It's hard to imagine even the slimiest used-car salesman sidestepping responsibility as completely as Microsoft does in licensing its Web browser. As Microsoft's all-caps warning puts it in the "Supplemental End User License Agreement" for Internet Explorer 5.0, the software comes "AS IS AND WITH ALL FAULTS."
Microsoft disclaims any warranty related to "FITNESS FOR A PARTICULAR PURPOSE, LACK OF VIRUSES, ACCURACY OR COMPLETENESS OF RESPONSES . . . ." In case you didn't get the point: "THE ENTIRE RISK ARISING OUT OF USE OR PERFORMANCE OF THE OPERATING SYSTEM COMPONENTS AND ANY SUPPORT SERVICES REMAINS WITH YOU."
If you thrill in that sort of language, you'll love UCITA - the Uniform Computer Information Transaction Act. Now under consideration in several states, the act is billed as setting a single sweeping standard for contractual obligations in the intangible world of software and information. Proponents say it includes substantial protection for consumers and business customers alike, providing "contract freedom" and "greater legal certainty" in software and information transactions.
But to this layman--and not a few lawyers--the only certainty is that the customer will get the short end of the stick. UCITA protects the industry rather than consumers, letting it impose sneaky deals at the click of an "I Agree" button. "It's an abomination," says David Rice, a law professor at Roger Williams University and a former member of the committee that drafted the act.
Promulgated by the National Conference of Commissioners on Uniform State Laws (NCCUSL), the act has been controversial for its inception. Starting life as "Article 2B," it was initially designed to become a part of the Uniform Commercial Code (UCC), a body of commercial-transactions law meant to be consistent in all 50 states. As usual with UCC revisions, it was developed by members of the NCCUSL and the American Law Institute (ALI). But last year ALI dropped out because of "significant reservations" about the measure "and its overall clarity and coherence."
NCCUSL then brought forth UTICA on its own; it is no longer a part of the UCC but largely identical to earlier drafts. The act covers deals for "computer information" in its broadest sense, ranging from programs to data--except for most products of the entertainment industry, which, in one of several changes serving special interests, got is universe largely exempted from the law.
Big software and information companies strongly support the act. That isn't surprising, given that UTICA "provides only illusory benefits to users," in the view of Stephen Chow, a Boston lawyer who was the lone dissenting member of the act's drafting committee.
Opponents include consumer advocates and state attorneys general who believe the act legitimizes one-sided, take-it-or-leave-it licenses. Some intellectual-property lawyers say UCITA allows contracts that could let vendors make an end-run around traditional practices embodied in copyright law--including reverse engineering, fair use of information and the ability to transfer copies.
Businesses have awakened to the notice that UCITA could be a very nad deal for companies that buy more software and information than they sell. Corporate purchasers complain the new rules stack the deck against them in contract negotiations, including clauses limiting the term of licenses, allowing vendors to restrict their transfer and justifying "electronic self-help." That term is the charming euphemism for a vendor's right to tap into a client's computer systems from afar and disable its software when problems crop up--such as when the client refuses to pay fees for software that doesn't work. "This thing needs to be renamed `The Licensors' Protection Act,' says Randy Roth, purchasing director at Principal Financial Group.
Caterpillar has joined an opposition group, 4cite.org, and urged others to do the same. Caterpillar says UCITA was drafted at meetings "dominated in large part by mass-market software publishers (i.e., Microsoft)." Sure looks that way: It lets software and data firms disclaim virtually every conceivable warranty and avoid other responsibilities by relying on arcane rules unknown to most users. There's even a clause regulating the submission of ideas to companies. Guess who it favors.
The main protection UCITA offers consumers is limited: If you buy a product at retail but dislike the terms, you can refuse it, return the product at the company's expense, get a refund and have your machine restored to its previous state. But once you click "I agree," all bets are off. Amazingly, UCITA lets companies hide outrageous terms until after the sellers get your money--even when you buy on the Web and advance disclosure is easy.
Things get worse in online-access contracts. When America Online unilaterally switched customers to service plans with higher monthly minimums in 1996, states forced AOL to disclose such changes up front and give users a choice to reject the new plan. But UCITA lets terms be changed in the future and requires merely that the method of notification must not be "manifestly unreasonable." UCITA also says that unless otherwise specified in writing, "occasional failure to have [online] access available" isn't a breach of contract. And you thought it was the company's problem to keep its promise of full-time access? Silly you!
UCITA may also sanction outrageous contract provisions that muzzle criticism. Sure, such over-the-top clauses can be found to be unconscionable, but that recourse has been used only a dozen or so times in the past 50 years.
In Virginia, AOL's home state, both houses of the legislature recently passed UCITA, effective in July 2001. UCITA is under active consideration in Maryland and on a slower track in several other states; Illinois tabled it earlier this year. But passage in any one state may enable UCITA to become the rule of law of the datasphere; licenses can declare that they must be interpreted by the law of that particular state.
To an industry that is hardly languishing and where litigation is rather rare, does this law bring the clarity and coherence it promises? That prospect is "laughable," says Jean Bracher, a law professor at the University of Arizona. "It's a disaster, the way this thing is drafted." But she notes: "This will be great--for lawyers."