Uniform Commercial Code and UCITA

Essay by grimesyUniversity, Bachelor'sA+, July 2004

download word file, 2 pages 4.3

1. What was one of the first, and most significant, of the U.S. government's attempt to promote

uniformity in commercial laws from state to state?

I think the most significant attempt to promote uniformity in commercial laws from state

to state was the "commerce clause", which is found in article 1, section 8 of the U.S.

constitution. Two key factors in section 8 are;

A. "To regulate Commerce with foreign Nations, and among the several States, and with the

Indian Tribes".

B. "To establish a uniform Rule of Naturalization, and uniform Laws on the subject of

Bankruptcies throughout the United States".

2. Based on the information presented above, what do you see as the major differences you

see between Article 2 of the Uniform Commercial Code and UCITA?

The computer information transactions involve licenses, not sales. It also extends easily

to sales of computers and computer peripherals. UCITA was initially proposed as an

amendment to the Uniform Commercial Code.

The UCC, article 2 involves sales among

other issues. These rules are to govern commercial transactions. Article 2 is also applied by

federal courts to sales contracts governed by federal law. (Henry R. Cheeseman, Fourth

Edition, 2004).

3. What is the legal distinction between selling a product and licensing it?

The difference between selling and licensing is significant. The sale of a physical copy of

a work has been the dominant model for transferring the individual product to the consumer.

Sales involve the complete transfer of ownership rights in the copy. Copyright law explicitly

anticipates the sale of intellectual property products and, by the 'first sale rule,' constrains a

copyright holder's rights in copies of the work that have been sold. For example, the

purchaser is free to lend, rent, or resell the purchased copy. Licensing, however, constitutes

a limited transfer of rights to use an item on stated terms and conditions. Licenses are

governed by contract law and, as such, are essentially a private agreement between two

parties. That agreement can involve a wide range of terms and conditions, and need not

incorporate any public policy considerations, beyond some basic limits on what constitutes

an enforceable contract.

4. Many of the provisions in the UCITA were first proposed as a modification to Article 2

of the UCC. Why do you think the drafters decided to propose it as a separate and distinct

uniform act?

Information technology accounts for huge share of the nation's economy and is the most

rapidly expanding component of our economy. Until UCITA, there has been no contract

law that provides clear, consistent uniform rules for the intangibles subject matter involved

in computer information transactions in Internet and elsewhere and no uniform law

developed to provide substantive guidance for these transactions. UCITA will make it

possible for states to provide a neutral and predictable legal framework for transactions in

computer information in Internet and in other transactional contexts, and for states to

provide greater legal certainty for millions of transactions occurring daily.