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UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT*

Drafted by the

NATIONAL CONFERENCE OF COMMISSIONERS

ON UNIFORM STATE LAWS

and by it

APPROVED AND RECOMMENDED FOR ENACTMENT

IN ALL THE STATES

at its

ANNUAL CONFERENCE

MEETING IN ITS ONE-HUNDRED-AND-EIGHTH YEAR

IN DENVER, COLORADO

JULY 23 - 30, 1999

WITHOUT PREFATORY NOTE AND COMMENTS

Copyright © 1999

By

NATIONAL CONFERENCE OF COMMISSIONERS

ON UNIFORM STATE LAWS

August 4, 1999

CARLYLE C. RING, JR., 1401 H. Street, N.W., Suite 500, Washington, DC 20005, Chair

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

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

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

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

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

SECTION 101. SHORT TITLE. This [Act] may be cited as Uniform Computer Information Transactions Act.

SECTION 102. DEFINITIONS.

(a) In this [Act]:

(1) "Access contract" means a contract to obtain electronically access to, or information from, an information processing system of another person, or the equivalent of such access.

(2) "Access material" means any information or material, such as a document, address, or access code, necessary to obtain authorized access to information or control or possession of a copy.

(3) "Aggrieved party" means a party entitled to a remedy for breach of contract.

(4) "Agreement" means the bargain of the parties in fact as found in their language or by implication from other circumstances including course of performance, course of dealing, and usage of trade as provided in this [Act]. Whether an agreement has legal consequences is determined by this [Act].

(5) "Attribution procedure" means a procedure established by law, administrative rule, or agreement, or a procedure otherwise adopted by the parties, to verify that an electronic event is that of a specific person or to detect changes or errors in the information. The term includes a procedure that requires the use of algorithms or other codes, identifying words or numbers, encryption, callback or other acknowledgment, or any other procedures that are reasonable under the circumstances.

(6) "Authenticate" means to sign, or otherwise to execute or adopt an electronic symbol, sound, or process attached to, included in, or logically associated or linked with, a record or term, with the intent to sign the record or a record to which it refers.

(7) "Automated transaction" means a contract formed or performed in whole or in part by electronic means or by electronic messages in which the electronic actions or messages of one or both parties which establish the contract are not reviewed in the ordinary course by an individual before the action or response.

(8) "Burden of establishing", with respect to a fact, means the burden of persuading a trier of fact that the existence of the fact is more probable than its non-existence.

(9) "Cancellation" means an act by a party that puts an end to the contract for breach by another.

(10) "Computer" means an electronic device that accepts information in digital or similar form and manipulates it for a specific result based on a sequence of instructions.

(11) "Computer information" means information in electronic form that is obtained from or through the use of a computer, or that is in digital or similar form capable of being processed by a computer. The term includes a copy of information in that form and any documentation or packaging associated with the copy.

(12) "Computer information transaction" means an agreement and the performance of that agreement to create, modify, transfer, or license computer information or informational rights in computer information. The term includes a support agreement to the extent covered in Section 612. A transaction is not included merely because the parties' agreement includes that their communications about the transaction will be in the form of computer information.

(13) "Computer program" means a set of statements or instructions to be used directly or indirectly in a computer to bring about a certain result. The term does not include separately identifiable informational content.

(14) "Consequential damages" resulting from breach of contract include (i) any loss resulting from general or particular requirements and needs of which the other party at the time of contracting had reason to know and which could not reasonably be prevented, and (ii) injury to person or damage to other property proximately resulting from any breach of warranty. The term does not include direct or incidental damages.

(15) "Conspicuous", with reference to a term, means so written, displayed, or otherwise presented that a reasonable person against which it is to operate ought to have noticed it. A term in an electronic record intended to evoke a response by an electronic agent is conspicuous if it is presented in a form that would enable a reasonably configured electronic agent to take it into account or react without review of the record by an individual. Conspicuous terms include the following:

(A) with respect to a person:

(i) a heading in capitals in a size equal to or greater than, or in contrasting type, font, or color to, the surrounding text;

(ii) language in the body of a record or display in larger or other contrasting type, font, or color or set off from the surrounding text by symbols or other marks that call attention to the language; and

(iii) a term prominently referenced in an electronic record or display which is readily accessible and reviewable from the record or display; and

(B) with respect to a person or an electronic agent, a term or reference to a term that is so placed in a record or display that the person or electronic agent can not proceed without taking some action with respect to the term or reference.

(16) "Consumer" means an individual who is a licensee of information or informational rights that the individual at the time of contracting intended to be used primarily for personal, family, or household purposes. The term does not include an individual who is a licensee primarily for professional, or commercial purposes, including agriculture, business management, and investment management other than management of the individual's personal or family investments.

(17) "Consumer contract" means a contract between a merchant licensor and a consumer.

(18) "Contract" means the total legal obligation which results from the parties' agreement as affected by this [Act] and any other applicable rules of law.

(19) "Contract fee" means the price, fee, rent, or royalty payable in a contract under this [Act].

(20) "Contractual use restriction" means an enforceable restriction created by contract which concerns the use or disclosure of, or access to licensed information or informational rights, including a limitation on scope or manner of use.

(21) "Copy" means the medium on which information is fixed on a temporary or permanent basis and from which it can be perceived, reproduced, used, or communicated, either directly or with the aid of a machine or device.

(22) "Course of dealing" means a sequence of previous conduct between the parties to a particular transaction which establishes a common basis of understanding or interpreting their expressions and other conduct.

(23) "Course of performance" means a sequence of conduct in a contract that involves repeated occasions for performance if a party, with knowledge of the nature of the performance and opportunity to object to it, accepts or acquiesces in the repeated performance without objection.

(24) "Court" includes an arbitration or other dispute-resolution forum if the parties have agreed to use of that forum or its use is required by law.

(25) "Delivery," with respect to a copy, means the voluntary physical or electronic transfer of possession or control.

(26) "Direct damages" means compensation for losses measured by Section 808(b)(1) or 809(a)(1). The term does not include consequential or incidental damages.

(27) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, or electromagnetic, or similar capabilities.

(28) "Electronic agent" means a computer program, or electronic or other automated means used independently to initiate an action or respond to electronic messages or performances without review or action by an individual at the time of the action, response or performance.

(29) "Electronic event" means an electronic authentication, display, message, record, or performance.

(30) "Electronic message" means a record or display stored, generated, or transmitted by electronic means for the purposes of communication to another person or electronic agent.

(31) "Financial accommodation contract" means an agreement under which a person extends a financial accommodation to a licensee which agreement does not create a security interest in a transaction that is subject to [Article 9 of the Uniform Commercial Code]. The agreement may be in any form, including a license, lease, or software lease.

(32) "Financial services transaction" means a contract or a transaction that provides access to, use, transfer, clearance, settlement, or processing of:

(A) deposits, loans, funds, or monetary value represented in electronic form and stored or capable of storage electronically and retrievable and transferable electronically, or other right to payment to or from a person;

(B) an instrument or other item;

(C) a payment order, credit card transaction, debit card transaction, or a funds transfer, automated clearing house transfer, or similar wholesale or retail transfer of funds;

(D) a letter of credit, document of title, financial asset, investment property, or similar asset held in a fiduciary or agency capacity; or

(E) related identifying, verifying, access-enabling, authorizing, or monitoring information.

(33) "Financier" means a person that provides a financial accommodation to a licensee under a financial accommodation contract and either (i) becomes a licensee for the purpose of transferring or sublicensing the license to the party to which the financial accommodation is provided or (ii) obtains a contractual right under the financial accommodation contract to preclude the licensee's use of the information or informational rights under a license in the event of breach of the financial accommodation contract. The term does not include a person that selects, creates, or supplies the information that is the subject of the license, owns the informational rights in the information, or provides support, modifications, or maintenance for the information.

(34) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing.

(35) "Incidental damages" resulting from breach of contract:

(A) means compensation for any commercially reasonable charges, expenses, or commissions reasonably incurred by an aggrieved party with respect to:

(i) inspection, receipt, transmission, transportation, care, or custody of identified copies or information that are the subject of the breach;

(ii) stopping delivery, shipment, or transmission;

(iii) effecting cover, return, or retransfer of copies or information after the breach of contract;

(iv) reasonable efforts after the breach otherwise to minimize or avoid loss resulting from the breach; and

(v) matters otherwise incident to the breach; and

(B) does not include consequential or direct damages.

(36) "Individual" means a human being.

(37) "Information" means data, text, images, sounds, mask works, or computer program, including collections or compilations thereof.

(38) "Information processing system" means an electronic system for creating, generating, sending, receiving, storing, displaying, or processing information.

(39) "Informational content" means information that is intended to be communicated to or perceived by an individual in the ordinary use of the information, or the equivalent of that information. The term does not include computer instructions that control the interaction of a computer program with other computer programs or with a machine or device.

(40) "Informational rights" include all rights in information created under laws governing patents, copyrights, mask works, trade secrets, trademarks, publicity rights, or any other law that gives a person, independently of contract, a right to control or preclude another person's use of or access to the information on the basis of the rights holder's interest in the information.

(41) "Knowledge", with respect to a fact, means that a person has actual knowledge of the fact.

(42) "License" means a contract that authorizes access to, use of, distribution, display, performance, modification, or reproduction of information, or use of informational rights, and expressly limits the contractual rights, permissions, or uses granted, expressly prohibits some uses, or expressly grants less than all rights in the information. A contract may be a license whether or not the transferee has title to a licensed copy. The term includes an access contract and a consignment of a copy. The term does not include a reservation or creation of a security interest.

(43) "Licensee" means a transferee in a license or other agreement under this [Act]. A licensor is not a licensee with respect to rights reserved to it under the agreement.

(44) "Licensor" means a transferor in a license or other agreement under this [Act]. Between a provider of access in an access contract and its customer, the provider is the licensor. Between the provider of access and a provider of the informational content to be accessed, the provider of content is the licensor. In an exchange of information or informational rights, each party is a licensor with respect to the information, informational rights, or access it provides.

(45) "Mass-market license" means a standard form that is prepared for and used in a mass-market transaction.

(46) "Mass-market transaction" means a transaction under this [Act] that is:

(A) a consumer contract; or

(B) any other transaction with an end-user licensee if:

(i) the transaction is for information or informational rights directed to the general public as a whole including consumers, under substantially the same terms for the same information;

(ii) the licensee acquires the information or rights in a retail transaction under terms and in a quantity consistent with an ordinary transaction in a retail market; and

(iii) the transaction is not:

(I) a contract for redistribution or for public performance or public display of a copyrighted work;

(II) a transaction in which the information is customized or otherwise specially prepared by the licensor for the licensee other than minor customization using a capability of the information intended for that purpose;

(III) a site license; or

(IV) an access contract.

(47) "Merchant" means a person that deals in information or informational rights of the kind or that otherwise by the person's occupation holds itself out as having knowledge or skill peculiar to the practices or information involved in the transaction, or a person to which such knowledge or skill may be attributed by the person's employment of an agent or broker or other intermediary that by its occupation holds itself out as having such knowledge or skill.

(48) "Nonexclusive license" means a license that does not preclude the licensor from transferring to other licensees the same information, informational rights, or contractual rights within the same scope. The term includes a consignment of a copy.

(49) "Notice" of a fact means that the person has actual knowledge of it, has received notice or notification of it, from all the facts and circumstances known to it, has reason to know that the fact exists.

(50) "Notify", or "give notice", means to take such steps as may be reasonably required to inform the other person in the ordinary course whether or not the other person actually comes to know of it.

(51) "Party", as distinguished from "third party", means a person that has engaged in a transaction or made an agreement within this [Act].

(52) "Person" includes an individual or an organization.

(53) "Present value" means the amount, as of a date certain, of one or more sums payable in the future or the value of one or more performances due in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties in their agreement unless that rate was manifestly unreasonable when the transaction was entered into. Otherwise, the discount is determined by a commercially reasonable rate that takes into account the circumstances of each case when the agreement was entered into.

(54) "Published informational content" means informational content prepared for or made available to recipients generally, or to a class of recipients, in substantially the same form. The term does not include informational content that is:

(A) customized for a particular recipient by an individual or group of individuals acting as or on behalf of the licensor, using judgment or expertise; or

(B) provided in a special relationship of reliance between the provider and the recipient.

(55) "Reasonable time" means any time which is not manifestly unreasonable. What is a reasonable time for taking an act depends on the nature, purpose and circumstances of such act.

(56) "Reason to know", with respect to a fact, means that:

(A) a person has knowledge of the fact; or

(B) from all the facts and circumstances known to the person without investigation, the person should be aware that the fact exists.

(57) "Receive" means:

(A) with respect to a copy, to take delivery; or

(B) with respect to a notice:

(i) to come to a person's attention; or

(ii) to be delivered to and available at a location or system designated by agreement for that purpose or, in the absence of an agreed location:

(I) to be delivered at the person's residence, or the person's place of business through which the contract was made, or at any other place held out by the person as a place for receipt of communications of the kind; or

(II) in the case of an electronic notification, to come into existence in an information processing system in a form capable of being processed by or perceived from a system of that type by a recipient, if the recipient uses, or otherwise has designated or holds out that system or address as a place for receipt of notices of the kind and the sender does not know that the notice cannot be accessed from the particular system of the recipient.

(58) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(59) "Release" means an agreement not to object to, or exercise any remedies to limit, the use of information or informational rights, if the agreement requires no affirmative act by the party giving the release to enable or support the other party's use of the information or informational rights. The term includes a waiver of informational rights.

(60) "Return", with respect to information to which a rejected record applies, means:

(A) in the case of a licensee that rejects a record:

(i) with respect to a single information product transferred for a single contract fee, reimbursement of any contract fee paid from the person to which it was paid or from another person that may offer to reimburse that fee, and a right to stop payment of the contract fee, on proof of purchase and return of the information and all copies within a reasonable time after delivery to the licensee; and

(ii) with respect to an information product provided as part of multiple information products integrated into a bundled whole but retaining their separate identity and transferred for one contract fee:

(I) if the record is rejected before or during the initial use of the bundled product and that product is returned without further use and along with all other information products bundled along with it, reimbursement of the aggregate contract fee for all bundled information products, on proof of purchase and return of all the bundled products and all copies within a reasonable time after delivery; or

(II) if a separate fee was identified by the licensor as charged to the licensee for a particular bundled information product, reimbursement of any separate contract fee paid for the separate information to which the rejected record applies, on proof of purchase and return of that information and all copies within a reasonable time after delivery; and

(B) in the case of a licensor that rejects a record proposed by the licensee, a right to receive redelivery of the information from the licensee, to stop delivery or access to the licensee, and reimbursement from the licensee of amounts paid by the licensor with respect to the rejected record along with reimbursement to the licensee of fees that it paid with respect to the rejected record.

(61) "Scope", with respect to a license, means terms defining:

(A) the licensed copies, information, or informational rights involved;

(B) the use or access authorized, prohibited, or controlled;

(C) the geographic area, market, or location; and

(D) the duration of the license.

(62) "Seasonable" with respect to an act, means taken within the time agreed or, if no time is agreed, at or within a reasonable time.

(63) "Send" means, with any costs provided for and properly addressed or directed as reasonable under the circumstances or as otherwise agreed, to (i) deposit in the mail or with a commercially reasonable carrier, (ii) deliver for transmission to or re-creation in another location or system, or (iii) take the steps necessary to initiate transmission to or re-creation in another location or system. In addition, with respect to an electronic message, the term means to initiate operations that in the ordinary course will cause the record to come into existence in an information processing system in a form capable of being processed by or perceived from a system of that type by the recipient, if the recipient uses or otherwise has designated or held out that system or address as a place for the receipt of communications of the kind. Receipt within the time in which it would have arrived if properly sent has the effect of a proper sending.

(64) "Software" means a computer program, informational content included in the program, and any supporting information provided by the licensor.

(65) "Software lease" means a lease of a copy of software, whether or not the lease is a lease under [Article 2A of the Uniform Commercial Code].

(66) "Standard form" means a record or a group of related records containing terms prepared for repeated use in transactions and so used in a transaction in which there was no negotiation by individuals except to set the price, quantity, method of payment, selection among standard options, or time or method of delivery.

(67) "Term", with respect to an agreement or contract, means that portion of an agreement which relates to a particular matter.

(68) "Termination" means the ending of a contract by either party pursuant to a power created by agreement or law otherwise than for its breach.

(69) "Transfer":

(A) with respect to a contractual interest, includes an assignment of the contract, but does not include an agreement to perform a contractual obligation or exercise contractual rights through a delegate or a sublicensee; and

(B) with respect to computer information, includes a sale or lease of a copy as well as an assignment of informational rights in computer information.

(70) "Usage of trade" means any practice or method of dealing that has such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question.

(b) The following definitions in [the Uniform Commercial Code] apply to this [Act]:

(1) "Document of title" [Section 1-201].

(2) "Financial asset" [Section 8-102(a)(9)].

(3) "Funds transfer" [Section 4A-104] (as applied to credit orders).

(4) "Identification" to the contract [Section 2-501].

(5) "Instrument" [Sections 9-105(i)] (1995 Official Draft); [9-102(a)(47)] (1998 Approved Draft).

(6) "Item" [Section 4-104].

(7) "Investment property" [Section 9-115(f)] (1995 Official Draft); [9-102(a)(49)] (1998 Approved Draft).

(8) "Lease" [Section 2A-102].

(9) "Letter of credit" [Section 5-102].

(10) "Negotiable instrument" [Section 3-104].

(11) "Organization" [Section 1-201].

(12) "Payment order" [Section 4A-103] (as applied to credit orders).

(13) "Purchase" [Section 1-201].

(14) "Purchaser" [Section 1-201].

(15) "Sale" [Section 2-106].

(16) "Security interest" [Section 1-201].

SECTION 103. SCOPE; EXCLUSIONS; AGREEMENT THAT ACT GOVERNS.

(a) This [Act] applies to computer information transactions.

(b) If a computer information transaction includes other subject matter, except as provided in subsections (c), (d), and (e), the following rules apply:

(1) If the computer information is the primary subject matter, this [Act] applies to the entire transaction.

(2) If the computer information is not the primary subject matter, this [Act] applies only to the part of the transaction pertaining to the computer information.

(c) The following rules apply between this [Act] and [articles of the Uniform Commercial Code]:

(1) If a transaction involves computer information and goods, this [Act] applies to the computer information.

(2) Notwithstanding subsection (1), if a copy of a computer program is contained in and sold or leased as part of other goods, this [Act] applies to the program and the copy only if:

(A) the other goods are a computer or computer peripheral; or

(B) giving the buyer or lessee of the goods access to or use of the program is ordinarily a material purpose of transactions in goods of the type.

(3) To the extent of a conflict between this [Act] and [Article 9], [Article 9] governs.

(4) This [Act] does not apply to subject matter within the scope of [Article 3, 4, 4A, 5, 6, 7, or 8 of the Uniform Commercial Code].

(d) This [Act] does not apply to:

(1) a financial services transaction;

(2) a contract to create, perform or perform in, include information in, acquire, use, distribute, modify, reproduce, have access to, adapt, make available, transmit, license, or display:

(A) audio or visual programming that is provided by broadcast, satellite, or cable as defined or used in the Federal Communications Act and related regulations as they existed on July 1, 1999, or by similar methods of delivering the programming; or

(B) a motion picture, sound recording, musical work, or phonorecord as defined or used in Title 17 of the United States Code as of July 1, 1999, or an enhanced sound recording. "Enhanced sound recording" means a separately identifiable product or service the dominant character of which consists of recorded sounds, but which includes (i) statements or instructions whose purpose is to allow or control the perception, reproduction, or communication of those sounds, or (ii) other information, so long as recorded sounds constitute the dominant character of the product or service despite the inclusion of such other information.

(3) a compulsory license; or

(4) a contract of employment of an individual other than as an independent contractor; or

(5) a contract which does not require that the information be furnished as computer information or in which the form of the information as computer information is otherwise de minimis with respect to the primary subject matter of the transaction.

(e) Except as otherwise provided in subsections (c)(2-4), if a material part of the subject matter of a transaction includes computer information that is within this [Act] or subject matter excluded under subsection (d)(1) or (d)(2), the parties may agree that this [Act], including contract formation rules, governs the transaction in whole or in part or that other law governs the transaction and this [Act] does not apply; however, any agreement to do so is subject to the following rules:

(1) An agreement that this [Act] governs a transaction does not alter an otherwise applicable rule or procedure that may not be varied by agreement or that may be varied only in a manner specified by the otherwise applicable rule or procedure and, in a mass-market transaction, does not alter:

(A) the applicability of a consumer protection statute [or administrative rule]; and

(B) law applicable to a tangible copy of information in print form.

(2) An agreement that this [Act] does not govern a transaction does not alter the applicability of Section 217 or 816 and, in a mass-market transaction, does not alter the applicability of unconscionability, fundamental public policy, or good faith under this [Act].

(3) In a mass-market transaction any term providing that this [Act] does or does not govern must be conspicuous.

SECTION 104. SUPPLEMENTAL PRINCIPLES: COMMERCIAL PRACTICE; VARIATION BY AGREEMENT; GOOD FAITH; DECISION FOR COURT.

(a) Unless displaced by this [Act], principles of law and equity, including the law merchant and the common law of this State relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, other validating or invalidating cause, shall supplement the provisions of this [Act]. Among the laws supplementing and not displaced by this [Act] are trade secret laws and unfair competition laws.

(b) Any usage of trade in the business, trade, or industry in which the parties are engaged or of which they are or should be aware, along with any course of dealing or course of performance between parties are relevant to determining the existence or meaning of an agreement.

(c) The effect of any provision of this [Act], including an allocation of risk or imposition of a burden, may be varied by agreement of the parties. However, the following rules apply:

(1) Obligations of good faith, diligence, reasonableness and care established by this [Act] may not be disclaimed by agreement, but the parties may by agreement determine the standards by which the performance of the obligation is to be measured if the standards are not manifestly unreasonable.

(2) Unconscionability under Section 111 and fundamental public policy as stated in Section 105(b) may not be varied by agreement.

(3) Limitations on enforceability of, or agreement to, a contract, term, or right expressly stated in the sections listed in the following subparagraphs may not be varied by agreement except to the extent provided in each section:

(A) limitations on agreed choice of law in Section 109(a);

(B) limitations on agreed choice of forum in Section 110;

(C) limitations in Section 201;

(D) limitations on a mass-market license in Section 211;

(E) requirements and return rights for manifest assent and opportunity to review in Section 112;

(F) the consumer defense arising from an electronic error in Section 217;

(G) requirements for an enforceable term in Sections 303(b), 307(g), 406(b)(c), and 804(a);

(H) restrictions on altering the period of limitations in Section 805(a) and (b).

(I) limitations on self-help repossession in Sections 815(b) and 816.

(d) Every contract or duty within this [Act] imposes an obligation of good faith in its performance or enforcement.

(e) Whether a term is conspicuous or is unenforceable under Section 105(a) or (b) or 211(a) is a question to be determined by the court.

SECTION 105. RELATION TO FEDERAL LAW; FUNDAMENTAL PUBLIC POLICY; TRANSACTIONS SUBJECT TO OTHER STATE LAW.

(a) A provision of this [Act] which is preempted by federal law is unenforceable to the extent of the preemption.

(b) If a term of a contract violates a fundamental public policy, the court may refuse to enforce the contract, may enforce the remainder of the contract without the impermissible term, or so limit the application of the impermissible term as to avoid any result contrary to public policy, in each case, to the extent that the interest in enforcement is clearly outweighed by a public policy against enforcement of the term.

(c) Except as otherwise provided in subsection (d), if this [Act] conflicts with a consumer protection statute [or administrative rule], the conflicting statute [or rule] governs.

(d) If the law of this State in effect on the effective date of this [Act] applies to a transaction governed by this [Act], the following rules apply:

(1) A requirement that a term, waiver, notice, or disclaimer be in a writing is satisfied by a record.

(2) A requirement that a record or writing or a term be signed is satisfied by an authentication.

(3) A requirement that a term be conspicuous or the like is satisfied by a term that is conspicuous in accordance with this [Act].

(4) A requirement of consent or agreement to a term is satisfied by an action that manifests assent to a term in accordance with this [Act].

SECTION 106. RULES OF CONSTRUCTION. In applying this [Act], the following rules of construction apply:

(1) This [Act] shall be liberally construed and applied to promote its underlying purposes and policies, which underlying purposes and policies are to:

(A) support and facilitate the realization of the full potential of computer information transactions;

(B) clarify the law governing computer information transactions;

(C) enable expanding commercial practice in computer information transactions by commercial usage and agreement of the parties; and

(D) make the law uniform among the various jurisdictions.

(2) Except as otherwise provided in Section 104(c)(3), the use of mandatory language or the absence of a phrase such as "unless otherwise agreed" in a provision of this [Act] does not preclude the parties from varying the effect of the provision by agreement.

(3) The fact that a provision of this [Act] imposes a condition for a result does not by itself mean that the absence of that condition yields a different result.

(4) To be enforceable, a term need not be conspicuous, negotiated, or expressly assented or agreed to, unless this [Act] expressly so requires.

(5) Words in the singular include the plural, and in the plural include the singular.

SECTION 107. LEGAL RECOGNITION OF ELECTRONIC RECORD AND AUTHENTICATION; USE OF ELECTRONIC AGENTS.

(a) A record or authentication may not be denied legal effect or enforceability solely because it is in electronic form.

(b) This [Act] does not require that a record or an authentication be generated, stored, sent, received, or otherwise processed by electronic means or in electronic form.

(c) In any transaction, a person may establish requirements regarding the type of authentication or record acceptable to it.

(d) A person that uses its own electronic agent for authentication, performance, or agreement, including manifestation of assent, is bound by the operations of the electronic agent, even if no individual was aware of or reviewed the agent's operations or the results of the operations.

SECTION 108. PROOF AND EFFECT OF AUTHENTICATION.

(a) Authentication may be proven in any manner, including showing that a party made use of information or access that could have been available only if it engaged in conduct or operations that authenticated the record or term.

(b) Subject to Section 215, compliance with a commercially reasonable attribution procedure for authenticating a record authenticates the record as a matter of law.

SECTION 109. CHOICE OF LAW.

(a) The parties in their agreement may choose the applicable law. However, the choice is not enforceable in a consumer contract to the extent it would vary a rule that may not be varied by agreement under the law of the jurisdiction whose law would apply under subsections (b) and (c) in the absence of the agreement.

(b) In the absence of an enforceable choice-of-law term, the following rules apply:

(1) An access contract or a contract providing for electronic delivery of a copy is governed by the law of the jurisdiction in which the licensor is located when the agreement is made.

(2) A consumer contract that requires delivery of a copy on a physical medium is governed by the law of the jurisdiction in which the copy is or should have been delivered to the consumer.

(3) In all other cases, the contract is governed by the law of the jurisdiction having the most significant relationship to the transaction.

(c) In cases governed by subsection (b), if the jurisdiction whose law governs under that subsection is outside the United States, the law of that jurisdiction governs only if it provides substantially similar protections and rights to a party not located in that jurisdiction as are provided under this [Act]. Otherwise, the law of the jurisdiction in the United States which has the most significant relationship to the transaction governs.

(d) For purposes of this section, a party is located at its place of business if it has one place of business, at its chief executive office if it has more than one place of business, or at its place of incorporation or primary registration if it does not have a physical place of business. Otherwise, a party is located at its primary residence.

SECTION 110. CONTRACTUAL CHOICE OF FORUM.

(a) The parties in their agreement may choose an exclusive judicial forum unless the choice is unreasonable and unjust.

(b) A choice-of-forum term is not exclusive unless the agreement expressly so provides.

SECTION 111. UNCONSCIONABLE CONTRACT OR TERM.

(a) If a court as a matter of law finds the contract or any term thereof to have been unconscionable at the time it was made, the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable term, or it may so limit the application of any unconscionable term as to avoid any unconscionable result.

(b) If it is claimed or appears to the court that a contract or any term thereof may be unconscionable, the parties must be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination.

SECTION 112. MANIFESTING ASSENT; OPPORTUNITY TO REVIEW.

(a) A person manifests assent to a record or term if the person, acting with knowledge of, or after having an opportunity to review the record or term or a copy of it:

(1) authenticates the record or term to adopt or accept it; or

(2) intentionally engages in conduct or makes statements with reason to know that the other party or its electronic agent may infer from the conduct or statement that the person assents to the record or term.

(b) An electronic agent manifests assent to a record or term if, after having an opportunity to review, the electronic agent:

(1) authenticates the record; or

(2) engages in operations that the circumstances indicate constitute acceptance.

(c) If this [Act] or other law requires assent to a specific term, a manifestation of assent must relate specifically to the term.

(d) Conduct or operations manifesting assent may be shown in any manner, including a showing that a person or an electronic agent obtained or used the information or informational rights and that a procedure existed by which a person or an electronic agent must have engaged in the conduct or operations in order to do so. Proof of compliance with subsection (a)(2) is sufficient if there is conduct that assents and subsequent conduct that electronically reaffirms assent.

(e) With respect to an opportunity to review, the following rules apply:

(1) A person has an opportunity to review a record or term only if the record or term is made available in a manner that ought to call it to the attention of a reasonable person and permit review.

(2) An electronic agent has an opportunity to review a record or term only if the record or term is made available in manner that would enable a reasonably configured electronic agent to react to the record or term.

(3) If a record or term is available for review only after a person becomes obligated to pay or begins its performance, the person has an opportunity to review only if:

(A) it had a right to a return if it rejected the record;

(B) the record proposed a modification of contract;

(C) the record provided particulars of performance under Section 305; or

(D) in a case not involving a mass-market license, the parties at the time of contracting had reason to know that a record or terms would be presented after performance, use or access to the information began, unless the performance was mere delivery or a copy.

(4) The right to a return under paragraph (3) may arise by law or by agreement.

(f) The provisions of this section may be modified by an agreement setting out standards applicable to future transactions between the parties.

SECTION 201. FORMAL REQUIREMENTS.

(a) Except as otherwise provided in this section, a contract requiring payment of $5,000 or more is not enforceable by way of action or defense unless:

(1) the party against which enforcement is sought authenticated a record sufficient to indicate that a contract has been formed and which reasonably identifies the copy or subject matter to which the contract refers; or

(2) the contract is a license for an agreed duration of one year or less or which can be terminated at will by the party against which the contract is asserted.

(b) A record is sufficient under subsection (a) even if it omits or incorrectly states a term, but the contract is not enforceable beyond the number of copies or subject matter shown in the record.

(c) A contract that does not satisfy the requirements of subsection (a) but which is valid and enforceable in all other respects, is enforceable if:

(1) a performance was tendered or the information was made available by one party and the tender was accepted or accessed by the other; or

(2) the party against which enforcement is sought admits in court, by pleading, testimony, or otherwise under oath, facts sufficient to indicate a contract has been made, but the agreement is not enforceable under this paragraph beyond the number of copies or the subject matter admitted.

(d) Between merchants, if, within a reasonable time, a record in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, the record satisfies subsection (a) against the party receiving it unless notice of objection to its contents is given in a record within 10 days after the confirming record is received.

(e) An agreement that the requirements of this section need not be satisfied as to future transactions is effective if evidenced in a record authenticated by the person against which enforcement is sought.

(f) Except as otherwise provided in Section 105 and this section, no statute of frauds imposed by any law of this State applies to a transaction within the scope of this [Act].

SECTION 202. FORMATION IN GENERAL.

(a) A contract may be formed in any manner sufficient to show agreement, including offer and acceptance or conduct of both parties or operations of electronic agents which recognize the existence of a contract.

(b) If the parties so intend, an agreement sufficient to constitute a contract may be found even if the time of its making is undetermined, one or more terms are left open or to be agreed on, the records of the parties do not otherwise establish a contract, or one party reserves the right to modify terms.

(c) Even if one or more terms are left open or to be agreed upon, a contract does not fail for indefiniteness if the parties intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.

(d) In the absence of conduct or performance by both parties to the contrary, a contract is not formed if there is a material disagreement about a material term, including scope.

(e) If a term is to be fixed by later agreement and the parties intend not to be bound unless the term is so fixed, a contract is not formed if the parties do not agree to the term. In that case, each party shall deliver to the other party, or with the consent of the other party destroy, all copies of information and other materials already received and refund any contract fee paid for which performance has not been received. The parties remain bound by any contractual use restriction with respect to information or copies received or made and not delivered or deliverable to the other party.

SECTION 203. OFFER AND ACCEPTANCE IN GENERAL. Unless otherwise unambiguously indicated by the language or the circumstances:

(1) An offer to make a contract invites acceptance in any manner and by any medium reasonable under the circumstances.

(2) An order or other offer to acquire a copy for prompt or current delivery invites acceptance by either a prompt promise to ship or a prompt or current shipment of a conforming or nonconforming copy. However, a shipment of nonconforming copies is not an acceptance if the licensor seasonably notifies the licensee that the shipment is offered only as an accommodation to the licensee.

(3) If the beginning of a requested performance is a reasonable mode of acceptance, an offeror that is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.

(4) If an offer in an electronic message evokes an electronic message in response, a contract is formed:

(A) when an electronic acceptance is received; or

(B) if the response consists of beginning performance, full performance, or giving access to information, when the performance is received or the access is enabled and necessary access materials are received.

SECTION 204. ACCEPTANCE WITH VARYING TERMS.

(a) In this section, an acceptance materially alters an offer if it contains terms that materially conflict with or vary the terms of the offer or that add material terms not contained in the offer.

(b) Except as otherwise provided in Section 205, a definite and seasonable expression of acceptance operates as an acceptance, unless the acceptance materially alters the offer.

(c) If an acceptance materially alters the offer, a contract is not formed unless all other circumstances, including the conduct of the parties, establish a contract. If a contract is formed, the terms of the contract are determined:

(1) by the terms offered by one party if the other party agreed, such as by manifesting assent, to those terms other than in the acceptance that contained the conflicting, varying, or additional terms; or

(2) under Section 212, if paragraph (1) does not apply and the contract is formed by conduct.

(d) If the acceptance does not materially alter the offer, a contract is formed on the terms of the offer. Terms in the acceptance that conflict with terms in the offer are not part of the contract. In addition, the following rules apply:

(1) Additional terms contained in the acceptance are treated as proposals for additional terms.

(2) Between merchants, the proposed additional terms become part of the contract unless the offeror gives notice of objection before or within a reasonable time after it receives the proposed terms.

SECTION 205. CONDITIONAL OFFER OR ACCEPTANCE.

(a) Except as otherwise provided in subsection (b), an offer or acceptance that, because of the circumstances or the language, is conditioned on agreement by the other party to the terms of the offer or acceptance, precludes formation of a contract unless the other party agrees to its terms, such as by manifesting assent.

(b) If an offer and acceptance are in standard forms and one or both are conditioned on acceptance of their terms, the following rules apply:

(1) Conditional language in a standard term precludes the formation of a contract only if the party proposing the form acts in a manner consistent with the language, as by refusing to perform, refusing to permit performance, or refusing to accept the benefits of the contract, until the proposed terms are accepted.

(2) A party that agrees, such as by manifesting assent, to a conditional offer that is effective under paragraph (1) adopts the terms of the offer under Section 210 or 211, except terms of the conditional offer which conflict with any expressly agreed terms on price and quantity.

SECTION 206. OFFER AND ACCEPTANCE; ELECTRONIC AGENTS.

(a) A contract may be formed by the interaction of electronic agents. If the interaction results in the electronic agents engaging in operations that the circumstances indicate constitute acceptance, a contract is formed but a court may grant appropriate relief if the operations resulted from fraud, electronic mistake, or the like.

(b) A contract may be formed by the interaction of an electronic agent and an individual acting on the individual's own behalf or for another person. A contract is formed if the individual takes actions that the individual is free to refuse to take or makes a statement that the individual has reason to know will:

(1) cause performance, provision of benefits, or allowance of the use or access that is the subject of the contract, or result in instructions to a person or an electronic agent to do so; or

(2) indicate acceptance or an offer, regardless of other expressions or actions by the individual to which the individual has reason to know the electronic agent cannot react.

(c) The terms of a contract formed under subsection (b) are determined under Section 210 or 211, but do not include terms provided by the individual if the individual had reason to know that the electronic agent could not react to the terms as provided.

SECTION 207. FORMATION: RELEASES OF INFORMATIONAL RIGHTS.

(a) A release is effective without consideration if it is:

(1) in a record to which the releasing party agrees, such as by manifesting assent, and which identifies the informational rights released; or

(2) enforceable under estoppel, implied license, or other rules of law.

(b) A release continues for the duration of the informational rights released if the agreement does not specify its duration and does not require affirmative performance after the grant of the release by:

(1) the party granting the release; or

(2) the party receiving the release, except for relatively insignificant acts.

(c) In cases not governed by subsection (b), the duration of a release is governed by Section 308.

SECTION 208. FORMATION: SUBMISSION OF INFORMATION.

(a) The following rules apply to a submission of information for the creation, development, or enhancement of computer information which is not made pursuant to an existing agreement requiring the submission:

(1) A contract is not formed and is not implied from the mere receipt of an unsolicited submission.

(2) Engaging in a business, trade, or industry that by custom or practice regularly acquires ideas is not in itself an express or implied solicitation of the information.

(3) If the recipient seasonably notifies the person making the submission that the recipient maintains a procedure to receive and review submissions, a contract is formed only if:

(A) the submission is made and accepted pursuant to that procedure; or

(B) the recipient expressly agrees to terms concerning the submission.

(b) An agreement to disclose an idea creates a contract enforceable against the receiving party only if the idea as disclosed is confidential, concrete, and novel to the business, trade, or industry or the party receiving the disclosure otherwise expressly agreed.

SECTION 209. ADOPTING TERMS OF RECORDS.

(a) Except as otherwise provided in Section 211, a party adopts the terms of a record, including a standard form, if the party agrees to the record, such as by manifesting assent.

(b) The terms of a record may be adopted as the terms of the contract after beginning performance or use under the agreement, if the parties had reason to know that their agreement would be represented in whole or in part by a later record to be agreed on and there would be no opportunity to review the record or a copy of it before performance or use began. If the parties fail to agree to terms and did not intend to form a contract unless they agreed, Section 202(e) applies.

(c) If a party adopts the terms of a record, the terms become part of the contract without regard to the party's knowledge or understanding of individual terms in the record, except for a term that is unenforceable because it fails to satisfy another requirement of this [Act].

SECTION 210. MASS-MARKET LICENSE.

(a) A party adopts the terms of a mass-market license for purposes of Section 210 only if the party agrees to the license, such as by manifesting assent, before or during the party's initial performance or use of or access to the information. A term is not part of the license if:

(1) the term is unconscionable under Section 111 or is unenforceable under Section 105(a) or (b); or

(2) subject to Section 301, the term conflicts with terms to which the parties to the license expressly agreed.

(b) If a licensee does not have an opportunity to review a mass-market license or a copy of it before becoming obligated to pay and does not agree, such as by manifesting assent, to the license after having that opportunity, the licensee is entitled to a return under Section 112 and, in addition, to:

(1) reimbursement of any reasonable expenses incurred in complying with the licensor's instructions for return or destruction of the computer information or, in the absence of instructions, incurred for return postage or similar reasonable expense in returning it; and

(2) compensation for any reasonable and foreseeable costs of restoring the licensee's information processing system to reverse changes in the system caused by the installation, if:

(A) the installation occurs because information must be installed to enable review of the license; and

(B) the installation alters the system or information in it but does not restore the system or information upon removal of the installed information because of rejection of the license.

(c) In a mass-market transaction, if the licensor does not have an opportunity to review a record with proposed terms before the licensor delivers or becomes obligated to deliver the information, and if the licensor does not agree, such as by manifesting assent, to those terms after having that opportunity, the licensor is entitled to a return.

SECTION 211. TERMS OF CONTRACT FORMED BY CONDUCT.

(a) Except as otherwise provided in subsection (b) and subject to Section 301, if a contract is formed by conduct of the parties, the terms of the contract shall be determined by consideration of the terms and conditions to which the parties expressly agreed, course of performance, course of dealing, usage of trade, the nature of the parties' conduct, the records exchanged, the information or informational rights involved, the supplementary terms of this [Act] which apply to the transaction, and all other relevant circumstances.

(b) This section does not apply if the parties authenticate a record of the agreement or a party agrees, such as by manifesting assent, to the record of the other party.

SECTION 212. PRETRANSACTION DISCLOSURES IN INTERNET-TYPE TRANSACTIONS. A licensor that makes its computer information available to a licensee electronically from its Internet or similar electronic site affords an opportunity to review the terms of a standard form license that satisfies Section 112(e) with respect to a licensee that acquires information from that site, if the licensor:

(1) makes the standard terms of the license readily available for review by the licensee before the information is delivered or the licensee becomes obligated to pay, whichever comes first, by:

(A) displaying prominently and in close proximity to a description of the computer information, or to instructions or steps for acquiring it, the standard terms or a reference to an electronic location from which they can be readily obtained; or

(B) disclosing the availability of the standard terms in a prominent place on the site from which the computer information is offered and promptly furnishing a copy of the standard terms on request before the sale or license of the computer information; and

(2) does not take affirmative steps to prevent printing or storing of the standard terms for archival or review purposes by the licensee.

SECTION 213. EFFICACY AND COMMERCIAL REASONABLENESS OF ATTRIBUTION PROCEDURE. The efficacy and commercial reasonableness of an attribution procedure is determined by the court. In making this determination, the following rules apply:

(1) An attribution procedure established by statute or regulation is commercially reasonable for transactions within the coverage of the statute or regulation.

(2) Except as otherwise provided in paragraph (1), commercial reasonableness is determined in light of the purposes of the procedure and the commercial circumstances at the time the parties agree to or adopt the procedure.

(3) A commercially reasonable attribution procedure may use any security device or method that is reasonable under the circumstances.

SECTION 214. DETERMINING ATTRIBUTION OF ELECTRONIC EVENT TO PERSON.

(a) An electronic event is attributed to a person if it was the act of that person or its electronic agent, or the person is otherwise bound by it under the law of agency or other law. The party relying on attribution of an electronic event to another person has the burden of establishing attribution.

(b) The act of a person may be shown in any manner, including a showing of the efficacy of an attribution procedure.

(c) The effect of an electronic act attributed to a person under subsection (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties' agreement, if any, and otherwise as provided by law.

SECTION 215. ATTRIBUTION PROCEDURE FOR DETECTION OF CHANGES AND ERRORS: EFFECT OF USE. If there is an attribution procedure between the parties to detect errors or changes in an electronic event and one party conformed to the procedure but the other party did not, and the nonconforming party would have detected the change or error had that party also conformed, the conforming party may avoid the effect of the change or error.

SECTION 216. ELECTRONIC ERROR: CONSUMER DEFENSES.

(a) In this section, "electronic error" means an error in an electronic message created by a consumer using an information processing system when a reasonable method to detect and correct or avoid the error was not provided.

(b) In an automated transaction, a consumer is not bound by an electronic message that the consumer did not intend and which was caused by an electronic error, if the consumer:

(1) promptly on learning of the error:

(A) notifies the other party of the error; and

(B) causes delivery to the other party of all copies of the information or, pursuant to reasonable instructions received from the other party, delivers to another person or destroys all copies; and

(2) has not used or received any benefit from the information or caused the information or benefit to be made available to a third party.

(c) If subsection (b) does not apply, the effect of an error is determined by other law.

SECTION 217. ELECTRONIC MESSAGE: WHEN EFFECTIVE; EFFECT OF ACKNOWLEDGING.

(a) An electronic message is effective when received, even if no individual is aware of its receipt.

(b) Receipt of an electronic acknowledgment of an electronic message establishes that the message was received, but by itself does not establish that the content sent corresponds to the content received.

SECTION 301. PAROL OR EXTRINSIC EVIDENCE. Terms with respect to which confirmatory records of the parties agree or which are otherwise set forth in a record intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented by:

(1) course of performance, course of dealing, or usage of trade; and

(2) evidence of consistent additional terms, unless the court finds the record to have been intended as a complete and exclusive statement of the terms of the agreement.

SECTION 302. PRACTICAL CONSTRUCTION.

(a) The express terms of an agreement and any course of performance, course of dealing, and usage of trade must be construed whenever reasonable as consistent with each other. However, if such construction is unreasonable:

(1) express terms prevail over course of performance, course of dealing, and usage of trade;

(2) course of performance prevails over course of dealing and usage of trade; and

(3) course of dealing prevails over usage of trade.

(b) An applicable usage of trade in the place where any part of performance is to occur must be used in interpreting the agreement as to that part of the performance.

(c) Evidence of a relevant usage of trade, course of performance or course of dealing offered by one party in a proceeding is not admissible unless and until the party offering the evidence has given the other party notice that the court finds sufficient to prevent unfair surprise.

(d) The existence and scope of a usage trade are to be proved as facts.

SECTION 303. MODIFICATION AND RESCISSION.

(a) An agreement modifying a contract subject to this [Act] needs no consideration to be binding.

(b) An authenticated record that precludes modification or rescission except by an authenticated record may not otherwise be modified or rescinded. In a standard form supplied by a merchant to a consumer, a term requiring an authenticated record for modification of the contract is not enforceable unless the consumer manifests assent to the term.

(c) The modification and the contract as modified must satisfy the requirements of Sections 201(a) and 307(g) if the contract as modified is within these provisions.

(d) An attempt at modification or rescission which does not satisfy subsection (b) or (c) may operate as a waiver if Section 702 is satisfied.

SECTION 304. CONTINUING CONTRACTUAL TERMS.

(a) Terms of a contract involving successive performances apply to all performances unless the terms are modified in accordance with this [Act] or the contract, even if the terms are not displayed or otherwise brought to the attention of a party with respect to each successive performance.

(b) If a contract provides that terms may be changed as to future performances by compliance with a described procedure, a change proposed in good faith pursuant to that procedure becomes part of the contract if the procedure:

(1) reasonably notifies the other party of the change; and

(2) in a mass-market transaction, permits the other party to terminate the contract as to future performance if the change alters a material term and the party in good faith determines that the modification is unacceptable.

(c) The parties by agreement may determine the standards for reasonable notice unless the agreed standards are manifestly unreasonable in light of the commercial circumstances.

SECTION 305. TERMS TO BE SPECIFIED. An agreement that is otherwise sufficiently definite to be a contract is not invalid because it leaves particulars of performance to be specified by one of the parties. If particulars of performance are to be specified by a party, the following rules apply:

(1) Specification must be made in good faith and within limits set by commercial reasonableness.

(2) If a specification materially affects the other party's performance but is not seasonably made, the other party:

(A) is excused for any resulting delay in its performance; and

(B) may perform, suspend performance, or treat the failure to specify as a breach of contract.

SECTION 306. PERFORMANCE UNDER OPEN TERMS. A performance obligation of a party that can not be determined from the agreement or from other provisions of this [Act] requires the party to perform in a manner and in a time that is reasonable in light of the commercial circumstances existing at the time of agreement.

SECTION 307. INTERPRETATION AND REQUIREMENTS FOR GRANT.

(a) A license grants:

(1) the rights that are expressly described; and

(2) the right to use any informational rights within the licensor's control at the time of contracting which are necessary in the ordinary course to exercise the expressly described rights.

(b) If a license expressly limits use of the information or informational rights, use in any other manner is a breach of contract. In all other cases, a license contains an implied limitation that the licensee will not use the information or informational rights other than as described in subsection (a). However, use inconsistent with this implied limitation is not a breach if it is permitted under applicable law in the absence of the implied limitation.

(c) An agreement that does not specify the number of permitted users permits a number of users which is reasonable in light of the informational rights involved and the commercial circumstances existing at the time of agreement.

(d) Neither party is entitled to any rights in new versions of, or improvements or modifications to, information made by the other party. A licensor's agreement to provide new versions, improvements, or modifications requires that the licensor provide them as developed and made generally commercially available from time to time by the licensor.

(e) Neither party is entitled to receive copies of source code, schematics, master copy, design material, or other information used by the other party in creating, developing, or implementing the information.

(f) Terms dealing with the scope of an agreement must be construed under ordinary principles of contract interpretation in light of the informational rights and the commercial context. In addition, the following rules apply:

(1) A grant of "all possible rights and for all media" or "all rights and for all media now known or later developed", or a grant in similar terms, includes all rights then existing or later created by law and all uses, media, and methods of distribution or exhibition, whether then existing or developed in the future and whether or not anticipated at the time of the grant.

(2) A grant of an "exclusive license", or a grant in similar terms, means that:

(A) for the duration of the license, the licensor will not exercise, and will not grant to any other person, rights in the same information or informational rights within the scope of the exclusive grant; and

(B) the licensor affirms that it has not previously granted those rights in a contract in effect when the licensee's rights may be exercised.

(g) The rules of this section may be varied only by a record that is sufficient to indicate that a contract has been made and which is:

(1) authenticated by the party against which enforcement is sought; or

(2) prepared and delivered by one party and adopted by the other under Section 210 or 211.

SECTION 308. DURATION OF CONTRACT. If an agreement does not specify its duration, to the extent allowed by other law, the following rules apply:

(1) Except as otherwise provided in paragraph (2) and Section 208, the agreement is enforceable for a time reasonable in light of the licensed subject matter and commercial circumstances but may be terminated as to future performances at will by either party during that time on giving seasonable notice to the other party.

(2) The duration of contractual rights to use licensed subject matter is a time reasonable in light of the licensed informational rights and the commercial circumstances. However, subject to cancellation for breach of contract, the duration of the license is perpetual as to the contractual rights and contractual use restrictions if:

(A) the license is of a computer program that does not license source code but that transfers ownership of a copy or delivery of a copy for a contract fee, the total amount of which is fixed at or before the time of delivery of the copy; or

(B) the license expressly granted the right to incorporate or use the licensed information or informational rights with information or informational rights from other sources in a combined work for public distribution or public performance.

SECTION 309. AGREEMENT FOR PERFORMANCE TO PARTY'S SATISFACTION.

(a) Except as otherwise provided in subsection (b), an agreement that provides that the performance of one party is to be to the satisfaction or approval of the other requires performance sufficient to satisfy a reasonable person in the position of the party that must be satisfied.

(b) Performance must be to the subjective satisfaction of the other party if:

(1) the agreement expressly so provides, such as by stating that approval is in the "sole discretion" of the party, or words of similar import; or

(2) the agreement is for informational content to be evaluated in reference to subjective characteristics such as aesthetics, appeal, subjective quality, suitability to taste, or similar characteristics.

SECTION 401. WARRANTY AND OBLIGATIONS CONCERNING ENJOYMENT AND NONINFRINGEMENT.

(a) A licensor that is a merchant regularly dealing in information of the kind warrants that the information shall be delivered free of the rightful claim of any third person by way of infringement or misappropriation, but a licensee that furnishes detailed specifications to the licensor and the method required for meeting the specifications holds the licensor harmless against any such claim caused by compliance with the specification or method except for a claim that results from the failure of the licensor to adopt, or notify the licensee of, a noninfringing alternative of which the licensor had reason to know.

(b) A licensor warrants:

(1) for the duration of the contract, that no person holds a claim to or interest in the information which arose from an act or omission of the licensor, other than a claim by way of infringement or misappropriation, which will interfere with the licensee's enjoyment of its interest; and

(2) as to rights granted exclusively to the licensee, that within the scope of the license and as to other law that applies to the licensed rights:

(A) as to a patent license, to the knowledge of the licensor, the licensed patent rights are valid and exclusive to the extent that exclusivity and validity are recognized; and

(B) in all other cases, the licensed informational rights are valid and exclusive for the information as a whole to the extent that exclusivity and validity are recognized.

(c) The warranties in this section are subject to the following rules:

(1) If informational rights are subject to a right of privileged use, collective administration, or compulsory licensing, the warranty is subject to those rights.

(2) The obligations under subsections (a) and (b)(2) apply solely to informational rights arising under the laws of the United States or a State, or other jurisdiction of the United States, unless the contract expressly provides that the scope of the warranty obligations extends to rights under the laws of other countries. Language is sufficient for this purpose if it states "The licensor warrants [exclusivity] [noninfringement] in [specified countries] [worldwide]," or words of similar import. In that case, the warranty extends to the specified country or, in the case of a general reference to "worldwide" or the like, to all countries within the description, but only to the extent that the rights are recognized under a treaty or international convention to which the country and the United States are signatories.

(3) The warranties under subsections (a) and (b)(2) are not made in an agreement that merely permits use of rights under a patent.

(d) Except as otherwise provided in subsection (e), a warranty under this section may be disclaimed or modified only by specific language or by circumstances that give the licensee reason to know that the licensor does not warrant that competing claims do not exist or that the licensor purports to grant only the rights it may have. In an automated transaction, language is sufficient if it is conspicuous. Otherwise, language in a record is sufficient if it states "There is no warranty against interference with your enjoyment of the information or against infringement", or words of similar import.

(e) Between merchants, a grant of a "quitclaim", or a grant in similar terms, grants the information or informational rights without an implied warranty as to infringement or misappropriation or as to the rights actually possessed or transferred by the licensor.

SECTION 402. EXPRESS WARRANTY.

(a) Subject to subsection (c), an express warranty by a licensor is created as follows:

(1) An affirmation of fact or promise made by the licensor to its licensee in any manner, including in a medium for communication to the public such as advertising, which relates to the information and becomes part of the basis of the bargain creates an express warranty that the information to be furnished under the agreement must conform to the affirmation or promise.

(2) Any description of the information which is made part of the basis of the bargain creates an express warranty that the information must conform to the description.

(3) Any sample, model, or demonstration of a final product which is made part of the basis of the bargain creates an express warranty that the performance of the information must reasonably conform to the performance of the sample, model, or demonstration, taking into account such differences as would appear to a reasonable person in the position of the licensee between the sample, model, or demonstration and the information as it will be used.

(b) It is not necessary to the creation of an express warranty that the licensor use formal words such as "warrant" or "guaranty", or state a specific intention to make a warranty. However, an express warranty is not created by:

(1) an affirmation or prediction merely of the value of the information or informational rights;

(2) a display or description of a portion of the information to illustrate the aesthetics, market appeal, or the like, of informational content; or

(3) a statement purporting to be merely the licensor's opinion or commendation of the information or informational rights.

(c) An express warranty or express contractual obligation, if any, exists with respect to published informational content covered by this [Act] to the same extent that it would exist if the published informational content had been published in a form that placed it outside this [Act]. However, if the warranty or express contractual obligation is breached, the remedies of the aggrieved party are those under this [Act] and the agreement.

SECTION 403. IMPLIED WARRANTY: MERCHANTABILITY OF COMPUTER PROGRAM.

(a) Unless the warranty is disclaimed or modified, a merchant licensor of a computer program warrants:

(1) to the end user that the computer program is fit for the ordinary purposes for which such computer programs are used;

(2) to the distributor that:

(A) the program is adequately packaged and labeled as the agreement or the circumstances may require; and

(B) in the case of multiple copies, the copies are within the variations permitted by the agreement, of even kind, quality, and quantity, within each unit and among all units involved; and

(3) that the program conforms to the promises or affirmations of fact made on the container or label, if any.

(b) Unless disclaimed or modified, other implied warranties with respect to computer programs may arise from course of dealing or usage of trade.

(c) No warranty is created under this section with respect to informational content, but an implied warranty may arise under Section 404.

SECTION 404. IMPLIED WARRANTY: INFORMATIONAL CONTENT.

(a) Unless the warranty is disclaimed or modified, a merchant that, in a special relationship of reliance with a licensee, collects, compiles, processes, provides, or transmits informational content, warrants to its licensee that there is no inaccuracy in the informational content caused by the merchant's failure to perform with reasonable care.

(b) A warranty does not arise under subsection (a) with respect to:

(1) published informational content; or

(2) a person that acts as a conduit or provides only editorial services in collecting, compiling, or distributing informational content identified as that of a third person.

(c) This warranty is not governed by the preclusion in Section 104(c)(1) on disclaiming reasonableness and care.

SECTION 405. IMPLIED WARRANTY: LICENSEE'S PURPOSE; SYSTEM INTEGRATION.

(a) Unless the warranty is disclaimed or modified, if a licensor at the time of contracting has reason to know any particular purpose for which the information is required and that the licensee is relying on the licensor's skill or judgment to select, develop, or furnish suitable information, the following rules apply:

(1) Except as otherwise provided in paragraph (2), there is an implied warranty that the information is fit for that purpose.

(2) If from all the circumstances it appears that the licensor was to be paid for the amount of its time or effort regardless of the fitness of the resulting information, the implied warranty is that the information will not fail to achieve the licensee's particular purpose as a result of the licensor's lack of reasonable effort.

(b) There is no warranty under subsection (a) with regard to:

(1) the aesthetics, market appeal, or subjective quality of informational content; or

(2) published informational content, but there may be a warranty with regard to the licensor's selection among published informational content from different providers.

(c) If an agreement requires a licensor to provide or select a system consisting of computer programs and goods, and the licensor has reason to know that the licensee is relying on the skill or judgment of the licensor to select the components of the system, there is an implied warranty that the components provided or selected will function together as a system.

(d) This warranty is not governed by the preclusion in Section 104(c)(1) on disclaiming reasonableness and care.

SECTION 406. DISCLAIMER OR MODIFICATION OF WARRANTY.

(a) Words or conduct relevant to the creation of an express warranty and words or conduct tending to disclaim or modify an express warranty must be construed wherever reasonable as consistent with each other. Subject to Section 301 with regard to parol or extrinsic evidence, the disclaimer or modification is inoperative to the extent that construction is unreasonable.

(b) Except as otherwise provided in subsections (c), (d), and (e), to disclaim or modify an implied warranty or any part of it, but not the warranty in Section 401, the following rules apply:

(1) Except as otherwise provided in this subsection:

(A) To disclaim or modify an implied warranty arising under Section 403 language in a record must mention "merchantability" or "quality" or use words of similar import.

(B) To disclaim or modify an implied warranty arising under Section 404, language in a record must mention "accuracy" or use words of similar import.

(2) Language to disclaim or modify an implied warranty arising under Section 405 must be in a record. It is sufficient to state "There is no warranty that this information or efforts will fulfill any of your particular purposes or needs", or words of similar import.

(3) Language in a record is sufficient to disclaim all implied warranties if it individually disclaims each implied warranty or, except for the warranty in Section 401, if it states "Except for express warranties stated in this contract, if any, this [information] [computer program] is provided with all faults, and the entire risk as to satisfactory quality, performance, accuracy, and effort is with the user", or words of similar import.

(4) Language sufficient under [Article 2 or 2A of the Uniform Commercial Code] to disclaim or modify an implied warranty of merchantability is sufficient to disclaim or modify the warranties under Sections 403 and 404. Language sufficient under [Article 2 or 2A of the Uniform Commercial Code] to disclaim or modify an implied warranty of fitness for a particular purpose is sufficient to disclaim or modify the warranties under Section 405.

(5) Language in a record that disclaims or modifies an implied warranty under Sections 403 and 405 must be conspicuous.

(c) Unless the circumstances indicate otherwise, all implied warranties, but not the warranty in Section 401, are disclaimed by expressions like "as is" or "with all faults" or other language that in common understanding call the licensee's attention to the disclaimer of warranties and makes plain that there are no implied warranties.

(d) If a licensee before entering into a contract has examined the information or the sample or model as fully as it desired or it has refused to examine the information, there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to the licensee.

(e) An implied warranty may also be disclaimed or modified by course of performance, course of dealing, or usage of trade.

(f) If a contract requires ongoing performance or a series of performances by the licensor, language of disclaimer or modification which complies with this section is effective with respect to all performances under the contract.

(g) Remedies for breach of warranty may be limited in accordance with this [Act] with respect to liquidation or limitation of damages and contractual modification of remedy.

SECTION 407. MODIFICATION OF COMPUTER PROGRAM. A licensee that modifies a copy of a computer program, other than by using a capability of the program intended for that purpose in the ordinary course, does not invalidate any warranty regarding performance of an unmodified copy but does invalidate any warranties, express or implied, regarding performance of the modified copy. A modification occurs if a licensee alters code in, deletes code from, or adds code to the computer program.

SECTION 408. CUMULATION AND CONFLICT OF WARRANTIES. Warranties, whether express or implied, must be construed as consistent with each other and as cumulative, but if that construction is unreasonable, the intention of the parties determines which warranty is dominant. In ascertaining that intention, the following rules apply:

(1) Exact or technical specifications displace an inconsistent sample or model or general language of description.

(2) A sample displaces inconsistent general language of description.

(3) Express warranties displace inconsistent implied warranties other than an implied warranty under Section 405(a).

SECTION 409. THIRD-PARTY BENEFICIARIES OF WARRANTY.

(a) Except for published informational content, a warranty to a licensee extends to persons for whose benefit the licensor intends to supply the information or informational rights and which rightfully use the information in a transaction or application of a kind in which the licensor intends the information to be used.

(b) A warranty to a consumer extends to each individual consumer in the licensee's immediate family or household if the individual's use was reasonably expected by the licensor.

(c) A contractual term that excludes or limits third-party beneficiaries is effective to exclude or limit a contractual obligation or contract liability to third persons except individuals described in subsection (b).

(d) A disclaimer or modification of a warranty or remedy which is effective against the licensee is also effective against third persons to which a warranty extends under this section.

SECTION 501. OWNERSHIP OF INFORMATIONAL RIGHTS.

(a) If an agreement provides for conveyance of ownership of informational rights in a computer program, ownership passes at the time and place specified by the agreement but can not pass until the program is in existence and identified to the contract. If the agreement does not specify a different time or place, ownership passes when the program and the informational rights are in existence and identified to the contract.

(b) Transfer of a copy does not transfer ownership of informational rights.

SECTION 502. TITLE TO COPY.

(a) In a license:

(1) title to a copy is determined by the license;

(2) a licensee's right under the license to possession or control of a copy is governed by the license and does not depend solely on title to the copy; and

(3) if a licensor reserves title to a copy, the licensor retains title to that copy and any copies made of it, unless the license grants the licensee a right to make and sell copies to others, in which case the reservation of title applies only to copies delivered to the licensee by the licensor.

(b) If an agreement provides for transfer of title to a copy, title passes:

(1) at the time and place specified in the agreement; or

(2) in the absence of such specification:

(A) at the time and place the licensor completed its obligations with respect to delivery of a copy on a tangible medium; and

(B) at the time and place at which the licensor completed its obligations with respect to electronic delivery of a copy if a first sale occurs under federal copyright law.

(c) If the party to which title passes under the contract refuses delivery of the copy or rejects the terms of the agreement, title revests in the licensor.

SECTION 503. TRANSFER OF CONTRACTUAL INTEREST. The following rules apply to a transfer of a contractual interest:

(1) A party's interest in a contract may be transferred unless the transfer:

(A) is prohibited under other law; or

(B) would materially change the duty of the other party, materially increase the burden or risk imposed on the other party, or materially impair the other party's property or its likelihood or expectation of obtaining return performance.

(2) Except as provided in Section 508(a)(1)(B), a term prohibiting transfer of a party's interest is enforceable, and a transfer made in violation of that term is a breach of contract and is ineffective except to the extent that:

(A) the contract is a license for incorporation or use of the licensed information or informational rights with information or informational rights from other sources in a combined work for public distribution or public performance and the transfer is of the completed, combined work; or

(B) the transfer of a right to payment arising out of the transferor's due performance of less than its entire obligation would be enforceable under paragraph (1) in the absence of the contractual term prohibiting transfer.

(3) A right to damages for breach of the whole contract or a right arising out of the transferor's due performance if the entire obligation can be transferred notwithstanding paragraph (1)(B) or an agreement otherwise.

(4) A term which prohibits transfer of a mass-market license must be conspicuous.

SECTION 504. EFFECT OF TRANSFER OF CONTRACTUAL RIGHTS.

(a) A transfer of "the contract" or of "all my rights under the contract", or a transfer in similar general terms, is a transfer of all contractual rights. Whether the transfer is effective is determined under Section 503 and Section 508(a)(1)(B).

(b) The following rules apply to a transfer of a party's contractual rights:

(1) The transferee is subject to all contractual use restrictions.

(2) Unless the language or circumstances otherwise indicate, as in a transfer as security, the transfer delegates the duties of the transferor and transfers its rights.

(3) Acceptance of the transfer is a promise by the transferee to perform the delegated duties. The promise is enforceable by the transferor and any other party to the original contract.

(4) The transfer does not relieve the transferor of any duty to perform, or of liability for breach of contract, unless the other party to the original contract agrees that the transfer has that effect.

(c) A party to the original contract other than the transferor may treat a transfer that conveys a right or duty of performance without its consent as creating reasonable grounds for insecurity and, without prejudice to the party's rights against the transferor, may demand assurances from the transferee pursuant to Section 709.

SECTION 505. PERFORMANCE BY A DELEGATE; SUBCONTRACT.

(a) A party may perform its contractual duties or exercise its rights through a delegate or a subcontract unless:

(1) the contract prohibits delegation or subcontracting; or

(2) the other party has a substantial interest in having the original promisor perform or control the performance.

(b) Delegating or subcontracting performance does not relieve the party delegating or subcontracting the performance of a duty to perform or of liability for breach.

(c) An attempted delegation that violates a term that prohibits delegation is not effective.

SECTION 506. TRANSFER BY LICENSEE.

(a) If all or any part of a licensee's interest in a license is transferred, voluntarily or involuntarily, the transferee acquires no interest in information, copies, or the contractual or informational rights of the licensee unless the transfer is effective under Section 503. If the transfer is effective, the transferee takes subject to the terms of the license.

(b) Except as otherwise provided under trade secret law, a transferee acquires no more than the contractual or other rights its transferor was authorized to transfer.

SECTION 507. FINANCING WHERE FINANCIER DOES NOT BECOME LICENSEE. If a financier does not become a licensee, the following rules apply:

(1) The financier does not receive the benefits or burdens of the license.

(2) The licensee's rights and obligations with respect to the information and informational rights are governed by:

(A) the license;