The Uniform Computer Information Transactions Act: Ethical Issues in Software Contract Law


UCITA has attracted an unusual amount of opposition and criticism. In fact, most of the information available on UCITA today is distributed by its opponents. There are many valid claims against UCITA, but many arguments against it are based on false information or are simply inaccurate. When analyzing this complicated law, one must separate the real issue from the red herrings.

Who Opposes UCITA?

  • Attorney Generals of 26 states
  • Many consumer advocacy groups
  • Many software developers
  • Librarians
  • The entertainment industry
  • Lawyers
  • The Federal Trade Commission (see this letter)
  • Many others

Why Do They Oppose It?

Scope and Vagueness: Opponents argue that UCITA applies to products that wouldn't normally be considered 'computers', and that the language of UCITA is so dense and confusing that it will disadvantage those who can't afford to hire armies of lawyers.

This is half true. First, UCITA explicitly limits its scope to products that are really only computers; fears that electronic toasters will be affected by this law are misinformed. However, UCITA is a relatively large law (it is about 300 pages of text), and law is often quite dense to non lawyers. More importantly, UCITA is designed to provide guidelines, not make specific regulations, so there seem to be many loopholes that will allow software vendors to get away with all sorts of questionable practices. These are not real loopholes, however, because UCITA is supposed to work with other, existing laws that cover these issues. It explicitly says that certain practices should be ruled out because of existing law that trumps UCITA.

"Shrink-Wrap" Licenses: UCITA would allow so-called 'shrink-wrap' licenses, which allow a product to be sold without the license being known to the customer beforehand. Then, once the customer opens the product, they are presented with an often confusing license statement on the packaging or in a window during the install process, and if they open the packaging or click 'Agree', they are bound to all the terms of the contract. Opponents of UCITA say this kind of license will allow vendors to impose unreasonable restrictions on consumers without their knowledge.

This is a real worry. However, UCITA only allows for such contracts to exists. Also, if the customer cannot review the license before purchasing the product, UCITA says the customer must be able to return the product after seeing the license (in case they do not wish to agree to it). Thus, the customer is never forced into anything they had no chance to review. But, since the customer had no part in making up the contract, and not purchasing the product may not be a real option for them, the danger of customers being forced into unfavorable contracts is still very real. UCITA addresses this problem by letting courts rule against terms in contracts that are deemed 'unconscionable'. The definition of 'unconscionable' is something that must be determined by other laws and legal precedent.

Liability: UCITA lets vendors deny all responsibility for defective products, even if they knew about the defect. This would make software vendors harder to sue for fraudulent business practices, opponents argue.

UCITA does contain an entire section detailing what kinds of warranties are implied by default and how software vendors can limit their liability. The justification UCITA gives for this is the difficulty of producing bug free software. If software vendors were liable for any problems caused by the use of their software, only large companies could afford to make software because of the extensive quality testing that would be required. On the other hand, taking all responsibility away from the vendors could lead to the release of knowingly faulty software to unsuspecting consumers. If a company does release buggy software, however, they will soon loose their customers, so this may not be a real concern.

Freedom of Speech: One of the many provisions that software vendors could include in their licenses under UCITA is that customers cannot publish information about their product with their permission. This, opponents argue, is against the principle of free speech, and will hurt the ability of third parties to conduct impartial reviews of software products.

While it is true that vendors can, through the license, prohibit customers from saying certain things about their software, the concerns expressed about freedom of speech are not realistic. First of all, there scenarios where restricting the speech of customers makes sense, such as beta software testing and other cases in which non-disclosure agreements would normally be signed. These are the cases to which the law is intended to apply. Vendors would not be able to keep reviewers from writing impartial reviews without being attacked by the public, and such terms in a contract would probably go against public policy, to which UCITA is subject.

Self-Help: Self help is the process by which vendors attempt to enforce their end of the contract through technological means, either by such techniques as copy protection, or, more controversially, by remotely disabling software. Opponents claimed that UCITA would allow such practices that obviously infringe on consumer rights.

This part of UCITA was drastically revised in a second draft, approved September 2000. Self-help is only enforceable in very limited circumstances, and never in a mass-market situation.


Hans Andersen, Jeff Raymakers, Jonathan Reichenthal
March 2001