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Uniform Computer Information Transactions Act (UCITA)

Principal Financial Group and Prudential Insurance Company of America want to alert you to UCITA, which sets forth rules governing software licenses. Adopted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in July, 1999 despite opposition from 24 attorneys general, numerous consumer groups, many large and small licensees and from the American Law Institute (ALI), its co-sponsor of the Uniform Commercial Code. UCITA is expected to be introduced in many states in the coming months. In fact, its proponents have already arranged for pre-introduction meetings/hearings in New Jersey and Virginia.

UCITA would:

• validate shrink wrapped (standard, take-it-or-leave-it) licenses

• allow vendor to threaten disruption of licensees critical systems through electronic "self-help" if its demands were not met; whether vendor may waive right to self-help is questionable

• impose new uncertainty regarding the duration of licensees right to use licensed software

• change commercial practice through new default rules as to number
• of permitted users under license

• place unreasonable burden on licensee to discover defects during an evaluation (thereby subjecting user to licensors contract terms)

• limit vendors implied warranty of non-infringement to US usage, even for worldwide licenses

• restrict "perfect tender" rule to narrowly defined "mass market" transactions

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This page was last updated: December 18, 2000