The History of UCITA

The UCITA began as an amendment to Article 2 of the Uniform Commercial Code (UCC). The UCC is a well established set of commerce laws, present in most of the 50 states. It was created in the 1930s to standardize how contracts are treated throughout the country. Today, two organizations, the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Law Institute (ALI) are in charge of maintaining the UCC, keeping it up to date with the ever-changing economy.

Several years ago, as it became apparent that the unprecedented growth rate of the software industry was changing the economic landscape, the NCCUSL and the ALI met to add new provisions to the UCC regarding software. The proposal was to add a new section to Article 2 of the UCC, Article 2B. Article 2 deals with contracts for the sales and leases of goods and services; this new Article 2B would apply specifically to transactions involving software.

However, all did not go as planned. As the drafting process went forward, the ALI became increasing unsatisfied with the results, voicing numerous proposals to rework parts of the new law it thought were unbalanced. These requests were denied, however, and, finally, in an unprecedented move, the ALI withdrew its support for the amendment. This threatened to kill the law altogether, because the UCC cannot be changed without approval from both the NCCUSL and the ALI.

Not wanting to see the law die, the NCCUSL renamed it UCITA and continued pushing it forward as a separate act, approving it in February 2000. Shortly afterwards, the states of Maryland and Virginia signed the act into law. It is expected to be introduced to all 50 states in the coming years.