The ALI's principles of software contracting: some comments & clarifications.

• Author: O'Rourke, Maureen A.
• Position: American Law Institute

Cite as 12 J. High Tech. L. 159 (2011)

1. Introduction

   When I joined Boston University School of Law's faculty in 1993, there seemed to be general agreement among practitioners and academics alike that the time was ripe for some sort of uniform law to address transactions involving software. The debate was over the form that law should take rather than whether it should exist at all. More specifically, interested parties were discussing an important structural question--whether software contracts might best be dealt with in the Uniform Commercial Code (UCC) under a "hub and spoke" approach or as a standalone Article. Eventually, drafters focused on a standalone Article, and the National Conference of Commissioners on Uniform State Laws (NCCUSL) and American Law Institute (ALI) worked for a number of years on a new Article 2B that would be incorporated into the UCC. When the joint effort was abandoned, NCCUSL continued the work and promulgated the eventual end product as the Uniform Computer Information Transactions Act (UCITA).

   Debates continue today about whether or not UCITA was successful. One might answer that question through an empirical study of the number of software agreements that adopt UCITA as the governing law and the importance and nature of the software licensed under such agreements. We did not undertake such an empirical study. We did, however, find much to admire in UCITA and drew on it in our own work.

   While I cannot speak for the ALI, I believe that the organization felt that the area was ripe for a project which does not restate the law, but rather tries to bring some order to the case law and recommend best practices without hindering the law's adaptability to future developments. In ALI parlance, such a project is conducted as a "Principles" project. Like a Restatement, a Principles project is drafted by "Reporters" who receive input from a group of advisors and ALI members. Advisors are not required to be ALI members, and represent a variety of constituencies. We met over a 5-year period--it did not take that long, however, to discover that serious disagreements existed, and, in some cases, we would need to make hard choices that would likely satisfy very few. In other words, our experience was not unlike that of UCITA's drafters and the criticisms we received often recalled the debates over UCITA.

   I will not attempt here to mount a defense of either the advisability of the project in the first place (1) or to justify all of its provisions. Rather, I am writing here for two reasons--first, to express my gratitude to Suffolk University Law School for conducting the day-long program on the Principles; and second, to focus on just three areas that arose in our discussion during that program. For those who are interested, I would recommend reading the Principles in their entirety and drawing your own conclusions. (2)

2. Some Comments & Clarifications

   1. Contract Formation--Standard Forms

      At the conference, panelists objected to our provisions addressing standard form contracts. They read the relevant sections to require electronic standard forms to be presented as clickwrap agreements. This is not, however, the Principles' approach.

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