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News Release
January 8, 2003
CONTACT: David Fish
(202) 289-8928

2003 Digital 'To-Do' Item for States:

Lassman Says Model Law Would Enhance Digital Commerce

WASHINGTON, D.C. - In order to boost the technology sector and enhance the development of digital commerce, states should follow the lead of Virginia and Maryland and adopt the Uniform Computer Information Transactions Act (UCITA) as soon as possible. That is the conclusion of a new study by Progress & Freedom Foundation research fellow Kent Lassman.

“On balance, widespread adoption of UCITA would benefit consumers, producers, and the digital economy generally,” Lassman writes. “It would enhance overall welfare by reducing information and transaction costs in the exchange of informational goods and services, as compared with the current legal regime.”

The model law, already under consideration in seven additional states, is the product of the National Conference of Commissioners of Uniform State Laws, the same organization that developed the Uniform Commercial Code. Just as the UCC was developed to update contract law for the industrial age, “UCITA is designed to modernize contract law in response to the demands of commerce in the digital age,” Lassman writes. “The existing UCC does not provide and adequate foundation for the efficient exchange of rights for the digital goods increasingly seen in the marketplace.”

According to Lassman, there are special contracting problems associated with licensing computer information products – software, databases, online access and computer information product components of traditional goods – and the current legal framework is “murky”. UCITA provides “a comprehensive framework within which licenses can be drafted, analyzed and enforced.” The Act “does not impinge on the ability of parties to a contract to define their own terms,” but “consists of default rules and definitions to fill gaps in contracts…”

Lassman, who directs PFF’s Digital Policy Network, is the author of the annual Digital State Survey.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation