By: Robert R. Kiesel
A. Uniform Computer Information Transactions Act (UCITA)
Status:
Approved and recommended for enactment in all the States by the National Conference of Commissioners on Uniform State Laws (NCCUSL) on July 30, 1999. Not yet enacted by any state legislature.
Scope:
UCITA applies to "computer information" transactions but does not apply to (1) financial services transactions, (2) audio or visual programming, motion picture or sound recording transactions, or (3) employment agreements (other than independent contractor agreements).
"Computer information" means all information in electronic form which is obtained from or through the use of a computer or which is in a form capable of being processed by a computer. Information includes computer software.
Key Provisions:
- Authorizes "click-through" and "shrink-wrap" licenses, except with respect to unconscionable terms.
- For information delivered by the Internet, a standard form license agreement is enforceable (except for unconscionable terms) if the licensor makes the terms of the license readily available for review before the information is delivered by prominently displaying the license terms or reference to an electronic location where the terms can be readily obtained.
Warranties:
An information merchant warrants noninfringement.
Advertising can create express warranties.
Implied warranty of merchantability of computer programs.
Implied warranties of informational content. If there is a special relationship of reliance, Licensor warrants no inaccuracy in data caused by failure to use reasonable care.
No warranty for "published informational content," or if licensor is merely acting as a conduit for the licensed information.
Implied warranty that computer information is fit for a particular purpose.
Disclaimers:
To disclaim the implied warranty of merchantability, language must mention "merchantability" or "quality" or use words of similar import and must be conspicuous.
To disclaim implied warranty of information accuracy, language must mention "accuracy" or use words of similar import.
Language to disclaim the implied warranty of fitness for a particular purpose must be conspicuous. It is sufficient to state "There is no warranty that this information, our efforts, or the system will fulfill any of your particular purposes or needs", or words of similar import.
Language is sufficient to disclaim all implied warranties other than the warranty of noninfringement, if it is conspicuous and states "Except for express warranties stated in this contract, if any, this information is provided with all faults, and the entire risk as to satisfactory quality, performance, accuracy, and effort is with the user", or words of similar import.
All implied warranties, other than noninfringement, are also disclaimed by expressions like "as is" or "with all faults."
B. Uniform Electronic Transactions Act (UETA)
Status:
Approved and recommended for enactment in all the States by NCCUSL on July 30,1999. Not yet enacted by any State legislature.
Scope:
UETA applies to electronic records and electronic signatures relating to any type of transaction.
Key Provisions:
This Act does not provide substantive law. It legalizes electronically transmitted and stored agreements and electronic signatures.
"Electronic signature" means "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record."
UETA authorizes transactions between or with electronic agents.
C. Gramm-Leach-Bliley Act Privacy Provisions
Status:
Enacted by U.S. Congress. Effective November 12, 2000. Regulations under this Act are to be promulgated by various regulatory agencies by March 12, 2000.
Scope:
Applies to all "financial institutions" meaning any entity "the business of which is engaging in financial activities."
Scope is more than just banks and bank subsidiaries.
Key Provisions:
This Act restricts a financial institution from disclosing to any nonaffiliated third party any "nonpublic personal information, unless such financial institution provides the consumer with notice" and an opportunity to block disclosure.
Restricted information includes information:
From the customer (such as application information and other financial data provided by a consumer).
From the institution's own transactions or experiences with the customer.
From any third-party source (such as a demographics firm or a credit bureau).
Unqualified prohibition against the sharing of customer account number information "or similar form of access number of access code" for a consumer credit card, deposit, or transaction account to nonaffiliated third parties for purposes of marketing to the consumer, including telemarketing, direct mail and email marketing.
Before a financial institution may disclose a customer's nonpublic personal information to a nonaffiliated third party, the following must occur:
- The financial institution must have provided its privacy policy to that customer.
- The customer must have been given notice and an opportunity to opt out of such information sharing. The notice must clearly and conspicuously (a) state that information about the customer could be shared with nonaffiliated third parties; (b) give the customer an opportunity to opt out of such sharing before it occurs; and (c) explain to the customer how they can opt out.
