UCITA Redux?

Remember UCITA? The Uniform Computer Information Transactions Act was initially proposed in the 1990's as a revision to the Uniform Commercial Code that would have regulated the licensing and sale of software, but it failed to garner support after the American Law Institute and later the ABA walked away due to concerns that UCITA would take away key customer rights, including choice of jurisdiction in contract disputes. Fast forward to 2005, where U.S. negotiators are meeting this month to seek agreements on jurisdiction as part of the Hague Convention of Exclusive Choice of Court Provisions on Private International Law. While the U.S. State Department hopes to resolve the question of which courts will hear international business disputes, software clickwrap agreements may be a sticking point. With a clickwrap agreement, software buyers implicitly agree to a contract for the sale of the software merely by downloading software or opening up its package, and some stakeholders fear that foreign businesses may be able to insert unfavorable venue provisions into the agreements. Opponents of the current draft of the agreement say it's "a lot like a global UCITA," and presents the same problem of non-negotiated venue provisions.

How will this turn out? It's hard to say. Negotiators have worked more than 40 years to create binding international judgments, only to watch Hague conventions break up over a variety of stumbling blocks, the most recent being the rise of the internet and its impact on business transactions. Now that negotiations are resuming, software companies and consumer advocates will be paying close attention once again. Stay tuned for developments.

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