INTERNAUT

An effort is afoot to regulate sales of Net products nationally

Shawn P. McCarthy

Chances are you've never heard of the Uniform Computer and Information Transactions Act, although within the next 12 months UCITA could affect the way your office buys software or Internet services.

You probably never heard of the National Conference of Commissioners on Uniform State Laws, either. NCCUSL developed the framework for UCITA this summer. The committee of professors, attorneys, retired judges and industry representatives assembled to standardize the way states make and enforce laws for a range of electronic commerce transactions, from software to online document sales to stock quotes.

Let me in

If UCITA becomes a national standard, the feds might have to recognize it, too. But UCITA isn't assured of a welcome reception in statehouses across the country. Its first test is in Virginia.

Uniform laws that cover product sales now were designed long ago for things such as cars and appliances. Licensing of software, Internet services and databases is a different animal, and states have taken many approaches to regulation.

The problem arises when transactions reach across state lines. The UCITA draft laws model uniform laws, which states are free to pass or reject. It obviously would work best if everyone adopted them.

Critics charge that the new framework effectively removes software and possibly Internet services such as subscription databases from existing consumer law oversight. NCCUSL denies the charge.

Another point of contention is that UCITA would let people choose what law to apply to their contracts. This flexibility worries some, but NCCUSL says it's not unprecedented in U.S. statutory and common law, and it provides flexibility for divergent businesses such as a cable company and a software company that develop products together.

Feds do it

UCITA does not strictly follow some standards consumers have grown used to, such as credit card liability. The act doesn't propose to change credit card laws, which are set at the federal level. But it does recognize that online transactions might be different and that imposing one model could keep the market from testing different approaches.

Consumer groups in general are against the draft measure, mostly because of uncertainty about how it would affect consumers. Industry groups generally support UCITA because it gives them a standard way to deal with state laws.

Complicating all this is the fact that UCITA started life as a proposed addition to the Uniform Commercial Code. Last spring it was known as Article 2B, but the influential American Law Institute decided not to support Article 2B, partly because of consumer concerns. At that point, supporters took a different tack and drafted UCITA.

Now several attorneys general have stated that UCITA deviates substantially from consumer expectations, which could lead to public confusion. If that happens, UCITA could hurt rather than help the spread of
e-commerce across state lines.

As anyone who has bought goods or software online knows, we need something
like UCITA at the state level. Whether it will be adopted nationally remains to be seen.

Overall, UCITA is ruffling feathers that need to be ruffled. The worst thing that could happen is that states ignore it. But at least one state, Virginia, has decided it's time to get started.

For more information, visit the NCCUSL Web site, at www.nccusl.org/. UCITA itself appears at www.law.upenn.edu/bll/ulc/fnact99/1990s/ucita.htm.




The Business Software Alliance's views on UCITA are at www.bsa.org/policy/ucita/intro_c.html.

Shawn P. McCarthy designs products for a Web search engine provider. E-mail him at smccarthy@lycos.com.''

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