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Governor Gilmore Signs First Uniform Computer Information Transaction Act

Governor James Gilmore (R-VA) yesterday signed the nation’s first Uniform Computer Information Transaction Act, which provides uniform rules for contractual electronic transactions.

The Act, developed and refined by the National Conference of Commissioners on Uniform State Laws, provides uniform rules governing contractual transactions for intangible goods, such as computer software, Internet and online information, multimedia interactive products and computer databases.

The measure is important to software direct marketers because it clarifies current legal uncertainties, protects software manufactures from software piracy, provides simpler contracts, lessens the costs of doing business and levels the playing field for small and large information providers.

“While this changes the dynamic for software direct marketers a bit, it will increase the profitabilty of software and other digital goods in the future,” said Ben Isaacson, AIM’s executive director.

UCITA recognizes the “freedom to contract,” which provides contracting parties the freedom to set their own negotiated terms and conditions in each and every transaction, including:

* Default rules and guidance regarding contracts for computer information transactions for those terms not covered in contracts;

* Modified contract formation rules adopted to permit and facilitate

electronic contracting;

* Adjustments to commonly recognized warranties as appropriate for

computer information transactions;

* Clarifications as to license ownership rights and the ability to

transfer rights and duties under a license;

* Adoption of traditional rules as to what is acceptable performance to the context of computer information transaction

“UCITA provides clarity to contract law where none existed before, which will make it easier for consumers and industries to conduct transactions via the Internet,” Governor Gilmore said. “This increase in electronic transactions will perpetuate the Internet revolution, promote e-commerce and foster the growth of Virginia's technology and manufacturing economies.”

Virginia is the first state to sign this measure into law. The software industry is hoping other state legislatures support the bill and will campaign for it this year and next year as it is presented to the states. But opponents, including the Federal Trade Commission, Consumers Union and an alliance of 20 companies, warn that the UCITA will instead undermine consumers' rights and lead to shoddy software development.

Proponents, however, are pleased.

“By singing this measure into law, Gov. Gilmore…is leading the nation in establishing a legal framework for electronic transactions,” said Don Upson, Secretary of Technology. “Businesses and consumer groups alike will benefit from this clear set of legal guidelines.”

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