UNIFORM COMMERCIAL CODE ARTICLE 2B: SOFTWARE CONTRACTS AND LICENSES OF INFORMATION [COMPUTER INFORMATION TRANSACTIONS] NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS February 1, 1999 UNIFORM COMMERCIAL CODE ARTICLE 2B SOFTWARE CONTRACTS AND LICENSES OF INFORMATION [COMPUTER INFORMATION TRANSACTIONS] With Notes COPYRIGHT 1999 BY THE AMERICAN LAW INSTITUTE AND NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS The ideas and conclusions set forth in this draft, including the proposed statutory language and any comments or reporter’s notes, have not been passed on by the National Conference of Commissioners on Uniform State Laws, the American Law Institute, or the Drafting Committee. They do not necessarily reflect the views of the Conference and its Commissioners, the Institute and its Members, and the Drafting Committee and its Members and Reporters. Proposed statutory language may not be used to ascertain the intent or meaning of any promulgated final statutory proposal. DRAFTING COMMITTEE ON UNIFORM COMMERCIAL CODE ARTICLE 2B CARLYLE C. RING, JR., 1401 H. Street, N.W., Suite 500, Washington, DC 20005, Chair DAVID E. BARTLETT, 455 Golden Eagle Drive, Broomfield, CO 80020, The American Law Institute Representative AMELIA H. BOSS, Temple University, School of Law, 1719 N. Broad Street, Philadelphia, PA 19122, The American Law Institute Representative JOHN A. CHANIN, 1020 Aoloa Place, Suite 206B, Kailua, HI 96734 STEPHEN Y. CHOW, One Beacon Street, 30th Floor, Boston, MA 02108 PATRICIA BRUMFIELD FRY, University of North Dakota, School of Law, P.O. Box 9003, Grand Forks, ND 58201 THOMAS T. GRIMSHAW, Suite 3800, 1700 Lincoln Street, Denver, CO 80203 LEON M. McCORKLE, JR., P.O. Box 387, Dublin, OH 43017-0387 THOMAS J. McCRACKEN, JR., Room 600, 134 N. LaSalle Street, Chicago, IL 60602 JAMES C. McKAY, JR., Office of Corporation Counsel, 6th Floor South, 441 4th Street, N.W., Washington, DC 20001 BRUCE MUNSON, Revisor of Statutes Bureau, Suite 800, 131 W. Wilson Street, Madison, WI 53703 DAVID A. RICE, 10 Circuit Road, Chestnut Hill, MA 02167, The American Law Institute Representative LEWIS BART STONE, 52nd Floor, 200 Park Avenue, New York, NY 10166 RAYMOND T. NIMMER, University of Houston, Law Center, 4800 Calhoun, Houston, TX 77204, Reporter EX OFFICIO GENE N. LEBRUN, P.O. Box 8250, 9th Floor, 909 St. Joseph Street, Rapid City, SD 57709, President BARRY H. EVENCHICK, 8th Floor, One Gateway Center, Newark, NJ 07102, Division Chair AMERICAN BAR ASSOCIATION ADVISORS DONALD A. COHN, 14 Gale Lane, Greenville, DE 19807, Co-Advisor DANIEL S. COOLIDGE, 1000 Elm Street, Box 3701, Manchester, NH 03105, Law Practice Management Section Advisor MARY JO HOWARD DIVELY, One Oxford Centre, 40th Floor, Pittsburgh, PA 15219, Business Law Section Advisor GEORGE L. GRAFF, 30th Floor, 399 Park Avenue, New York, NY 10022, Co-Advisor LYNN P. HENDRIX, 1700 Lincoln Street, Suite 4100, Denver, CO 80203, Intellectual Property Law Section Advisor EXECUTIVE DIRECTOR FRED H. MILLER, University of Oklahoma, College of Law, 300 Timberdell Road, Norman, OK 73019, Executive Director WILLIAM J. PIERCE, 1505 Roxbury Road, Ann Arbor, MI 48104, Executive Director Emeritus Copies of this Act may be obtained from: NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS 211 E. Ontario Street, Suite 1300 Chicago, Illinois 60611 312/915-0195 2 1 SOFTWARE CONTRACTS 2 AND LICENSES OF INFORMATION 3 [COMPUTER INFORMATION TRANSACTIONS] 4 TABLE OF CONTENTS 5 PART 1 6 GENERAL PROVISIONS 7 SECTION 2B-101. SHORT TITLE. 8 SECTION 2B-102. DEFINITIONS. 9 [A. General Scope and Terms] 10 SECTION 2B-103. SCOPE. 11 SECTION 2B-104. EXCLUSIONS FROM THIS ARTICLE. 12 SECTION 2B-105. RELATION TO FEDERAL LAW; TRANSACTIONS SUBJECT TO OTHER 13 STATE LAW. 14 SECTION 2B-106. VARIATION BY AGREEMENT; RULES OF CONSTRUCTION; 15 QUESTIONS DETERMINED BY COURT. 16 SECTION 2B-107. CHOICE OF LAW. 17 SECTION 2B-108. CONTRACTUAL CHOICE OF FORUM. 18 SECTION 2B-109. BREACH OF CONTRACT; MATERIAL BREACH. 19 SECTION 2B-110. UNCONSCIONABLE CONTRACT OR TERM. 20 SECTION 2B-111. MANIFESTING ASSENT. 21 SECTION 2B-112. OPPORTUNITY TO REVIEW; RETURN. 22 [B. Electronic Contracts: Generally] 23 SECTION 2B-113. LEGAL RECOGNITION OF ELECTRONIC RECORDS AND 24 AUTHENTICATIONS. 25 SECTION 2B-114. COMMERCIAL REASONABLENESS OF ATTRIBUTION PROCEDURE. 26 [SECTION 2B-115. EFFECT OF REQUIRING COMMERCIALLY UNREASONABLE 27 ATTRIBUTION PROCEDURE.] 28 SECTION 2B-116. DETERMINING TO WHICH PERSON AN ELECTRONIC 29 AUTHENTICATION, MESSAGE, RECORD, OR PERFORMANCE IS ATTRIBUTED; 30 RELIANCE LOSSES. 31 SECTION 2B-117. ATTRIBUTION PROCEDURE FOR DETECTION OF CHANGES AND 32 ERRORS; EFFECT OF USE. 33 SECTION 2B-118. ELECTRONIC ERRORS: CONSUMER DEFENSES. 34 SECTION 2B-119. PROOF OF AUTHENTICATION; OPERATIONS OF ELECTRONIC 35 AGENT. 36 SECTION 2B-120. ELECTRONIC MESSAGE: TIMING OF CONTRACT; EFFECTIVENESS 37 OF MESSAGE; ACKNOWLEDGING MESSAGE. 38 PART 2 39 FORMATION AND TERMS 40 [A. General] 41 SECTION 2B-201. FORMAL REQUIREMENTS. 42 SECTION 2B-202. FORMATION IN GENERAL. 43 SECTION 2B-203. OFFER AND ACCEPTANCE. 44 SECTION 2B-203A. ACCEPTANCE WITH VARYING TERMS. 45 SECTION 2B-203B. ACCEPTANCE OF CONDITIONAL OFFERS. 46 SECTION 2B-204. OFFER AND ACCEPTANCE; ELECTRONIC AGENTS. 47 SECTION 2B-205. FIRM OFFERS. 48 SECTION 2B-206. FORMATION: RELEASES OF INFORMATIONAL RIGHTS. 49 SECTION 2B-206A. FORMATION: SUBMISSIONS OF INFORMATION. 50 [B. Terms of Records] 1 SECTION 2B-207. ADOPTING TERMS OF RECORDS. 2 SECTION 2B-208. MASS-MARKET LICENSES. 3 SECTION 2B-209. TERMS OF CONTRACT FORMED BY CONDUCT. 4 PART 3 5 CONSTRUCTION 6 [A. General] 7 SECTION 2B-301. PAROL OR EXTRINSIC EVIDENCE. 8 SECTION 2B-302. COURSE OF PERFORMANCE OR PRACTICAL CONSTRUCTION. 9 SECTION 2B-303. MODIFICATION AND RESCISSION. 10 SECTION 2B-304. CONTINUING CONTRACTUAL TERMS. 11 SECTION 2B-305. PERFORMANCE UNDER OPEN TERMS 12 SECTION 2B-305A. TERMS TO BE SPECIFIED. 13 SECTION 2B-305B. PERFORMANCE TO PARTY’S SATISFACTION. 14 SECTION 2B-306. OUTPUT, REQUIREMENTS, AND EXCLUSIVE DEALING. 15 [B. Interpretation and Monitoring] 16 SECTION 2B-307. INTERPRETATION AND REQUIREMENTS FOR GRANT. 17 SECTION 2B-308. DURATION OF CONTRACT. 18 SECTION 2B-309. LIMITED RIGHTS TO INFORMATION GIVEN FOR STORAGE OR 19 PROCESSING IN RECEIVING PARTY. 20 SECTION 2B-310. ELECTRONIC REGULATION OF PERFORMANCE. 21 SECTION 2B-311. DELIVERY TERMS. 22 PART 4 23 WARRANTIES 24 SECTION 2B-401. WARRANTY AND OBLIGATIONS CONCERNING QUIET ENJOYMENT 25 AND NONINFRINGEMENT. 26 SECTION 2B-402. EXPRESS WARRANTY. 27 SECTION 2B-403. IMPLIED WARRANTY: MERCHANTABILITY OF COMPUTER 28 PROGRAM. 29 SECTION 2B-404. IMPLIED WARRANTY: INFORMATIONAL CONTENT. 30 SECTION 2B-405. IMPLIED WARRANTY: LICENSEE’S PURPOSE; SYSTEM 31 INTEGRATION. 32 SECTION 2B-406. DISCLAIMER OR MODIFICATION OF WARRANTY. 33 SECTION 2B-407. MODIFICATION OF COMPUTER PROGRAM. 34 SECTION 2B-408. CUMULATION AND CONFLICT OF WARRANTIES. 35 SECTION 2B-409. THIRD-PARTY BENEFICIARIES OF WARRANTY. 36 PART 5 37 TRANSFER OF INTEREST AND RIGHTS 38 SECTION 2B-501. OWNERSHIP OF INFORMATIONAL RIGHTS. 39 SECTION 2B-501A. TITLE TO COPIES. 40 SECTION 2B-502. TRANSFER OF CONTRACTUAL INTERESTS. 41 SECTION 2B-504. EFFECT OF TRANSFER OF CONTRACTUAL RIGHTS. 42 SECTION 2B-505. DELEGATION OF PERFORMANCE; SUBCONTRACT. 43 SECTION 2B-506. PRIORITY OF TRANSFER BY LICENSOR. 44 SECTION 2B-507. TRANSFER BY LICENSEE. 45 PART 6 46 PERFORMANCE 47 [A. General ] 48 SECTION 2B-601. PERFORMANCE OF CONTRACT IN GENERAL. 49 SECTION 2B-602. LICENSOR’S OBLIGATIONS TO ENABLE USE. 50 SECTION 2B-603. SUBMISSIONS OF INFORMATION TO THE SATISFACTION OF A 51 PARTY. 4 1 SECTION 2B-604. IMMEDIATELY COMPLETED PERFORMANCES. 2 SECTION 2B-605. WAIVER OF REMEDY FOR BREACH OF CONTRACT. 3 SECTION 2B-606. CURE OF BREACH OF CONTRACT. 4 [B. Performance in Delivery of Copies] 5 SECTION 2B-607. COPY: DELIVERY; TENDER OF DELIVERY. 6 SECTION 2B-607A. COPY: PERFORMANCE RELATED TO DELIVERY; PAYMENT. 7 SECTION 2B-608. COPY: RIGHT TO INSPECT; PAYMENT BEFORE INSPECTION. 8 SECTION 2B-609. COPY: REFUSAL OF DEFECTIVE TENDER. 9 SECTION 2B-610. COPY: INSTALLMENT CONTRACTS; REFUSAL AND DEFAULT. 10 SECTION 2B-611. COPY: CONTRACTS WITH A PREVIOUS VESTED GRANT OF RIGHTS. 11 SECTION 2B-612. COPY: DUTIES UPON RIGHTFUL REFUSAL. 12 SECTION 2B-613. COPY: WHEN ACCEPTANCE OCCURS. 13 SECTION 2B-613A. COPY: EFFECT OF ACCEPTANCE. 14 SECTION 2B-614. COPY: REVOCATION OF ACCEPTANCE. 15 [C. Special Types of Contracts] 16 SECTION 2B-615. ACCESS CONTRACTS. 17 SECTION 2B-616. CORRECTION AND SUPPORT AGREEMENTS. 18 SECTION 2B-617. CONTRACTS INVOLVING PUBLISHERS, DEALERS AND END USERS. 19 [D. Performance Problems] 20 SECTION 2B-620. RIGHT TO ADEQUATE ASSURANCE OF PERFORMANCE. 21 SECTION 2B-621. ANTICIPATORY REPUDIATION. 22 SECTION 2B-622. RETRACTION OF ANTICIPATORY REPUDIATION. 23 [E. Loss and Impossibility] 24 SECTION 2B-623. RISK OF LOSS OF COPY. 25 SECTION 2B-624. EXCUSE BY FAILURE OF PRESUPPOSED CONDITIONS. 26 [F. Termination] 27 SECTION 2B-625. TERMINATION; SURVIVAL OF OBLIGATIONS. 28 SECTION 2B-626. NOTICE OF TERMINATION. 29 SECTION 2B-627. TERMINATION ENFORCEMENT. 30 PART 7 31 REMEDIES 32 [A. General] 33 SECTION 2B-701. REMEDIES IN GENERAL. 34 SECTION 2B-702. CANCELLATION. 35 SECTION 2B-703. CONTRACTUAL MODIFICATION OF REMEDY. 36 SECTION 2B-704. LIQUIDATION OF DAMAGES. 37 SECTION 2B-705. STATUTE OF LIMITATIONS. 38 SECTION 2B-706. REMEDIES FOR FRAUD. 39 [B. Damages] 40 SECTION 2B-707. MEASUREMENT OF DAMAGES IN GENERAL. 41 SECTION 2B-708 LICENSOR’S DAMAGES. 42 SECTION 2B-709. LICENSEE'S DAMAGES. 43 SECTION 2B-710. RECOUPMENT. 44 [C. Performance Remedies] 45 SECTION 2B-711. SPECIFIC PERFORMANCE. 46 SECTION 2B-712. LICENSOR’S RIGHT TO COMPLETE. 47 SECTION 2B-713. LICENSEE’S RIGHT TO CONTINUE USE. 48 SECTION 2B-714. RIGHT TO DISCONTINUE. 49 SECTION 2B-715. RIGHT TO POSSESSION AND TO PREVENT USE. 50 PART 8 51 MISCELLANEOUS PROVISIONS 5 1 SECTION 2B-801. EFFECTIVE DATE. 2 SECTION 2B-802. TRANSACTIONS COVERED. 3 6 1 PART 1 2 GENERAL PROVISIONS 3 [A. Short Title and Definitions] 4 SECTION 2B-101. SHORT TITLE. This article may be cited as Uniform Commercial 5 Code - Software Contracts and Licenses of Information.