New Laws for the Digital Age.

• Author: Bourquard, Jo Anne

With the rapid growth of electronic commerce, the states need a legal framework that will provide clear, consistent rules for the new world of e-business.

Two new uniform acts dealing with electronic information and transactions were recently approved by the National conference of commissioners on Uniform State Laws and are ready for consideration by the states.

One--the Uniform computer Information Transactions Act (UCITA--is based on the need for rules to govern the sale of computer information. Over the past few decades, computer software has been sold with a "shrink-wrap" or "click-wrap" license, which the consumer is able to read only after purchase. Unlike the sale of a tangible good, such as a car, a license agreement does not transfer title to the software, instead it "buys" a limited use of the product.

In essence, the act establishes rules for creating, modifying, transferring or licensing computer information. This includes the purchase of computer software, as well as other information such as computer games, on-line databases, multimedia products and the distribution of information on the Internet.

UCITA was originally drafted as part of the Uniform Commercial Code (UCC). In the spring of 1999, amid much controversy, the commissioners redrafted it as a freestanding act.

John McCabe, legislative director of the National Conference of Commissioners on Uniform State Laws, says it became a lightning rod because it was the first uniform law governing licensing contracts. Software is an intangible product, not a tangible good like those governed by the UCC. Unlike the commercial code rules, which had a history in common law before they became part of the uniform code, the UCITA explores new territory. The uniform law commissioners adopted it last summer.

Critics charge that the act fails to provide sufficient protection for consumers because they don't get a chance to look at the license and can't negotiate terms for use of the product before they spend their money. And they fear computer information providers may enforce unreasonable terms because they contend UCITA provides limited rights and warranties for consumers.

"Consumers would be much better served by certain rules that straightforwardly protect their reasonable interests and expectations, explains Jean Braucher, University of Arizona law professor. "Far from creating greater legal certainty, UCITA would require decades of litigation to sort out its meaning."

Supporters of...