For Immediate Release

NCCUSL to Promulgate Freestanding Uniform Computer Information Transactions Act

ALI and NCCUSL Announce that Legal Rules for Computer

Information Will Not Be Part of UCC

April 7, 1999. The National Conference of Commissioners on Uniform State Laws (Conference) and the American Law Institute (Institute) have announced that legal rules for computer information transactions will not be promulgated as Article 2B of the Uniform Commercial Code, but the Conference will promulgate the rules for adoption by states as the Uniform Computer Information Transactions Act.

The Conference, a 107-year-old organization whose purpose is to prepare statutes for enactment uniformly among the states, and the Institute, a 76-year-old organization whose purpose is "to promote the clarification and simplification of the law and its better adaptation to social needs," have long been partners in drafting the various articles of the Uniform Commercial Code (Code or UCC). For the past several years the two organizations have worked cooperatively on a UCC project to prepare a statute that would codify evolving legal rules for computer information transactions.

The information industry has grown exponentially in the last decade and already exceeds most manufacturing sectors in size. The numbers of transactions in information and their dollar value are immense. The Internet and information technology and commerce are major components of the future economic prosperity of the United States. As the nation moves from an economy centered around transactions in goods and services to an information economy, the need has grown dramatically for coherent and predictable legal rules to support the contracts that underlie that economy. Lack of uniformity and lack of clarity of the legal rules governing these transactions engender uncertainty, unpredictability, and high transaction costs. Nonetheless, it has become apparent that this area does not presently allow the sort of codification that is represented by the Uniform Commercial Code.

Institute members will have an opportunity to discuss the Uniform Computer Information Transactions Act (UCITA) at the Institute’s annual meeting in San Francisco in May, but will not have votes on it. The proposed statute is then scheduled to be completed and promulgated at the annual meeting of the Conference in Denver this summer. It will be targeted by the Conference for immediate introduction and enactment beginning this fall in the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The Conference believes that UCITA can provide a framework in which sound business practices may further evolve in the marketplace bounded by standards of appropriate public policy.

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