Just a little refresher...  UCITA or the Uniform Computer Information Transactions Act was originally intended as a UCC amendment (Article 2B), because it wasn't then clear (and still isn't) whether software is "goods" for the purposes of UCC Article 2.  In my opinion, it is--for example, a warranty of non-infringement and fitness for particular purpose apply as easily to software as they do for goods.  Anyway, that's a different story--back to UCITA.

A few years ago, the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Law Institute (ALI), who regularly partner on UCC drafting, got the bright idea to come up with a new UCC Article to cover software and some other technology stuff.  Well, the draft amendment was so crappy, outrageous, and one-sided for vendors that ALI quickly withdrew from the project.  If ALI withdraws from a project, that's a pretty good sign in and of itself that the associated work product is crap.

Among other things, UCITA permitted software publishers to: remotely shut down an organization's mission-critical software without court approval and without liability; bail without liability if their software infringed a third party’s proprietary rights; reveal software use restrictions AFTER purchase; change the terms of the contract AFTER purchase; shield themselves from liability for known defects in the software; prohibit the transfer of software from one person to another or from one company to another, even in the course of a merger or acquisition; etc., etc.

So, after ALI wouldn’t allow their name to be attached to the crazy proposed UCC amendment, NCCUSL, refusing to give up after investing so much time and effort into the crapola they drafted, stupidly forged ahead and repackaged the proposed amendment as the Uniform Computer Information Transactions Act (and put a pretty little bow on top).  Does "lipstick on a pig" sound familiar?

NCCUSL proceeded to try and force UCITA down the throats of each state, spending huge amounts of money to do so.  Come on NCCUSL guys, was saving face that important!?

NCCUSL did, surprisingly, strong-arm Maryland and Virginia (in the heady days of the dot.com era) to adopt UCITA.  The two states were naive enough to believe that the vendor-friendly UCITA would prompt more tech vendors to relocate to Maryland and

Virginia.  Well, that vision of clean industry and new taxes fizzled.  If anything, more tech jobs have left the two states since UCITA was adopted there.

There are some hanger-on software publishers with their businesses still located in Virginia and Maryland (mostly patent trolls) and some software publishers not located in those states try to invoke UCITA through choice of law, so BE CAREFUL

when a software license specifies a choice of law of Virginia or Maryland in their software license agreements.  That's a ploy to invoke UCITA to cover your deal. Some states, smart enough to not adopt UCITA because they knew how anti-consumer it

was, have actually enacted what's called "bomb shelter legislation" to keep UCITA at bay and to protect that state’s consumers.  Hooray for the smart legislators in those states!!!

Iowa is one state that passed anti-UCITA bomb shelter legislation.  In short, it reads, "[This] provision makes voidable any choice-of-law provision that provides that the contract is to be interpreted pursuant to the laws of a state that has enacted

the uniform computer information transactions act…”  That's what I'm talking about!

Something I thought was extremely funny and ironic was a 2006 software license that I came across between the Commonwealth of Virginia and Cognos Software.  The contract expressly excluded UCITA, as I have reproduced here: “THE UNIFORM COMPUTER INFORMATION TRANSACTION ACT (UCITA) SHALL NOT APPLY TO THIS AGREEMENT. For the convenience of the parties, there will be an individual Software License Agreement…”  That’s so funny!  Why would the state that adopted UCITA expressly exclude it from a software license if UCITA was so good for everyone?  Apparently, what the state thinks is good for you isn't so good for them.

The good news is that UCITA is basically dead, and NCCUSL has found something else to keep themselves busy with.  Do you still have to worry about which states adopted UCITA, what states adopted UCITA bomb shelter legislation, etc.?  NO!  Just put the following in your software license contract template's governing law provision, and you won't have to worry about losing your job over UCITA:

“Notwithstanding the foregoing, the parties agree that the Uniform Computer Information Transactions Act (UCITA) as enacted in any Commonwealth or State of the United States shall not apply to this Agreement or any performance hereunder and the

parties expressly opt-out of the applicability of UCITA to this Agreement.”

That's another example of why having your own contract templates is so, so critical!  Check out my new book for other contract template tricks and traps: http://www.lulu.com/content/1718685.  This book "The Contract Negotiation Handbook: An Indispensable Guide for Contract Professionals," contains a sample contract template and explains how key provisions make a deal more favorable for you.  Don't negotiate without it!