Uniformity, Choice of Law and Software Sales
- Author(s): Bruce Kobayashi, Larry Ribstein
- Date Posted: 2000
- Law & Economics #: 00-07
- Availability: Full text (most recent) on SSRN
This article examines the ongoing controversy over the Uniform Computer Information Transactions Act (UCITA) which has been adopted by the National Conference of Commissioners on Uniform State Laws (NCCUSL). The Act emerged after opposition to a new Article 2B of the Uniform Commercial Code (UCC 2B) led to the withdrawal of the American Law Institute from its joint project with NCCUSL. This article argues that the debate over particular terms focuses on the wrong issues and may ultimately be of little consequence. The important issues concern the forces of jurisdictional competition and the role of choice of law. We argue that the law should facilitate the parties' ability to choose the governing law rather than being forced to accept a single uniform law that emerges from an imperfect political process. Moreover, whatever NCCUSL or the ALI decide to do, jurisdictional competition is likely to play an important role in shaping the law. States interested in attracting and retaining information technology companies can pass statutes that favor freedom of contract and enforcement of computer software licenses. If adoption of a single standard proves to be desirable, firms will tend to move toward this standard even if state laws differ and the "uniform" law is adopted in only a few states.