Maryland enacted UCITA in 2000. Following an initial flurry in which it appeared that many states would adopt the model law, UCITA seemed to stall. It has been opposed not only by library associations, but also by a wide range of consumer groups. A number of lawyers have also opposed enactment of the model law, including the American Bar Association's UCITA working group and 34 of the 50 state attorneys general.

By August 2001, the National Conference of Commissioners on Uniform State Laws (NCCUSL), the body responsible for UCITA, began to recognize that the proposed model law was unlikely to be enacted in additional states. Several states that considered UCITA actually enacted what is called a "bombshelter" law that allows a citizen of a state to avoid any provision in a contract that says it is governed by UCITA. Bombshelter legislation will prevent software producers from using electronic contracts that automatically select Virginia or Maryland as the choice of forum for any disputes under the contract, thereby making UCITA applicable to contracts in states that have not adopted it.

After the American Bar Association objected to UCITA, NCCUSL began to reexamine the provisions and changed some of the more controversial provisions. For example, electronic self-help was banned; instead, vendors would have to go to court for breach of contract. Additionally, consumer protection laws would trump UCITA, and no contract could waive consumer protection under state or federal law. Important to libraries and educational institutions, the right to criticize an electronic product was preserved; remedy for known material defect was preserved just as it is for any goods or services; and reverse engineering for interoperability was expressly authorized.

The American Bar Association working group on UCITA issued a report in February 2002 that agrees there is need for a uniform law, but stating that UCITA is still, unworkable in its current form, even with these changes. At the end of July 2002, NCCUSL met and offered 38 amendments to UCITA. It will present these changes to the American Bar Association.

Library associations continue to oppose even the amended UCITA, believing that it is fundamentally flawed and biased in favor of the software industry against the interests of libraries and their users. The Special Libraries Association, along with other library groups, is a member of AFFECT, Americans for Fair Electronic Commerce Transactions (http ://www-affect@ucita.

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UCITA & Other Online Contracts. (Copyright Corner)


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