[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
91_SB1309
LRB9110043MWgc
1 AN ACT to create the Uniform Computer Information
2 Transactions Act.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 PART 1
6 GENERAL PROVISIONS
7 SUBPART A. SHORT TITLE AND DEFINITIONS
8 Section 101. Short title. This Act may be cited as the
9 Uniform Computer Information Transactions Act.
10 Section 102. Definitions.
11 (a) In this Act:
12 (1) "Access contract" means a contract to obtain by
13 electronic means access to, or information from, an
14 information processing system of another person, or the
15 equivalent of such access.
16 (2) "Access material" means any information or
17 material, such as a document, address, or access code,
18 that is necessary to obtain authorized access to
19 information or control or possession of a copy.
20 (3) "Aggrieved party" means a party entitled to a
21 remedy for breach of contract.
22 (4) "Agreement" means the bargain of the parties in
23 fact as found in their language or by implication from
24 other circumstances, including course of performance,
25 course of dealing, and usage of trade as provided in this
26 Act.
27 (5) "Attribution procedure" means a procedure to
28 verify that an electronic authentication, display,
29 message, record, or performance is that of a particular
30 person or to detect changes or errors in information.
-2- LRB9110043MWgc
1 The term includes a procedure that requires the use of
2 algorithms or other codes, identifying words or numbers,
3 encryption, or callback or other acknowledgment.
4 (6) "Authenticate" means:
5 (A) to sign; or
6 (B) with the intent to sign a record,
7 otherwise to execute or adopt an electronic symbol,
8 sound, message, or process referring to, attached
9 to, included in, or logically associated or linked
10 with, that record.
11 (7) "Automated transaction" means a transaction in
12 which a contract is formed in whole or part by electronic
13 actions of one or both parties which are not previously
14 reviewed by an individual in the ordinary course.
15 (8) "Cancellation" means the ending of a contract
16 by a party because of breach of contract by another
17 party.
18 (9) "Computer" means an electronic device that
19 accepts information in digital or similar form and
20 manipulates it for a result based on a sequence of
21 instructions.
22 (10) "Computer information" means information in
23 electronic form which is obtained from or through the use
24 of a computer or which is in a form capable of being
25 processed by a computer. The term includes a copy of the
26 information and any documentation or packaging associated
27 with the copy.
28 (11) "Computer information transaction" means an
29 agreement or the performance of it to create, modify,
30 transfer, or license computer information or
31 informational rights in computer information. The term
32 includes a support contract under Section 612. The term
33 does not include a transaction merely because the
34 parties' agreement provides that their communications
-3- LRB9110043MWgc
1 about the transaction will be in the form of computer
2 information.
3 (12) "Computer program" means a set of statements
4 or instructions to be used directly or indirectly in a
5 computer to bring about a certain result. The term does
6 not include separately identifiable informational
7 content.
8 (13) "Consequential damages" resulting from breach
9 of contract includes (i) any loss resulting from general
10 or particular requirements and needs of which the
11 breaching party at the time of contracting had reason to
12 know and which could not reasonably be prevented and (ii)
13 any injury to an individual or damage to property other
14 than the subject matter of the transaction proximately
15 resulting from breach of warranty. The term does not
16 include direct damages or incidental damages.
17 (14) "Conspicuous", with reference to a term, means
18 so written, displayed, or presented that a reasonable
19 person against which it is to operate ought to have
20 noticed it. A term in an electronic record intended to
21 evoke a response by an electronic agent is conspicuous if
22 it is presented in a form that would enable a reasonably
23 configured electronic agent to take it into account or
24 react to it without review of the record by an
25 individual. Conspicuous terms include the following:
26 (A) with respect to a person:
27 (i) a heading in capitals in a size equal
28 to or greater than, or in contrasting type,
29 font, or color to, the surrounding text;
30 (ii) language in the body of a record or
31 display in larger or other contrasting type,
32 font, or color or set off from the surrounding
33 text by symbols or other marks that draw
34 attention to the language; and
-4- LRB9110043MWgc
1 (iii) a term prominently referenced in an
2 electronic record or display which is readily
3 accessible or reviewable from the record or
4 display; and
5 (B) with respect to a person or an electronic
6 agent, a term or reference to a term that is so
7 placed in a record or display that the person or
8 electronic agent cannot proceed without taking
9 action with respect to the particular term or
10 reference.
11 (15) "Consumer" means an individual who is a
12 licensee of information or informational rights that the
13 individual at the time of contracting intended to be used
14 primarily for personal, family, or household purposes.
15 The term does not include an individual who is a licensee
16 primarily for professional or commercial purposes,
17 including agriculture, business management, and
18 investment management other than management of the
19 individual's personal or family investments.
20 (16) "Consumer contract" means a contract between a
21 merchant licensor and a consumer.
22 (17) "Contract" means the total legal obligation
23 resulting from the parties' agreement as affected by this
24 Act and other applicable law.
25 (18) "Contract fee" means the price, fee, rent, or
26 royalty payable in a contract under this Act or any part
27 of the amount payable.
28 (19) "Contractual use term" means an enforceable
29 term that defines or limits the use, disclosure of, or
30 access to licensed information or informational rights,
31 including a term that defines the scope of a license.
32 (20) "Copy" means the medium on which information
33 is fixed on a temporary or permanent basis and from which
34 it can be perceived, reproduced, used, or communicated,
-5- LRB9110043MWgc
1 either directly or with the aid of a machine or device.
2 (21) "Course of dealing" means a sequence of
3 previous conduct between the parties to a particular
4 transaction which establishes a common basis of
5 understanding for interpreting their expressions and
6 other conduct.
7 (22) "Course of performance" means repeated
8 performances, under a contract that involves repeated
9 occasions for performance, which are accepted or
10 acquiesced in without objection by a party having
11 knowledge of the nature of the performance and an
12 opportunity to object to it.
13 (23) "Court" includes an arbitration or other
14 dispute-resolution forum if the parties have agreed to
15 use of that forum or its use is required by law.
16 (24) "Delivery", with respect to a copy, means the
17 voluntary physical or electronic transfer of possession
18 or control.
19 (25) "Direct damages" means compensation for losses
20 measured by Section 808(b)(1) or 809(a)(1). The term does
21 not include consequential damages or incidental damages.
22 (26) "Electronic" means relating to technology
23 having electrical, digital, magnetic, wireless, optical,
24 electromagnetic, or similar capabilities.
25 (27) "Electronic agent" means a computer program,
26 or electronic or other automated means, used by a person
27 to initiate an action, or to respond to electronic
28 messages or performances, on the person's behalf without
29 review or action by an individual at the time of the
30 action or response to the message or performance.
31 (28) "Electronic message" means a record or display
32 that is stored, generated, or transmitted by electronic
33 means for the purpose of communication to another person
34 or electronic agent.
-6- LRB9110043MWgc
1 (29) "Financial accommodation contract" means an
2 agreement under which a person extends a financial
3 accommodation to a licensee and which does not create a
4 security interest governed by Article 9 of the Uniform
5 Commercial Code. The agreement may be in any form,
6 including a license or lease.
7 (30) "Financial services transaction" means an
8 agreement that provides for, or a transaction that is, or
9 entails access to, use, transfer, clearance, settlement,
10 or processing of:
11 (A) a deposit, loan, funds, or monetary value
12 represented in electronic form and stored or capable
13 of storage by electronic means and retrievable and
14 transferable by electronic means, or other right to
15 payment to or from a person;
16 (B) an instrument or other item;
17 (C) a payment order, credit card transaction,
18 debit card transaction, funds transfer, automated
19 clearing house transfer, or similar wholesale or
20 retail transfer of funds;
21 (D) a letter of credit, document of title,
22 financial asset, investment property, or similar
23 asset held in a fiduciary or agency capacity; or
24 (E) related identifying, verifying,
25 access-enabling, authorizing, or monitoring
26 information.
27 (31) "Financier" means a person that provides a
28 financial accommodation to a licensee under a financial
29 accommodation contract and either (i) becomes a licensee
30 for the purpose of transferring or sublicensing the
31 license to the party to which the financial accommodation
32 is provided or (ii) obtains a contractual right under the
33 financial accommodation contract to preclude the
34 licensee's use of the information or informational rights
-7- LRB9110043MWgc
1 under a license in the event of breach of the financial
2 accommodation contract. The term does not include a
3 person that selects, creates, or supplies the information
4 that is the subject of the license, owns the
5 informational rights in the information, or provides
6 support for, modifications to, or maintenance of the
7 information.
8 (32) "Good faith" means honesty in fact and the
9 observance of reasonable commercial standards of fair
10 dealing.
11 (33) "Goods" means all things that are movable at
12 the time relevant to the computer information
13 transaction. The term includes the unborn young of
14 animals, growing crops, and other identified things to be
15 severed from realty which are covered by Section 2-107 of
16 the Uniform Commercial Code. The term does not include
17 computer information, money, the subject matter of
18 foreign exchange transactions, documents, letters of
19 credit, letter-of-credit rights, instruments, investment
20 property, accounts, chattel paper, deposit accounts, or
21 general intangibles.
22 (34) "Incidental damages" resulting from breach of
23 contract:
24 (A) means compensation for any commercially
25 reasonable charges, expenses, or commissions
26 reasonably incurred by an aggrieved party with
27 respect to:
28 (i) inspection, receipt, transmission,
29 transportation, care, or custody of identified
30 copies or information that is the subject of
31 the breach;
32 (ii) stopping delivery, shipment, or
33 transmission;
34 (iii) effecting cover or retransfer of
-8- LRB9110043MWgc
1 copies or information after the breach;
2 (iv) other efforts after the breach to
3 minimize or avoid loss resulting from the
4 breach; and
5 (v) matters otherwise incident to the
6 breach; and
7 (B) does not include consequential damages or
8 direct damages.
9 (35) "Information" means data, text, images,
10 sounds, mask works, or computer programs, including
11 collections and compilations of them.
12 (36) "Information processing system" means an
13 electronic system for creating, generating, sending,
14 receiving, storing, displaying, or processing
15 information.
16 (37) "Informational content" means information that
17 is intended to be communicated to or perceived by an
18 individual in the ordinary use of the information, or the
19 equivalent of that information.
20 (38) "Informational rights" include all rights in
21 information created under laws governing patents,
22 copyrights, mask works, trade secrets, trademarks,
23 publicity rights, or any other law that gives a person,
24 independently of contract, a right to control or preclude
25 another person's use of or access to the information on
26 the basis of the rights holder's interest in the
27 information.
28 (39) "Knowledge", with respect to a fact, means
29 actual knowledge of the fact.
30 (40) "License" means a contract that authorizes
31 access to, or use, distribution, performance,
32 modification, or reproduction of, information or
33 informational rights, but expressly limits the access or
34 uses authorized or expressly grants fewer than all rights
-9- LRB9110043MWgc
1 in the information, whether or not the transferee has
2 title to a licensed copy. The term includes an access
3 contract, a lease of a computer program, and a
4 consignment of a copy. The term does not include a
5 reservation or creation of a security interest to the
6 extent the interest is governed by Article 9 of the
7 Uniform Commercial Code.
8 (41) "Licensee" means a person entitled by
9 agreement to acquire or exercise rights in, or to have
10 access to or use of, computer information under an
11 agreement to which this Act applies. A licensor is not a
12 licensee with respect to rights reserved to it under the
13 agreement.
14 (42) "Licensor" means a person obligated by
15 agreement to transfer or create rights in, or to give
16 access to or use of, computer information or
17 informational rights in it under an agreement to which
18 this Act applies. Between the provider of access and a
19 provider of the informational content to be accessed, the
20 provider of content is the licensor. In an exchange of
21 information or informational rights, each party is a
22 licensor with respect to the information, informational
23 rights, or access it gives.
24 (43) "Mass-market license" means a standard form
25 used in a mass-market transaction.
26 (44) "Mass-market transaction" means a transaction
27 that is:
28 (A) a consumer contract; or
29 (B) any other transaction with an end-user
30 licensee if:
31 (i) the transaction is for information or
32 informational rights directed to the general
33 public as a whole, including consumers, under
34 substantially the same terms for the same
-10- LRB9110043MWgc
1 information;
2 (ii) the licensee acquires the
3 information or informational rights in a retail
4 transaction under terms and in a quantity
5 consistent with an ordinary transaction in a
6 retail market; and
7 (iii) the transaction is not:
8 (I) a contract for redistribution or
9 for public performance or public display
10 of a copyrighted work;
11 (II) a transaction in which the
12 information is customized or otherwise
13 specially prepared by the licensor for the
14 licensee, other than minor customization
15 using a capability of the information
16 intended for that purpose;
17 (III) a site license; or
18 (IV) an access contract.
19 (45) "Merchant" means a person:
20 (A) that deals in information or informational
21 rights of the kind involved in the transaction;
22 (B) that by the person's occupation holds
23 itself out as having knowledge or skill peculiar to
24 the relevant aspect of the business practices or
25 information involved in the transaction; or
26 (C) to which the knowledge or skill peculiar
27 to the practices or information involved in the
28 transaction may be attributed by the person's
29 employment of an agent or broker or other
30 intermediary that by its occupation holds itself out
31 as having the knowledge or skill.
32 (46) "Nonexclusive license" means a license that
33 does not preclude the licensor from transferring to other
34 licensees the same information, informational rights, or
-11- LRB9110043MWgc
1 contractual rights within the same scope. The term
2 includes a consignment of a copy.
3 (47) "Notice" of a fact means knowledge of the
4 fact, receipt of notification of the fact, or reason to
5 know the fact exists.
6 (48) "Notify", or "give notice", means to take such
7 steps as may be reasonably required to inform the other
8 person in the ordinary course, whether or not the other
9 person actually comes to know of it.
10 (49) "Party" means a person that engages in a
11 transaction or makes an agreement under this Act.
12 (50) "Person" means an individual, corporation,
13 business trust, estate, trust, partnership, limited
14 liability company, association, joint venture,
15 governmental subdivision, instrumentality, or agency,
16 public corporation, or any other legal or commercial
17 entity.
18 (51) "Published informational content" means
19 informational content prepared for or made available to
20 recipients generally, or to a class of recipients, in
21 substantially the same form. The term does not include
22 informational content that is:
23 (A) customized for a particular recipient by
24 one or more individuals acting as or on behalf of
25 the licensor, using judgment or expertise; or
26 (B) provided in a special relationship of
27 reliance between the provider and the recipient.
28 (52) "Receipt" means:
29 (A) with respect to a copy, taking delivery;
30 or
31 (B) with respect to a notice:
32 (i) coming to a person's attention; or
33 (ii) being delivered to and available at
34 a location or system designated by agreement
-12- LRB9110043MWgc
1 for that purpose or, in the absence of an
2 agreed location or system:
3 (I) being delivered at the person's
4 residence, or the person's place of
5 business through which the contract was
6 made, or at any other place held out by
7 the person as a place for receipt of
8 communications of the kind; or
9 (II) in the case of an electronic
10 notice, coming into existence in an
11 information processing system or at an
12 address in that system in a form capable
13 of being processed by or perceived from a
14 system of that type by a recipient, if the
15 recipient uses, or otherwise has
16 designated or holds out, that place or
17 system for receipt of notices of the kind
18 to be given and the sender does not know
19 that the notice cannot be accessed from
20 that place.
21 (53) "Receive" means to take receipt.
22 (54) "Record" means information that is inscribed
23 on a tangible medium or that is stored in an electronic
24 or other medium and is retrievable in perceivable form.
25 (55) "Release" means an agreement by a party not to
26 object to, or exercise any rights or pursue any remedies
27 to limit, the use of information or informational rights
28 which agreement does not require an affirmative act by
29 the party to enable or support the other party's use of
30 the information or informational rights. The term
31 includes a waiver of informational rights.
32 (56) "Return", with respect to a record containing
33 contractual terms that were rejected, refers only to the
34 computer information and means:
-13- LRB9110043MWgc
1 (A) in the case of a licensee that rejects a
2 record regarding a single information product
3 transferred for a single contract fee, a right to
4 reimbursement of the contract fee paid from the
5 person to which it was paid or from another person
6 that offers to reimburse that fee, on:
7 (i) submission of proof of purchase; and
8 (ii) proper redelivery of the computer
9 information and all copies within a reasonable
10 time after initial delivery of the information
11 to the licensee;
12 (B) in the case of a licensee that rejects a
13 record regarding an information product provided as
14 part of multiple information products integrated
15 into and transferred as a bundled whole but
16 retaining their separate identity:
17 (i) a right to reimbursement of any
18 portion of the aggregate contract fee
19 identified by the licensor in the initial
20 transaction as charged to the licensee for all
21 bundled information products which was actually
22 paid, on:
23 (I) rejection of the record before
24 or during the initial use of the bundled
25 product;
26 (II) proper redelivery of all
27 computer information products in the
28 bundled whole and all copies of them
29 within a reasonable time after initial
30 delivery of the information to the
31 licensee; and
32 (III) submission of proof of
33 purchase; or
34 (ii) a right to reimbursement of any
-14- LRB9110043MWgc
1 separate contract fee identified by the
2 licensor in the initial transaction as charged
3 to the licensee for the separate information
4 product to which the rejected record applies,
5 on:
6 (I) submission of proof of purchase;
7 and
8 (II) proper redelivery of that
9 computer information product and all
10 copies within a reasonable time after
11 initial delivery of the information to the
12 licensee; or
13 (C) in the case of a licensor that rejects a
14 record proposed by the licensee, a right to proper
15 redelivery of the computer information and all
16 copies from the licensee, to stop delivery or access
17 to the information by the licensee, and to
18 reimbursement from the licensee of amounts paid by
19 the licensor with respect to the rejected record, on
20 reimbursement to the licensee of contract fees that
21 it paid with respect to the rejected record, subject
22 to recoupment and setoff.
23 (57) "Scope", with respect to terms of a license,
24 means:
25 (A) the licensed copies, information, or
26 informational rights involved;
27 (B) the use or access authorized, prohibited,
28 or controlled;
29 (C) the geographic area, market, or location;
30 or
31 (D) the duration of the license.
32 (58) "Seasonable", with respect to an act, means
33 taken within the time agreed or, if no time is agreed,
34 within a reasonable time.
-15- LRB9110043MWgc
1 (59) "Send" means, with any costs provided for and
2 properly addressed or directed as reasonable under the
3 circumstances or as otherwise agreed, to deposit a record
4 in the mail or with a commercially reasonable carrier, to
5 deliver a record for transmission to or re-creation in
6 another location or information processing system, or to
7 take the steps necessary to initiate transmission to or
8 re-creation of a record in another location or
9 information processing system. In addition, with respect
10 to an electronic message, the message must be in a form
11 capable of being processed by or perceived from a system
12 of the type the recipient uses or otherwise has
13 designated or held out as a place for the receipt of
14 communications of the kind sent. Receipt within the time
15 in which it would have arrived if properly sent, has the
16 effect of a proper sending.
17 (60) "Standard form" means a record or a group of
18 related records containing terms prepared for repeated
19 use in transactions and so used in a transaction in which
20 there was no negotiated change of terms by individuals
21 except to set the price, quantity, method of payment,
22 selection among standard options, or time or method of
23 delivery.
24 (61) "State" means a State of the United States,
25 the District of Columbia, Puerto Rico, the Unites States
26 Virgin Islands, or any territory or insular possession
27 subject to the jurisdiction of the United States.
28 (62) "Term", with respect to an agreement, means
29 that portion of the agreement which relates to a
30 particular matter.
31 (63) "Termination" means the ending of a contract
32 by a party pursuant to a power created by agreement or
33 law otherwise than because of breach of contract.
34 (64) "Transfer":
-16- LRB9110043MWgc
1 (A) with respect to a contractual interest,
2 includes an assignment of the contract, but does not
3 include an agreement merely to perform a contractual
4 obligation or to exercise contractual rights through
5 a delegate or sublicensee; and
6 (B) with respect to computer information,
7 includes a sale, license, or lease of a copy of the
8 computer information and a license or assignment of
9 informational rights in computer information.
10 (65) "Usage of trade" means any practice or method
11 of dealing that has such regularity of observance in a
12 place, vocation, or trade as to justify an expectation
13 that it will be observed with respect to the transaction
14 in question.
15 (b) The following definitions in the Uniform Commercial
16 Code apply to this Act:
17 (1) "Burden of establishing" Section 1-201.
18 (2) "Document of title" Section 1-201.
19 (3) "Financial asset" Section 8-102(a)(9).
20 (4) "Funds transfer" Section 4A-104.
21 (5) "Identification" to the contract Section 2-501.
22 (6) "Instrument" Section 9-105(i).
23 (7) "Investment property" Section 9-115(f).
24 (8) "Item" Section 4-104.
25 (9) "Letter of credit" Section 5-102.
26 (10) "Payment order" Section 4A-103.
27 (11) "Sale" Section 2-106.
28 SUBPART B. GENERAL SCOPE AND TERMS
29 Section 103. Scope; exclusions.
30 (a) This Act applies to computer information
31 transactions.
32 (b) Except as otherwise provided in subsection (d) and
-17- LRB9110043MWgc
1 Section 104, if a computer information transaction includes
2 subject matter other than computer information, the following
3 rules apply:
4 (1) If a transaction includes computer information
5 and goods, this Act applies to the part of the
6 transaction involving computer information, informational
7 rights in it, and creation or modification of it.
8 However, if a copy of a computer program is contained in
9 and sold or leased as part of goods, this Act applies to
10 the copy and the computer program only if:
11 (A) the goods are a computer or computer
12 peripheral; or
13 (B) giving the buyer or lessee of the goods
14 access to or use of the program is ordinarily a
15 material purpose of transactions in goods of the
16 type sold or leased.
17 (2) In all cases not involving goods, this Act
18 applies only to the part of the transaction involving
19 computer information, informational rights in it, and
20 creation or modification of it, unless the computer
21 information and informational rights, or access to them,
22 is the primary subject matter, in which case this Act
23 applies to the entire transaction.
24 (c) To the extent of a conflict between this Act and
25 Article 9 of the Uniform Commercial Code, Article 9 governs.
26 (d) This Act does not apply to:
27 (1) a financial services transaction;
28 (2) a contract to create, perform or perform in,
29 include information in, acquire, use, distribute, modify,
30 reproduce, have access to, adapt, make available,
31 transmit, license, or display:
32 (A) audio or visual programming that is
33 provided by broadcast, satellite, or cable as
34 defined or used in the Federal Communications Act
-18- LRB9110043MWgc
1 and related regulations as they existed on July 1,
2 1999, or by similar methods of delivering that
3 programming; or
4 (B) a motion picture, sound recording, musical
5 work, or phonorecord as defined or used in Title 17
6 of the United States Code as of July 1, 1999, or an
7 enhanced sound recording.
8 (3) a compulsory license; or
9 (4) a contract of employment of an individual, other
10 than an individual hired as an independent contractor to
11 create or modify computer information;
12 (5) a contract that does not require that
13 information be furnished as computer information or in
14 which under the agreement the form of the information as
15 computer information is otherwise insignificant with
16 respect to the primary subject matter of the part of the
17 transaction pertaining to the information; or
18 (6) subject matter within the scope of Article 3, 4,
19 4A, 5, 6, 7, or 8 of the Uniform Commercial Code.
20 (e) As used in subsection (d)(2)(B), "enhanced sound
21 recording" means a separately identifiable product or service
22 the dominant character of which consists of recorded sounds
23 but which includes (i) statements or instructions whose
24 purpose is to allow or control the perception, reproduction,
25 or communication of those sounds or (ii) other information so
26 long as recorded sounds constitute the dominant character of
27 the product or service despite the inclusion of the other
28 information.
29 Section 104. Mixed transactions: agreement to opt-in or
30 opt-out. The parties may agree that this Act, including
31 contract-formation rules, governs the transaction, in whole
32 or part, or that other law governs the transaction and this
33 Act does not apply, if a material part of the subject matter
-19- LRB9110043MWgc
1 to which the agreement applies is computer information or
2 informational rights in it that are within the scope of this
3 Act, or is subject matter within this Act under Section
4 103(b), or is subject matter excluded by Section 103(d)(1) or
5 (2). However, any agreement to do so is subject to the
6 following rules:
7 (1) An agreement that this Act governs a
8 transaction does not alter the applicability of any rule
9 or procedure that may not be varied by agreement of the
10 parties or that may be varied only in a manner specified
11 by the rule or procedure, including a consumer protection
12 statute or administrative rule. In addition, in a
13 mass-market transaction, the agreement does not alter the
14 applicability of a law applicable to a copy of
15 information in printed form.
16 (2) An agreement that this Act does not govern a
17 transaction:
18 (A) does not alter the applicability of Section
19 214 or 816; and
20 (B) in a mass-market transaction, does not
21 alter the applicability under this Act of the
22 doctrine of unconscionability or fundamental public
23 policy or the obligation of good faith.
24 (3) In a mass-market transaction, any term under
25 this Section which changes the extent to which this Act
26 governs the transaction must be conspicuous.
27 (4) A copy of a computer program contained in and
28 sold or leased as part of goods and which is excluded
29 from this Act by Section 103(b)(1) cannot provide the
30 basis for an agreement under this Section that this Act
31 governs the transaction.
32 Section 105. Relation to federal law; fundamental public
33 policy; transactions subject to other State law.
-20- LRB9110043MWgc
1 (a) A provision of this Act which is preempted by
2 federal law is unenforceable to the extent of the preemption.
3 (b) If a term of a contract violates a fundamental
4 public policy, the court may refuse to enforce the contract,
5 enforce the remainder of the contract without the
6 impermissible term, or limit the application of the
7 impermissible term so as to avoid a result contrary to public
8 policy, in each case to the extent that the interest in
9 enforcement is clearly outweighed by a public policy against
10 enforcement of the term.
11 (c) Except as otherwise provided in subsection (d), if
12 this Act or a term of a contract under this Act conflicts
13 with a consumer protection statute or administrative rule,
14 the consumer protection statute or rule governs.
15 (d) If a law of this State in effect on the effective
16 date of this Act applies to a transaction governed by this
17 Act, the following rules apply:
18 (1) A requirement that a term, waiver, notice, or
19 disclaimer be in a writing is satisfied by a record.
20 (2) A requirement that a record, writing, or term
21 be signed is satisfied by an authentication.
22 (3) A requirement that a term be conspicuous, or
23 the like, is satisfied by a term that is conspicuous
24 under this Act.
25 (4) A requirement of consent or agreement to a term
26 is satisfied by a manifestation of assent to the term in
27 accordance with this Act.
28 (e) The following laws govern in the case of a conflict
29 between this Act and the other law:
30 The Electronic Commerce Security Act.
31 Section 106. Rules of construction.
32 (a) This Act must be liberally construed and applied to
33 promote its underlying purposes and policies to:
-21- LRB9110043MWgc
1 (1) support and facilitate the realization of the
2 full potential of computer information transactions;
3 (2) clarify the law governing computer information
4 transactions;
5 (3) enable expanding commercial practice in computer
6 information transactions by commercial usage and
7 agreement of the parties; and
8 (4) promote uniformity of the law with respect to
9 the subject matter of this Act among States that enact
10 it.
11 (b) Except as otherwise provided in Section 113(a), the
12 use of mandatory language or the absence of a phrase such as
13 "unless otherwise agreed" in a provision of this Act does not
14 preclude the parties from varying the effect of the provision
15 by agreement.
16 (c) The fact that a provision of this Act imposes a
17 condition for a result does not by itself mean that the
18 absence of that condition yields a different result.
19 (d) To be enforceable, a term need not be conspicuous,
20 negotiated, or expressly assented or agreed to, unless this
21 Act expressly so requires.
22 Section 107. Legal recognition of electronic record and
23 authentication; use of electronic agents.
24 (a) A record or authentication may not be denied legal
25 effect or enforceability solely because it is in electronic
26 form.
27 (b) This Act does not require that a record or
28 authentication be generated, stored, sent, received, or
29 otherwise processed by electronic means or in electronic
30 form.
31 (c) In any transaction, a person may establish
32 requirements regarding the type of authentication or record
33 acceptable to it.
-22- LRB9110043MWgc
1 (d) A person that uses an electronic agent that it has
2 selected for making an authentication, performance, or
3 agreement, including manifestation of assent, is bound by the
4 operations of the electronic agent, even if no individual was
5 aware of or reviewed the agent's operations or the results of
6 the operations.
7 Section 108. Proof and effect of authentication.
8 (a) Authentication may be proven in any manner,
9 including a showing that a party made use of information or
10 access that could have been available only if it engaged in
11 conduct or operations that authenticated the record or term.
12 (b) Compliance with a commercially reasonable
13 attribution procedure agreed to or adopted by the parties or
14 established by law for authenticating a record authenticates
15 the record as a matter of law.
16 Section 109. Choice of law.
17 (a) The parties in their agreement may choose the
18 applicable law. However, the choice is not enforceable in a
19 consumer contract to the extent it would vary a rule that may
20 not be varied by agreement under the law of the jurisdiction
21 whose law would apply under subsections (b) and (c) in the
22 absence of the agreement.
23 (b) In the absence of an enforceable agreement on choice
24 of law, the following rules determine which jurisdiction's
25 law governs in all respects for purposes of contract law:
26 (1) An access contract or a contract providing for
27 electronic delivery of a copy is governed by the law of
28 the jurisdiction in which the licensor was located when
29 the agreement was entered into.
30 (2) A consumer contract that requires delivery of a
31 copy on a tangible medium is governed by the law of the
32 jurisdiction in which the copy is or should have been
-23- LRB9110043MWgc
1 delivered to the consumer.
2 (3) In all other cases, the contract is governed by
3 the law of the jurisdiction having the most significant
4 relationship to the transaction.
5 (c) In cases governed by subsection (b), if the
6 jurisdiction whose law governs is outside the United States,
7 the law of that jurisdiction governs only if it provides
8 substantially similar protections and rights to a party not
9 located in that jurisdiction as are provided under this Act.
10 Otherwise, the law of the State that has the most significant
11 relationship to the transaction governs.
12 (d) For purposes of this Section, a party is located at
13 its place of business if it has one place of business, at its
14 chief executive office if it has more than one place of
15 business, or at its place of incorporation or primary
16 registration if it does not have a physical place of
17 business. Otherwise, a party is located at its primary
18 residence.
19 Section 110. Contractual choice of forum.
20 (a) The parties in their agreement may choose an
21 exclusive judicial forum unless the choice is unreasonable
22 and unjust.
23 (b) A judicial forum specified in an agreement is not
24 exclusive unless the agreement expressly so provides.
25 Section 111. Unconscionable contract or term.
26 (a) If a court as a matter of law finds a contract or a
27 term thereof to have been unconscionable at the time it was
28 made, the court may refuse to enforce the contract, enforce
29 the remainder of the contract without the unconscionable
30 term, or limit the application of the unconscionable term so
31 as to avoid an unconscionable result.
32 (b) If it is claimed or appears to the court that a
-24- LRB9110043MWgc
1 contract or term thereof may be unconscionable, the parties
2 must be afforded a reasonable opportunity to present evidence
3 as to its commercial setting, purpose, and effect to aid the
4 court in making the determination.
5 Section 112. Manifesting assent; opportunity to review.
6 (a) A person manifests assent to a record or term if the
7 person, acting with knowledge of, or after having an
8 opportunity to review the record or term or a copy of it:
9 (1) authenticates the record or term with intent to
10 adopt or accept it; or
11 (2) intentionally engages in conduct or makes
12 statements with reason to know that the other party or
13 its electronic agent may infer from the conduct or
14 statement that the person assents to the record or term.
15 (b) An electronic agent manifests assent to a record or
16 term if, after having an opportunity to review it, the
17 electronic agent:
18 (1) authenticates the record or term; or
19 (2) engages in operations that in the circumstances
20 indicate acceptance of the record or term.
21 (c) If this Act or other law requires assent to a
22 specific term, a manifestation of assent must relate
23 specifically to the term.
24 (d) Conduct or operations manifesting assent may be
25 proved in any manner, including a showing that a person or an
26 electronic agent obtained or used the information or
27 informational rights and that a procedure existed by which a
28 person or an electronic agent must have engaged in the
29 conduct or operations in order to do so. Proof of compliance
30 with subsection (a)(2) is sufficient if there is conduct that
31 assents and subsequent conduct that reaffirms assent by
32 electronic means.
33 (e) With respect to an opportunity to review, the
-25- LRB9110043MWgc
1 following rules apply:
2 (1) A person has an opportunity to review a record
3 or term only if it is made available in a manner that
4 ought to call it to the attention of a reasonable person
5 and permit review.
6 (2) An electronic agent has an opportunity to
7 review a record or term only if it is made available in
8 manner that would enable a reasonably configured
9 electronic agent to react to the record or term.
10 (3) If a record or term is available for review
11 only after a person becomes obligated to pay or begins
12 its performance, the person has an opportunity to review
13 only if it has a right to a return if it rejects the
14 record. However, a right to a return is not required if:
15 (A) the record proposes a modification of
16 contract or provides particulars of performance
17 under Section 305; or
18 (B) the primary performance is other than
19 delivery or acceptance of a copy, the agreement is
20 not a mass-market transaction, and the parties at
21 the time of contracting had reason to know that a
22 record or term would be presented after performance,
23 use, or access to the information began.
24 (4) The right to a return under paragraph (3) may
25 arise by law or by agreement.
26 (f) The effect of provisions of this Section may be
27 modified by an agreement setting out standards applicable to
28 future transactions between the parties.
29 Section 113. Variation by agreement; commercial
30 practice.
31 (a) The effect of any provision of this Act, including
32 an allocation of risk or imposition of a burden, may be
33 varied by agreement of the parties. However, the following
-26- LRB9110043MWgc
1 rules apply:
2 (1) Obligations of good faith, diligence,
3 reasonableness, and care imposed by this Act may not be
4 disclaimed by agreement, but the parties by agreement may
5 determine the standards by which the performance of the
6 obligation is to be measured if the standards are not
7 manifestly unreasonable.
8 (2) The limitations on enforceability imposed by
9 unconscionability under Section 111 and fundamental
10 public policy under Section 105(b) may not be varied by
11 agreement.
12 (3) Limitations on enforceability of, or agreement
13 to, a contract, term, or right expressly stated in the
14 Sections listed in the following subparagraphs may not be
15 varied by agreement except to the extent provided in each
16 Section:
17 (A) the limitations on agreed choice of law in
18 Section 109(a);
19 (B) the limitations on agreed choice of forum
20 in Section 110;
21 (C) the requirements for manifesting assent
22 and opportunity for review in Section 112;
23 (D) the limitations on enforceability in
24 Section 201;
25 (E) the limitations on a mass-market license
26 in Section 209;
27 (F) the consumer defense arising from an
28 electronic error in Section 214;
29 (G) the requirements for an enforceable term
30 in Sections 303(b), 307(g), 406(b) and (c), and
31 804(a);
32 (H) the limitations on a financier in Sections
33 507 through 511;
34 (I) the restrictions on altering the period of
-27- LRB9110043MWgc
1 limitations in Section 805(a) and (b); and
2 (J) the limitations on self-help repossession
3 in Sections 815(b) and 816.
4 (b) Any usage of trade of which the parties are or
5 should be aware and any course of dealing or course of
6 performance between the parties are relevant to determining
7 the existence or meaning of an agreement.
8 Section 114. Supplemental principles; good faith;
9 decision for court; reasonable time; reason to know.
10 (a) Unless displaced by this Act, principles of law and
11 equity, including the law merchant and the common law of this
12 State relative to capacity to contract, principal and agent,
13 estoppel, fraud, misrepresentation, duress, coercion,
14 mistake, and other validating or invalidating cause,
15 supplement this Act. Among the laws supplementing and not
16 displaced by this Act are trade secret laws and unfair
17 competition laws.
18 (b) Every contract or duty within the scope of this Act
19 imposes an obligation of good faith in its performance or
20 enforcement.
21 (c) Whether a term is conspicuous or is unenforceable
22 under Section 105(a) or (b), 111, or 209(a) and whether an
23 attribution procedure is commercially reasonable or effective
24 under Section 108, 212, or 213 are questions to be determined
25 by the court.
26 (d) Whether an agreement has legal consequences is
27 determined by this Act.
28 (e) Whenever this Act requires any action to be taken
29 within a reasonable time, the following rules apply:
30 (1) What is a reasonable time for taking the action
31 depends on the nature, purpose, and circumstances of the
32 action.
33 (2) Any time that is not manifestly unreasonable
-28- LRB9110043MWgc
1 may be fixed by agreement.
2 (f) A person has reason to know a fact if the person has
3 knowledge of the fact or, from all the facts and
4 circumstances known to the person without investigation, the
5 person should be aware that the fact exists.
6 PART 2
7 FORMATION AND TERMS
8 SUBPART A. FORMATION OF CONTRACT
9 Section 201. Formal requirements.
10 (a) Except as otherwise provided in this Section, a
11 contract requiring payment of a contract fee of $5,000 or
12 more is not enforceable by way of action or defense unless:
13 (1) the party against which enforcement is sought
14 authenticated a record sufficient to indicate that a
15 contract has been formed and which reasonably identifies
16 the copy or subject matter to which the contract refers;
17 or
18 (2) the agreement is a license for an agreed
19 duration of one year or less or which may be terminated
20 at will by the party against which the contract is
21 asserted.
22 (b) A record is sufficient under subsection (a) even if
23 it omits or incorrectly states a term, but the contract is
24 not enforceable under that subsection beyond the number of
25 copies or subject matter shown in the record.
26 (c) A contract that does not satisfy the requirements of
27 subsection (a) is nevertheless enforceable under that
28 subsection if:
29 (1) a performance was tendered or the information
30 was made available by one party and the tender was
31 accepted or the information accessed by the other; or
32 (2) the party against which enforcement is sought
-29- LRB9110043MWgc
1 admits in court, by pleading or by testimony or otherwise
2 under oath, facts sufficient to indicate a contract has
3 been made, but the agreement is not enforceable under
4 this paragraph beyond the number of copies or the subject
5 matter admitted.
6 (d) Between merchants, if, within a reasonable time, a
7 record in confirmation of the contract and sufficient against
8 the sender is received and the party receiving it has reason
9 to know its contents, the record satisfies subsection (a)
10 against the party receiving it unless notice of objection to
11 its contents is given in a record within 10 days after the
12 confirming record is received.
13 (e) An agreement that the requirements of this Section
14 need not be satisfied as to future transactions is effective
15 if evidenced in a record authenticated by the person against
16 which enforcement is sought.
17 (f) A transaction within the scope of this Act is not
18 subject to a statute of frauds contained in another law of
19 this State.
20 Section 202. Formation in general.
21 (a) A contract may be formed in any manner sufficient to
22 show agreement, including offer and acceptance or conduct of
23 both parties or operations of electronic agents which
24 recognize the existence of a contract.
25 (b) If the parties so intend, an agreement sufficient to
26 constitute a contract may be found even if the time of its
27 making is undetermined, one or more terms are left open or to
28 be agreed on, the records of the parties do not otherwise
29 establish a contract, or one party reserves the right to
30 modify terms.
31 (c) Even if one or more terms are left open or to be
32 agreed upon, a contract does not fail for indefiniteness if
33 the parties intended to make a contract and there is a
-30- LRB9110043MWgc
1 reasonably certain basis for giving an appropriate remedy.
2 (d) In the absence of conduct or performance by both
3 parties to the contrary, a contract is not formed if there is
4 a material disagreement about a material term, including a
5 term concerning scope.
6 (e) If a term is to be adopted by later agreement and
7 the parties intend not to be bound unless the term is so
8 adopted, a contract is not formed if the parties do not agree
9 to the term. In that case, each party shall deliver to the
10 other party, or with the consent of the other party destroy,
11 all copies of information, access materials, and other
12 materials received or made, and each party is entitled to a
13 return with respect to any contract fee paid for which
14 performance has not been received, has not been accepted, or
15 has been redelivered without any benefit being retained. The
16 parties remain bound by any contractual use term with respect
17 to information or copies received or made from copies
18 received pursuant to the agreement and not delivered or
19 deliverable to the other party.
20 Section 203. Offer and acceptance in general. Unless
21 otherwise unambiguously indicated by the language or the
22 circumstances:
23 (1) An offer to make a contract invites acceptance
24 in any manner and by any medium reasonable under the
25 circumstances.
26 (2) An order or other offer to acquire a copy for
27 prompt or current delivery invites acceptance by either a
28 prompt promise to ship or a prompt or current shipment of
29 a conforming or nonconforming copy. However, a shipment
30 of a nonconforming copy is not an acceptance if the
31 licensor seasonably notifies the licensee that the
32 shipment is offered only as an accommodation to the
33 licensee.
-31- LRB9110043MWgc
1 (3) If the beginning of a requested performance is
2 a reasonable mode of acceptance, an offeror that is not
3 notified of acceptance or performance within a reasonable
4 time may treat the offer as having lapsed before
5 acceptance.
6 (4) If an offer in an electronic message evokes an
7 electronic message accepting the offer, a contract is
8 formed:
9 (A) when an electronic acceptance is received;
10 or
11 (B) if the response consists of beginning
12 performance, full performance, or giving access to
13 information, when the performance is received or the
14 access is enabled and necessary access materials are
15 received.
16 Section 204. Acceptance with varying terms.
17 (a) In this Section, an acceptance materially alters an
18 offer if it contains a term that materially conflicts with or
19 varies a term of the offer or that adds a material term not
20 contained in the offer.
21 (b) Except as otherwise provided in Section 205, a
22 definite and seasonable expression of acceptance operates as
23 an acceptance, even if the acceptance contains terms that
24 vary from the terms of the offer, unless the acceptance
25 materially alters the offer.
26 (c) If an acceptance materially alters the offer, the
27 following rules apply:
28 (1) A contract is not formed unless:
29 (A) a party agrees, such as by manifesting
30 assent, to the other party's offer or acceptance; or
31 (B) all the other circumstances, including the
32 conduct of the parties, establish a contract.
33 (2) If a contract is formed by the conduct of both
-32- LRB9110043MWgc
1 parties, the terms of the contract are determined under
2 Section 210.
3 (d) If an acceptance varies from but does not materially
4 alter the offer, a contract is formed based on the terms of
5 the offer. In addition, the following rules apply:
6 (1) Terms in the acceptance which conflict with
7 terms in the offer are not part of the contract.
8 (2) An additional nonmaterial term in the
9 acceptance is a proposal for an additional term. Between
10 merchants, the proposed additional term becomes part of
11 the contract unless the offeror gives notice of objection
12 before, or within a reasonable time after, it receives
13 the proposed terms.
14 Section 205. Conditional offer or acceptance.
15 (a) In this Section, an offer or acceptance is
16 conditional if it is conditioned on agreement by the other
17 party to all the terms of the offer or acceptance.
18 (b) Except as otherwise provided in subsection (c), a
19 conditional offer or acceptance precludes formation of a
20 contract unless the other party agrees to its terms, such as
21 by manifesting assent.
22 (c) If an offer and acceptance are in standard forms and
23 at least one form is conditional, the following rules apply:
24 (1) Conditional language in a standard term
25 precludes formation of a contract only if the actions of
26 the party proposing the form are consistent with the
27 conditional language, such as by refusing to perform,
28 refusing to permit performance, or refusing to accept the
29 benefits of the agreement, until its proposed terms are
30 accepted.
31 (2) A party that agrees, such as by manifesting
32 assent, to a conditional offer that is effective under
33 paragraph (1) adopts the terms of the offer under Section
-33- LRB9110043MWgc
1 208 or 209, except a term that conflicts with an
2 expressly agreed term regarding price or quantity.
3 Section 206. Offer and acceptance: electronic agents.
4 (a) A contract may be formed by the interaction of
5 electronic agents. If the interaction results in the
6 electronic agents' engaging in operations that under the
7 circumstances indicate acceptance of an offer, a contract is
8 formed, but a court may grant appropriate relief if the
9 operations resulted from fraud, electronic mistake, or the
10 like.
11 (b) A contract may be formed by the interaction of an
12 electronic agent and an individual acting on the individual's
13 own behalf or for another person. A contract is formed if
14 the individual takes an action or makes a statement that the
15 individual can refuse to take or say and that the individual
16 has reason to know will:
17 (1) cause the electronic agent to perform, provide
18 benefits, or allow the use or access that is the subject
19 of the contract, or send instructions to do so; or
20 (2) indicate acceptance, regardless of other
21 expressions or actions by the individual to which the
22 individual has reason to know the electronic agent cannot
23 react.
24 (c) The terms of a contract formed under subsection (b)
25 are determined under Section 208 or 209 but do not include a
26 term provided by the individual if the individual had reason
27 to know that the electronic agent could not react to the
28 term.
29 Section 207. Formation: releases of informational
30 rights.
31 (a) A release is effective without consideration if it
32 is:
-34- LRB9110043MWgc
1 (1) in a record to which the releasing party agrees,
2 such as by manifesting assent, and which identifies the
3 informational rights released; or
4 (2) enforceable under estoppel, implied license, or
5 other law.
6 (b) A release continues for the duration of the
7 informational rights released if the release does not specify
8 its duration and does not require affirmative performance
9 after the grant of the release by:
10 (1) the party granting the release; or
11 (2) the party receiving the release, except for
12 relatively insignificant acts.
13 (c) In cases not governed by subsection (b), the
14 duration of a release is governed by Section 308.
15 SUBPART B. TERMS OF RECORDS
16 Section 208. Adopting terms of records. Except as
17 otherwise provided in Section 209, the following rules apply:
18 (1) A party adopts the terms of a record, including
19 a standard form, as the terms of the contract if the
20 party agrees to the record, such as by manifesting
21 assent.
22 (2) The terms of a record may be adopted pursuant
23 to paragraph (1) after beginning performance or use if
24 the parties had reason to know that their agreement would
25 be represented in whole or part by a later record to be
26 agreed on and there would not be an opportunity to review
27 the record or a copy of it before performance or use
28 begins. If the parties fail to agree to the later terms
29 and did not intend to form a contract unless they so
30 agreed, Section 202(e) applies.
31 (3) If a party adopts the terms of a record, the
32 terms become part of the contract without regard to the
-35- LRB9110043MWgc
1 party's knowledge or understanding of individual terms in
2 the record, except for a term that is unenforceable
3 because it fails to satisfy another requirement of this
4 Act.
5 Section 209. Mass-market license.
6 (a) A party adopts the terms of a mass-market license
7 for purposes of Section 208 only if the party agrees to the
8 license, such as by manifesting assent, before or during the
9 party's initial performance or use of or access to the
10 information. A term is not part of the license if:
11 (1) the term is unconscionable or is unenforceable
12 under Section 105(a) or (b); or
13 (2) subject to Section 301, the term conflicts with
14 a term to which the parties to the license have expressly
15 agreed.
16 (b) If a mass-market license or a copy of the license is
17 not available in a manner permitting an opportunity to review
18 by the licensee before the licensee becomes obligated to pay
19 and the licensee does not agree, such as by manifesting
20 assent, to the license after having an opportunity to review,
21 the licensee is entitled to a return under Section 112 and,
22 in addition, to:
23 (1) reimbursement of any reasonable expenses
24 incurred in complying with the licensor's instructions
25 for returning or destroying the computer information or,
26 in the absence of instructions, expenses incurred for
27 return postage or similar reasonable expense in returning
28 the computer information; and
29 (2) compensation for any reasonable and foreseeable
30 costs of restoring the licensee's information processing
31 system to reverse changes in the system caused by the
32 installation, if:
33 (A) the installation occurs because
-36- LRB9110043MWgc
1 information must be installed to enable review of
2 the license; and
3 (B) the installation alters the system or
4 information in it but does not restore the system or
5 information after removal of the installed
6 information because the licensee rejected the
7 license.
8 (c) In a mass-market transaction, if the licensor does
9 not have an opportunity to review a record containing
10 proposed terms from the licensee before the licensor delivers
11 or becomes obligated to deliver the information, and if the
12 licensor does not agree, such as by manifesting assent, to
13 those terms after having that opportunity, the licensor is
14 entitled to a return.
15 Section 210. Terms of contract formed by conduct.
16 (a) Except as otherwise provided in subsection (b) and
17 subject to Section 301, if a contract is formed by conduct of
18 the parties, the terms of the contract are determined by
19 consideration of the terms and conditions to which the
20 parties expressly agreed, course of performance, course of
21 dealing, usage of trade, the nature of the parties' conduct,
22 the records exchanged, the information or informational
23 rights involved, the supplementary provisions of this Act,
24 and all other relevant circumstances.
25 (b) This Section does not apply if the parties
26 authenticate a record of the contract or a party agrees, such
27 as by manifesting assent, to the record containing the terms
28 of the other party.
29 Section 211. Pretransaction disclosures in Internet-type
30 transactions. This Section applies to a licensor that makes
31 its computer information available to a licensee by
32 electronic means from its Internet or similar electronic
-37- LRB9110043MWgc
1 site. In such a case, the licensor affords an opportunity to
2 review the terms of a standard form license which opportunity
3 satisfies Section 112(e) with respect to a licensee that
4 acquires the information from that site, if the licensor:
5 (1) makes the standard terms of the license readily
6 available for review by the licensee before the
7 information is delivered or the licensee becomes
8 obligated to pay, whichever occurs first, by:
9 (A) displaying prominently and in close
10 proximity to a description of the computer
11 information, or to instructions or steps for
12 acquiring it, the standard terms or a reference to
13 an electronic location from which they can be
14 readily obtained; or
15 (B) disclosing the availability of the
16 standard terms in a prominent place on the site from
17 which the computer information is offered and
18 promptly furnishing a copy of the standard terms on
19 request before the transfer of the computer
20 information; and
21 (2) does not take affirmative acts to prevent
22 printing or storage of the standard terms for archival or
23 review purposes by the licensee.
24 SUBPART C. ELECTRONIC CONTRACTS: GENERALLY
25 Section 212. Efficacy and commercial reasonableness of
26 attribution procedure. The efficacy, including the
27 commercial reasonableness, of an attribution procedure is
28 determined by the court. In making this determination, the
29 following rules apply:
30 (1) An attribution procedure established by law is
31 effective for transactions within the coverage of the
32 statute or rule.
-38- LRB9110043MWgc
1 (2) Except as otherwise provided in paragraph (1),
2 commercial reasonableness and effectiveness is determined
3 in light of the purposes of the procedure and the
4 commercial circumstances at the time the parties agreed
5 to or adopted the procedure.
6 (3) An attribution procedure may use any security
7 device or method that is commercially reasonable under
8 the circumstances.
9 Section 213. Determining attribution.
10 (a) An electronic authentication, display, message,
11 record, or performance is attributed to a person if it was
12 the act of the person or its electronic agent, or if the
13 person is bound by it under agency or other law. The party
14 relying on attribution of an electronic authentication,
15 display, message, record, or performance to another person
16 has the burden of establishing attribution.
17 (b) The act of a person may be shown in any manner,
18 including a showing of the efficacy of an attribution
19 procedure that was agreed to or adopted by the parties or
20 established by law.
21 (c) The effect of an electronic act attributed to a
22 person under subsection (a) is determined from the context at
23 the time of its creation, execution, or adoption, including
24 the parties' agreement, if any, or otherwise as provided by
25 law.
26 (d) If an attribution procedure exists to detect errors
27 or changes in an electronic authentication, display, message,
28 record, or performance, and was agreed to or adopted by the
29 parties or established by law, and one party conformed to the
30 procedure but the other party did not, and the nonconforming
31 party would have detected the change or error had that party
32 also conformed, the effect of noncompliance is determined by
33 the agreement but, in the absence of agreement, the
-39- LRB9110043MWgc
1 conforming party may avoid the effect of the error or change.
2 Section 214. Electronic error: consumer defenses.
3 (a) In this Section, "electronic error" means an error
4 in an electronic message created by a consumer using an
5 information processing system if a reasonable method to
6 detect and correct or avoid the error was not provided.
7 (b) In an automated transaction, a consumer is not bound
8 by an electronic message that the consumer did not intend and
9 which was caused by an electronic error, if the consumer:
10 (1) promptly on learning of the error:
11 (A) notifies the other party of the error; and
12 (B) causes delivery to the other party or,
13 pursuant to reasonable instructions received from
14 the other party, delivers to another person or
15 destroys all copies of the information; and
16 (2) has not used, or received any benefit or value
17 from, the information or caused the information or
18 benefit to be made available to a third party.
19 (c) If subsection (b) does not apply, the effect of an
20 electronic error is determined by other law.
21 Section 215. Electronic message: when effective; effect
22 of acknowledgment.
23 (a) Receipt of an electronic message is effective when
24 received even if no individual is aware of its receipt.
25 (b) Receipt of an electronic acknowledgment of an
26 electronic message establishes that the message was received
27 but by itself does not establish that the content sent
28 corresponds to the content received.
29 PART 3
30 CONSTRUCTION
31 SUBPART A. GENERAL
-40- LRB9110043MWgc
1 Section 301. Parol or extrinsic evidence. Terms with
2 respect to which confirmatory records of the parties agree or
3 which are otherwise set forth in a record intended by the
4 parties as a final expression of their agreement with respect
5 to terms included therein may not be contradicted by evidence
6 of any previous agreement or of a contemporaneous oral
7 agreement but may be explained or supplemented by:
8 (1) course of performance, course of dealing, or
9 usage of trade; and
10 (2) evidence of consistent additional terms, unless
11 the court finds the record to have been intended as a
12 complete and exclusive statement of the terms of the
13 agreement.
14 Section 302. Practical construction.
15 (a) The express terms of an agreement and any course of
16 performance, course of dealing, or usage of trade must be
17 construed whenever reasonable as consistent with each other.
18 However, if that construction is unreasonable:
19 (1) express terms prevail over course of
20 performance, course of dealing, and usage of trade;
21 (2) course of performance prevails over course of
22 dealing and usage of trade; and
23 (3) course of dealing prevails over usage of trade.
24 (b) An applicable usage of trade in the place where any
25 part of performance is to occur must be used in interpreting
26 the agreement as to that part of the performance.
27 (c) Evidence of a relevant course of performance, course
28 of dealing, or usage of trade offered by one party in a
29 proceeding is not admissible unless and until the party
30 offering the evidence has given the other party notice that
31 the court finds sufficient to prevent unfair surprise.
32 (d) The existence and scope of a usage of trade must be
33 proved as facts.
-41- LRB9110043MWgc
1 Section 303. Modification and rescission.
2 (a) An agreement modifying a contract subject to this
3 Act needs no consideration to be binding.
4 (b) An authenticated record that precludes modification
5 or rescission except by an authenticated record may not
6 otherwise be modified or rescinded. In a standard form
7 supplied by a merchant to a consumer, a term requiring an
8 authenticated record for modification of the contract is not
9 enforceable unless the consumer manifests assent to the term.
10 (c) A modification of a contract and the contract as
11 modified must satisfy the requirements of Sections 201(a) and
12 307(g) if the contract as modified is within those
13 provisions.
14 (d) An attempt at modification or rescission which does
15 not satisfy subsection (b) or (c) may operate as a waiver if
16 Section 702 is satisfied.
17 Section 304. Continuing contractual terms.
18 (a) Terms of an agreement involving successive
19 performances apply to all performances, even if the terms are
20 not displayed or otherwise brought to the attention of a
21 party with respect to each successive performance, unless the
22 terms are modified in accordance with this Act or the
23 contract.
24 (b) If a contract provides that terms may be changed as
25 to future performances by compliance with a described
26 procedure, a change proposed in good faith pursuant to that
27 procedure becomes part of the contract if the procedure:
28 (1) reasonably notifies the other party of the
29 change; and
30 (2) in a mass-market transaction, permits the other
31 party to terminate the contract as to future performance
32 if the change alters a material term and the party in
33 good faith determines that the modification is
-42- LRB9110043MWgc
1 unacceptable.
2 (c) The parties by agreement may determine the standards
3 for reasonable notice unless the agreed standards are
4 manifestly unreasonable in light of the commercial
5 circumstances.
6 (d) The enforceability of changes made pursuant to a
7 procedure that does not comply with subsection (b) is
8 determined by the other provisions of this Act or other law.
9 Section 305. Terms to be specified. An agreement that
10 is otherwise sufficiently definite to be a contract is not
11 invalid because it leaves particulars of performance to be
12 specified by one of the parties. If particulars of
13 performance are to be specified by a party, the following
14 rules apply:
15 (1) Specification must be made in good faith and
16 within limits set by commercial reasonableness.
17 (2) If a specification materially affects the other
18 party's performance but is not seasonably made, the other
19 party:
20 (A) is excused for any resulting delay in its
21 performance; and
22 (B) may perform, suspend performance, or treat
23 the failure to specify as a breach of contract.
24 Section 306. Performance under open terms. A
25 performance obligation of a party that cannot be determined
26 from the agreement or from other provisions of this Act
27 requires the party to perform in a manner and in a time that
28 is reasonable in light of the commercial circumstances
29 existing at the time of agreement.
30 SUBPART B. INTERPRETATION
-43- LRB9110043MWgc
1 Section 307. Interpretation and requirements for grant.
2 (a) A license grants:
3 (1) the contractual rights that are expressly
4 described; and
5 (2) a contractual right to use any informational
6 rights within the licensor's control at the time of
7 contracting which are necessary in the ordinary course to
8 exercise the expressly described rights.
9 (b) If a license expressly limits use of the information
10 or informational rights, use in any other manner is a breach
11 of contract. In all other cases, a license contains an
12 implied limitation that the licensee will not use the
13 information or informational rights otherwise than as
14 described in subsection (a). However, use inconsistent with
15 this implied limitation is not a breach if it is permitted
16 under applicable law in the absence of the implied
17 limitation.
18 (c) An agreement that does not specify the number of
19 permitted users permits a number of users which is reasonable
20 in light of the informational rights involved and the
21 commercial circumstances existing at the time of the
22 agreement.
23 (d) A party is not entitled to any rights in new
24 versions of, or improvements or modifications to, information
25 made by the other party. A licensor's agreement to provide
26 new versions, improvements, or modifications requires that
27 the licensor provide them as developed and made generally
28 commercially available from time to time by the licensor.
29 (e) Neither party is entitled to receive copies of
30 source code, schematics, master copy, design material, or
31 other information used by the other party in creating,
32 developing, or implementing the information.
33 (f) Terms concerning scope must be construed under
34 ordinary principles of contract interpretation in light of
-44- LRB9110043MWgc
1 the informational rights and the commercial context. In
2 addition, the following rules apply:
3 (1) A grant of "all possible rights and for all
4 media" or "all rights and for all media now known or
5 later developed", or a grant in similar terms, includes
6 all rights then existing or later created by law and all
7 uses, media, and methods of distribution or exhibition,
8 whether then existing or developed in the future and
9 whether or not anticipated at the time of the grant.
10 (2) A grant of an "exclusive license", or a grant
11 in similar terms, means that:
12 (A) for the duration of the license, the
13 licensor will not exercise, and will not grant to
14 any other person, rights in the same information or
15 informational rights within the scope of the
16 exclusive grant; and
17 (B) the licensor affirms that it has not
18 previously granted those rights in a contract in
19 effect when the licensee's rights may be exercised.
20 (g) The rules in this Section may be varied only by a
21 record that is sufficient to indicate that a contract has
22 been made and which is:
23 (1) authenticated by the party against which
24 enforcement is sought; or
25 (2) prepared and delivered by one party and adopted
26 by the other under Section 208 or 209.
27 Section 308. Duration of contract. If an agreement does
28 not specify its duration, to the extent allowed by other law,
29 the following rules apply:
30 (1) Except as otherwise provided in paragraph (2),
31 the agreement is enforceable for a time reasonable in
32 light of the licensed subject matter and commercial
33 circumstances but may be terminated as to future
-45- LRB9110043MWgc
1 performances at will by either party during that time on
2 giving seasonable notice to the other party.
3 (2) The duration of contractual rights to use
4 licensed subject matter is a time reasonable in light of
5 the licensed informational rights and the commercial
6 circumstances. However, subject to cancellation for
7 breach of contract, the duration of the license is
8 perpetual as to the contractual rights and contractual
9 use terms if:
10 (A) the license is of a computer program that
11 does not include source code and the license:
12 (i) transfers ownership of a copy; or
13 (ii) delivers a copy for a contract fee
14 the total amount of which is fixed at or before
15 the time of delivery of the copy; or
16 (B) the license expressly grants the right to
17 incorporate or use the licensed information or
18 informational rights with information or
19 informational rights from other sources in a
20 combined work for public distribution or public
21 performance.
22 Section 309. Agreement for performance to party's
23 satisfaction.
24 (a) Except as otherwise provided in subsection (b), an
25 agreement that provides that the performance of one party is
26 to be to the satisfaction or approval of the other party
27 requires performance sufficient to satisfy a reasonable
28 person in the position of the party that must be satisfied.
29 (b) Performance must be to the subjective satisfaction
30 of the other party if:
31 (1) the agreement expressly so provides, such as by
32 stating that approval is in the "sole discretion" of the
33 party, or words of similar import; or
-46- LRB9110043MWgc
1 (2) the agreement is for informational content to be
2 evaluated in reference to subjective characteristics such
3 as aesthetics, appeal, suitability to taste, or
4 subjective quality.
5 PART 4
6 WARRANTIES
7 Section 401. Warranty and obligations concerning
8 noninterference and noninfringement.
9 (a) A licensor of information that is a merchant
10 regularly dealing in information of the kind warrants that
11 the information will be delivered free of the rightful claim
12 of any third person by way of infringement or
13 misappropriation, but a licensee that furnishes detailed
14 specifications to the licensor and the method required for
15 meeting the specifications holds the licensor harmless
16 against any such claim that arises out of compliance with the
17 specification or required method except for a claim that
18 results from the failure of the licensor to adopt, or notify
19 the licensee of, a noninfringing alternative of which the
20 licensor had reason to know.
21 (b) A licensor warrants:
22 (1) for the duration of the license, that no person
23 holds a rightful claim to, or interest in, the
24 information which arose from an act or omission of the
25 licensor, other than a claim by way of infringement or
26 misappropriation, which will interfere with the
27 licensee's enjoyment of its interest; and
28 (2) as to rights granted exclusively to the
29 licensee, that within the scope of the license:
30 (A) to the knowledge of the licensor, any
31 licensed patent rights are valid and exclusive to
32 the extent exclusivity and validity are recognized
-47- LRB9110043MWgc
1 by the law under which the patent rights were
2 created; and
3 (B) in all other cases, the licensed
4 informational rights are valid and exclusive for the
5 information as a whole to the extent exclusivity and
6 validity are recognized by the law applicable to the
7 licensed rights in a jurisdiction to which the
8 license applies.
9 (c) The warranties in this Section are subject to the
10 following rules:
11 (1) If the licensed informational rights are
12 subject to a right of privileged use, collective
13 administration, or compulsory licensing, the warranty is
14 not made with respect to those rights.
15 (2) The obligations under subsections (a) and
16 (b)(2) apply solely to informational rights arising under
17 the laws of the United States or a State, unless the
18 contract expressly provides that the warranty obligations
19 extend to rights under the laws of other countries.
20 Language is sufficient for this purpose if it states "The
21 licensor warrants 'exclusivity' 'noninfringement' 'in
22 specified countries' 'worldwide'", or words of similar
23 import. In that case, the warranty extends to the
24 specified country or, in the case of a reference to
25 "worldwide" or the like, to all countries within the
26 description, but only to the extent the rights are
27 recognized under a treaty or international convention to
28 which the country and the United States are signatories.
29 (3) The warranties under subsections (a) and (b)(2)
30 are not made by a license that merely permits use, or
31 convenants not to claim infringement because of the use,
32 of rights under a licensed patent.
33 (d) Except as otherwise provided in subsection (e), a
34 warranty under this Section may be disclaimed or modified
-48- LRB9110043MWgc
1 only by specific language or by circumstances that give the
2 licensee reason to know that the licensor does not warrant
3 that competing claims do not exist or that the licensor
4 purports to grant only the rights it may have. In an
5 automated transaction, language is sufficient if it is
6 conspicuous. Otherwise, language in a record is sufficient if
7 it states "There is no warranty against interference with
8 your enjoyment of the information or against infringement",
9 or words of similar import.
10 (e) Between merchants, a grant of a "quitclaim", or a
11 grant in similar terms, grants the information or
12 informational rights without an implied warranty as to
13 infringement or misappropriation or as to the rights actually
14 possessed or transferred by the licensor.
15 Section 402. Express warranty.
16 (a) Subject to subsection (c), an express warranty by a
17 licensor is created as follows:
18 (1) An affirmation of fact or promise made by the
19 licensor to its licensee, including by advertising, which
20 relates to the information and becomes part of the basis
21 of the bargain creates an express warranty that the
22 information to be furnished under the agreement will
23 conform to the affirmation or promise.
24 (2) Any description of the information which is
25 made part of the basis of the bargain creates an express
26 warranty that the information will conform to the
27 description.
28 (3) Any sample, model, or demonstration of a final
29 product which is made part of the basis of the bargain
30 creates an express warranty that the performance of the
31 information will reasonably conform to the performance of
32 the sample, model, or demonstration, taking into account
33 differences that would appear to a reasonable person in
-49- LRB9110043MWgc
1 the position of the licensee between the sample, model,
2 or demonstration and the information as it will be used.
3 (b) It is not necessary to the creation of an express
4 warranty that the licensor use formal words, such as
5 "warranty" or "guaranty", or state a specific intention to
6 make a warranty. However, an express warranty is not created
7 by:
8 (1) an affirmation or prediction merely of the value
9 of the information or informational rights;
10 (2) a display or description of a portion of the
11 information to illustrate the aesthetics, appeal,
12 suitability to taste, subjective quality, or the like of
13 informational content; or
14 (3) a statement purporting to be merely the
15 licensor's opinion or commendation of the information or
16 informational rights.
17 (c) An express warranty or similar express contractual
18 obligation, if any, exists with respect to published
19 informational content covered by this Act to the same extent
20 that it would exist if the published informational content
21 had been published in a form that placed it outside this Act.
22 However, if the warranty or similar express contractual
23 obligation is breached, the remedies of the aggrieved party
24 are those under this Act and the agreement.
25 Section 403. Implied warranty: merchantability of
26 computer program.
27 (a) Unless the warranty is disclaimed or modified, a
28 licensor that is a merchant with respect to computer programs
29 of the kind warrants:
30 (1) to the end user that the computer program is fit
31 for the ordinary purposes for which such computer
32 programs are used;
33 (2) to the distributor that:
-50- LRB9110043MWgc
1 (A) the program is adequately packaged and
2 labeled as the agreement requires; and
3 (B) in the case of multiple copies, the copies
4 are within the variations permitted by the
5 agreement, of even kind, quality, and quantity
6 within each unit and among all units involved; and
7 (3) that the program conforms to any promises or
8 affirmations of fact made on the container or label.
9 (b) Unless disclaimed or modified, other implied
10 warranties with respect to computer programs may arise from
11 course of dealing or usage of trade.
12 (c) No warranty is created under this Section with
13 respect to informational content, but an implied warranty may
14 arise under Section 404.
15 Section 404. Implied warranty: informational content.
16 (a) Unless the warranty is disclaimed or modified, a
17 merchant that, in a special relationship of reliance with a
18 licensee, collects, compiles, processes, provides, or
19 transmits informational content warrants to that licensee
20 that there is no inaccuracy in the informational content
21 caused by the merchant's failure to perform with reasonable
22 care.
23 (b) A warranty does not arise under subsection (a) with
24 respect to:
25 (1) published informational content; or
26 (2) a person that acts as a conduit or provides no
27 more than editorial services in collecting, compiling,
28 distributing, processing, providing, or transmitting
29 informational content that under the circumstances can be
30 identified as that of a third person.
31 (c) The warranty under this Section is not subject to
32 the preclusion in Section 113(a)(1) on disclaiming
33 obligations of diligence, reasonableness, or care.
-51- LRB9110043MWgc
1 Section 405. Implied warranty: licensee's purpose;
2 system integration.
3 (a) Unless the warranty is disclaimed or modified, if a
4 licensor at the time of contracting has reason to know any
5 particular purpose for which the computer information is
6 required and that the licensee is relying on the licensor's
7 skill or judgment to select, develop, or furnish suitable
8 information, the following rules apply:
9 (1) Except as otherwise provided in paragraph (2),
10 there is an implied warranty that the information is fit
11 for that purpose.
12 (2) If from all the circumstances it appears that
13 the licensor was to be paid for the amount of its time or
14 effort regardless of the fitness of the resulting
15 information, the warranty under paragraph (1) is that the
16 information will not fail to achieve the licensee's
17 particular purpose as a result of the licensor's lack of
18 reasonable effort.
19 (b) There is no warranty under subsection (a) with
20 regard to:
21 (1) the aesthetics, appeal, suitability to taste, or
22 subjective quality of informational content; or
23 (2) published informational content, but there may
24 be a warranty with regard to the licensor's selection
25 among published informational content from different
26 providers.
27 (c) If an agreement requires a licensor to provide or
28 select a system consisting of computer programs and goods,
29 and the licensor has reason to know that the licensee is
30 relying on the skill or judgment of the licensor to select
31 the components of the system, there is an implied warranty
32 that the components provided or selected will function
33 together as a system.
34 (d) The warranty under this Section is not subject to
-52- LRB9110043MWgc
1 the preclusion in Section 113(a)(1) on disclaiming diligence,
2 reasonableness, or care.
3 Section 406. Disclaimer or modification of warranty.
4 (a) Words or conduct relevant to the creation of an
5 express warranty and words or conduct tending to disclaim or
6 modify an express warranty must be construed wherever
7 reasonable as consistent with each other. Subject to Section
8 301 with regard to parol or extrinsic evidence, the
9 disclaimer or modification is inoperative to the extent that
10 such construction is unreasonable.
11 (b) Except as otherwise provided in subsections (c),
12 (d), and (e), to disclaim or modify an implied warranty or
13 any part of it, but not the warranty in Section 401, the
14 following rules apply:
15 (1) Except as otherwise provided in this
16 subsection:
17 (A) To disclaim or modify the implied warranty
18 arising under Section 403, language must mention
19 "merchantability" or "quality" or use words of
20 similar import and, if in a record, must be
21 conspicuous.
22 (B) To disclaim or modify the implied warranty
23 arising under Section 404, language in a record must
24 mention "accuracy" or use words of similar import.
25 (2) Language to disclaim or modify the implied
26 warranty arising under Section 405 must be in a record
27 and be conspicuous. It is sufficient to state "There is
28 no warranty that this information, our efforts, or the
29 system will fulfill any of your particular purposes or
30 needs", or words of similar import.
31 (3) Language in a record is sufficient to disclaim
32 all implied warranties if it individually disclaims each
33 implied warranty or, except for the warranty in Section
-53- LRB9110043MWgc
1 401, if it is conspicuous and states "Except for express
2 warranties stated in this contract, if any, this
3 'information' 'computer program' is provided with all
4 faults, and the entire risk as to satisfactory quality,
5 performance, accuracy, and effort is with the user", or
6 words of similar import.
7 (4) A disclaimer or modification sufficient under
8 Article 2 or 2A of the Uniform Commercial Code to
9 disclaim or modify an implied warranty of merchantability
10 is sufficient to disclaim or modify the warranties under
11 Sections 403 and 404. A disclaimer or modification
12 sufficient under Article 2 or 2A of the Uniform
13 Commercial Code to disclaim or modify an implied warranty
14 of fitness for a particular purpose is sufficient to
15 disclaim or modify the warranties under Section 405.
16 (c) Unless the circumstances indicate otherwise, all
17 implied warranties, but not the warranty under Section 401,
18 are disclaimed by expressions like "as is" or "with all
19 faults" or other language that in common understanding calls
20 the licensee's attention to the disclaimer of warranties and
21 makes plain that there are no implied warranties.
22 (d) If a licensee before entering into a contract has
23 examined the information or the sample or model as fully as
24 it desired or has refused to examine the information, there
25 is no implied warranty with regard to defects that an
26 examination ought in the circumstances to have revealed to
27 the licensee.
28 (e) An implied warranty may also be disclaimed or
29 modified by course of performance, course of dealing, or
30 usage of trade.
31 (f) If a contract requires ongoing performance or a
32 series of performances by the licensor, language of
33 disclaimer or modification which complies with this Section
34 is effective with respect to all performances under the
-54- LRB9110043MWgc
1 contract.
2 (g) Remedies for breach of warranty may be limited in
3 accordance with this Act with respect to liquidation or
4 limitation of damages and contractual modification of remedy.
5 Section 407. Modification of computer program. A
6 licensee that modifies a computer program, other than by
7 using a capability of the program intended for that purpose
8 in the ordinary course, does not invalidate any warranty
9 regarding performance of an unmodified copy but does
10 invalidate any warranties, express or implied, regarding
11 performance of the modified copy. A modification occurs if a
12 licensee alters code in, deletes code from, or adds code to
13 the computer program.
14 Section 408. Cumulation and conflict of warranties.
15 Warranties, whether express or implied, must be construed as
16 consistent with each other and as cumulative, but if that
17 construction is unreasonable, the intention of the parties
18 determines which warranty is dominant. In ascertaining that
19 intention, the following rules apply:
20 (1) Exact or technical specifications displace an
21 inconsistent sample or model or general language of
22 description.
23 (2) A sample displaces inconsistent general
24 language of description.
25 (3) Express warranties displace inconsistent
26 implied warranties other than an implied warranty under
27 Section 405(a).
28 Section 409. Third-party beneficiaries of warranty.
29 (a) Except for published informational content, a
30 warranty to a licensee extends to persons for whose benefit
31 the licensor intends to supply the information or
-55- LRB9110043MWgc
1 informational rights and which rightfully use the information
2 in a transaction or application of a kind in which the
3 licensor intends the information to be used.
4 (b) A warranty to a consumer extends to each individual
5 consumer in the licensee's immediate family or household if
6 the individual's use would have been reasonably expected by
7 the licensor.
8 (c) A contractual term that excludes or limits the
9 persons to which a warranty extends is effective except as to
10 individuals described in subsection (b).
11 (d) A disclaimer or modification of a warranty or remedy
12 which is effective against the licensee is also effective
13 against third persons to which a warranty extends under this
14 Section.
15 PART 5
16 TRANSFER OF INTERESTS AND RIGHTS
17 SUBPART A. OWNERSHIP AND TRANSFERS
18 Section 501. Ownership of informational rights.
19 (a) If an agreement provides for conveyance of ownership
20 of informational rights in a computer program, ownership
21 passes at the time and place specified by the agreement but
22 does not pass until the program is in existence and
23 identified to the contract. If the agreement does not
24 specify a different time, ownership passes when the program
25 and the informational rights are in existence and identified
26 to the contract.
27 (b) Transfer of a copy does not transfer ownership of
28 informational rights.
29 Section 502. Title to copy.
30 (a) In a license:
31 (1) title to a copy is determined by the license;
-56- LRB9110043MWgc
1 (2) a licensee's right under the license to
2 possession or control of a copy is governed by the
3 license and does not depend solely on title to the copy;
4 and
5 (3) if a licensor reserves title to a copy, the
6 licensor retains title to that copy and any copies made
7 of it, unless the license grants the licensee a right to
8 make and sell copies to others, in which case the
9 reservation of title applies only to copies delivered to
10 the licensee by the licensor.
11 (b) If an agreement provides for transfer of title to a
12 copy, title passes:
13 (1) at the time and place specified in the
14 agreement; or
15 (2) if the agreement does not specify a time and
16 place:
17 (A) with respect to delivery of a copy on a
18 tangible medium, at the time and place the licensor
19 completed its obligations with respect to tender of
20 the copy; or
21 (B) with respect to electronic delivery of a
22 copy, if a first sale occurs under federal copyright
23 law, at the time and place at which the licensor
24 completed its obligations with respect to tender of
25 the copy.
26 (c) If the party to which title passes under the
27 contract refuses delivery of the copy or rejects the terms of
28 the agreement, title revests in the licensor.
29 Section 503. Transfer of contractual interest. The
30 following rules apply to a transfer of a contractual
31 interest:
32 (1) A party's contractual interest may be
33 transferred unless the transfer:
-57- LRB9110043MWgc
1 (A) is prohibited by other law; or
2 (B) except as otherwise provided in paragraph
3 (3), would materially change the duty of the other
4 party, materially increase the burden or risk
5 imposed on the other party, or materially impair the
6 other party's property or its likelihood or
7 expectation of obtaining return performance.
8 (2) Except as otherwise provided in paragraph (3)
9 and Section 508(a)(1)(B), a term prohibiting transfer of
10 a party's contractual interest is enforceable, and a
11 transfer made in violation of that term is a breach of
12 contract and is ineffective to create contractual rights
13 in the transferee against the nontransferring party,
14 except to the extent that:
15 (A) the contract is a license for incorporation
16 or use of the licensed information or informational
17 rights with information or informational rights from
18 other sources in a combined work for public
19 distribution or public performance and the transfer
20 is of the completed, combined work; or
21 (B) the transfer is of a right to payment
22 arising out of the transferor's due performance of
23 less than its entire obligation and the transfer
24 would be enforceable under paragraph (1) in the
25 absence of the term prohibiting transfer.
26 (3) A right to damages for breach of the whole
27 contract or a right to payment arising out of the
28 transferor's due performance of its entire obligation may
29 be transferred notwithstanding an agreement otherwise.
30 (4) A term that prohibits transfer of a contractual
31 interest under a mass-market license by the licensee must
32 be conspicuous.
33 Section 504. Effect of transfer of contractual interest.
-58- LRB9110043MWgc
1 (a) A transfer of "the contract" or of "all my rights
2 under the contract", or a transfer in similar general terms,
3 is a transfer of all contractual interests under the
4 contract. Whether the transfer is effective is determined by
5 Sections 503 and 508(a)(1)(B).
6 (b) The following rules apply to a transfer of a party's
7 contractual interests:
8 (1) The transferee is subject to all contractual
9 use terms.
10 (2) Unless the language or circumstances otherwise
11 indicate, as in a transfer as security, the transfer
12 delegates the duties of the transferor and transfers its
13 rights.
14 (3) Acceptance of the transfer is a promise by the
15 transferee to perform the delegated duties. The promise
16 is enforceable by the transferor and any other party to
17 the original contract.
18 (4) The transfer does not relieve the transferor of
19 any duty to perform, or of liability for breach of
20 contract, unless the other party to the original contract
21 agrees that the transfer has that effect.
22 (c) A party to the original contract, other than the
23 transferor, may treat a transfer that conveys a right or duty
24 of performance without its consent as creating reasonable
25 grounds for insecurity and, without prejudice to the party's
26 rights against the transferor, may demand assurances from the
27 transferee under Section 708.
28 Section 505. Performance by delegate; subcontract.
29 (a) A party may perform its contractual duties or
30 exercise its contractual rights through a delegate or a
31 subcontract unless:
32 (1) the contract prohibits delegation or
33 subcontracting; or
-59- LRB9110043MWgc
1 (2) the other party has a substantial interest in
2 having the original promisor perform or control the
3 performance.
4 (b) Delegating or subcontracting performance does not
5 relieve the delegating party of a duty to perform or of
6 liability for breach.
7 (c) An attempted delegation that violates a term
8 prohibiting delegation is not effective.
9 Section 506. Transfer by licensee.
10 (a) If all or any part of a licensee's interest in a
11 license is transferred, voluntarily or involuntarily, the
12 transferee does not acquire an interest in information,
13 copies, or the contractual or informational rights of the
14 licensee unless the transfer is effective under Section 503
15 or 508(a)(1)(B). If the transfer is effective, the transferee
16 takes subject to the terms of the license.
17 (b) Except as otherwise provided under trade secret law,
18 a transferee acquires no more than the contractual interest
19 or other rights that the transferor was authorized to
20 transfer.
21 SUBPART B. FINANCING ARRANGEMENTS
22 Section 507. Financing if financier does not become
23 licensee. If a financier does not become a licensee in
24 connection with its financial accommodation contract, the
25 following rules apply:
26 (1) The financier does not receive the benefits or
27 burdens of the license.
28 (2) The licensee's rights and obligations with
29 respect to the information and informational rights are
30 governed by:
31 (A) the license;
-60- LRB9110043MWgc
1 (B) any rights of the licensor under other
2 law; and
3 (C) to the extent not inconsistent with
4 subparagraphs (A) and (B), any financial
5 accommodation contract between the financier and the
6 licensee, which may add additional conditions to the
7 licensee's right to use the licensed information or
8 informational rights.
9 Section 508. Finance licenses.
10 (a) If a financier becomes a licensee in connection with
11 its financial accommodation contract and then transfers its
12 contractual interest under the license, or sublicenses the
13 licensed computer information or informational rights, to a
14 licensee receiving the financial accommodation, the following
15 rules apply:
16 (1) The transfer or sublicense to the accommodated
17 licensee is not effective unless:
18 (A) the transfer or sublicense is effective
19 under Section 503; or
20 (B) the following conditions are fulfilled:
21 (i) before the licensor delivered the
22 information or granted the license to the
23 financier, the licensor received notice in a
24 record from the financier giving the name and
25 location of the accommodated licensee and
26 clearly indicating that the license was being
27 obtained in order to transfer the contractual
28 interest or sublicense the licensed information
29 or informational rights to the accommodated
30 licensee;
31 (ii) the financier became a licensee
32 solely to make the financial accommodation; and
33 (iii) the accommodated licensee adopts
-61- LRB9110043MWgc
1 the terms of the license, which terms may be
2 supplemented by the financial accommodation
3 contract, to the extent the terms of the
4 financial accommodation contract are not
5 inconsistent with the license and any rights of
6 the licensor under other law.
7 (2) A financier that makes a transfer that is
8 effective under paragraph (1)(B) may make only the single
9 transfer or sublicense contemplated by the notice unless
10 the licensor consents to a later transfer.
11 (b) If a financier makes an effective transfer of its
12 contractual interest in a license, or an effective sublicense
13 of the licensed information or informational rights, to an
14 accommodated licensee, the following rules apply:
15 (1) The accommodated licensee's rights and
16 obligations are governed by:
17 (A) the license;
18 (B) any rights of the licensor under other
19 law; and
20 (C) to the extent not inconsistent with
21 subparagraphs (A) and (B), the financial
22 accommodation contract, which may impose additional
23 conditions to the licensee's right to use the
24 licensed information or informational rights.
25 (2) The financier does not make warranties to the
26 accommodated licensee other than the warranty under
27 Section 401(b)(1) and any express warranties in the
28 financial accommodation contract.
29 Section 509. Financing arrangements: obligations
30 irrevocable. Unless the accommodated licensee is a consumer,
31 a term in a financial accommodation contract providing that
32 the accommodated licensee's obligations to the financier are
33 irrevocable and independent is enforceable. The obligations
-62- LRB9110043MWgc
1 become irrevocable and independent upon the licensee's
2 acceptance of the license or the financier's giving of value,
3 whichever occurs first.
4 Section 510. Financing arrangements: remedies or
5 enforcement.
6 (a) Except as otherwise provided in subsection (b), on
7 material breach of a financial accommodation contract by the
8 accommodated licensee, the following rules apply:
9 (1) The financier may cancel the financial
10 accommodation contract.
11 (2) Subject to paragraphs (3) and (4), the
12 financier may pursue its remedies against the
13 accommodated licensee under the financial accommodation
14 contract.
15 (3) If the financier became a licensee and made a
16 transfer or sublicense that was effective under Section
17 508, it may exercise the remedies of a licensor for
18 breach, including the rights of an aggrieved party under
19 Section 815, subject to the limitations of Section 816.
20 (4) If the financier did not become a licensee or
21 did not make a transfer that was effective under Section
22 508, it may enforce a contractual right contained in the
23 financial accommodation contract to preclude the
24 licensee's further use of the information. However, the
25 following rules apply:
26 (A) The financier has no right to take
27 possession of copies, use the information or
28 informational rights, or transfer any contractual
29 interest in the license.
30 (B) If the accommodated licensee agreed to
31 transfer possession of copies to the financier in
32 the event of material breach of the financial
33 accommodation contract, the financier may enforce
-63- LRB9110043MWgc
1 that contractual right only if permitted to do so
2 under subsection (b)(1) and Section 503.
3 (b) The following additional limitations apply to a
4 financier's remedies under subsection (a):
5 (1) A financier described in subsection (a)(3)
6 which is entitled under the financial accommodation
7 contract to take possession or prevent use of
8 information, copies, or related materials may do so only
9 if the licensor consents or if doing so would not result
10 in a material adverse change of the duty of the licensor,
11 materially increase the burden or risk imposed on the
12 licensor, disclose or threaten to disclose trade secrets
13 or confidential material of the licensor, or materially
14 impair the licensor's likelihood or expectation of
15 obtaining return performance.
16 (2) The financier may not otherwise exercise
17 control over, have access to, or sell, transfer, or
18 otherwise use the information or copies without the
19 consent of the licensor unless the financier or
20 transferee is subject to the terms of the license and:
21 (A) the licensee owns the licensed copy, the
22 license does not preclude transfer of the licensee's
23 contractual rights, and the transfer complies with
24 federal copyright law for the owner of a copy to
25 make the transfer; or
26 (B) the license is transferable by its express
27 terms and the financier fulfills any conditions to,
28 or complies with any restrictions on, transfer.
29 (3) The financier's remedies under the financial
30 accommodation contract are subject to the licensor's
31 rights and the terms of the license.
32 Section 511. Financing arrangements: effect on
33 licensor's rights.
-64- LRB9110043MWgc
1 (a) The creation of a financier's interest does not
2 place any obligations on or alter the rights of a licensor.
3 (b) A financier's interest does not attach to any
4 intellectual property rights of the licensor unless the
5 licensor expressly consents to such attachment in a license
6 or another record.
7 PART 6
8 PERFORMANCE
9 SUBPART A. GENERAL
10 Section 601. Performance of contract in general.
11 (a) A party shall perform in a manner that conforms to
12 the contract.
13 (b) If an uncured material breach of contract by one
14 party precedes the aggrieved party's performance, the
15 aggrieved party need not perform except with respect to
16 contractual use terms. In addition, the following rules
17 apply:
18 (1) The aggrieved party may refuse a performance
19 that is a material breach as to that performance or a
20 performance that may be refused under Section 704(b).
21 (2) The aggrieved party may cancel the contract
22 only if the breach is a material breach of the whole
23 contract or the agreement so provides.
24 (c) Except as otherwise provided in subsection (b),
25 tender of performance by a party entitles the party to
26 acceptance of that performance. In addition, the following
27 rules apply:
28 (1) A tender of performance occurs when the party,
29 with manifest present ability and willingness to perform,
30 offers to complete the performance.
31 (2) If a performance by the other party is due at
32 the time of the tendered performance, tender of the other
-65- LRB9110043MWgc
1 party's performance is a condition to the tendering
2 party's obligation to complete the tendered performance.
3 (3) A party shall pay or render the consideration
4 required by the agreement for a performance it accepts.
5 A party that accepts a performance has the burden of
6 establishing a breach of contract with respect to the
7 accepted performance.
8 (d) Except as otherwise provided in Sections 603 and
9 604, in the case of a performance with respect to a copy,
10 this Section is subject to Sections 606 through 610 and
11 Sections 704 through 707.
12 Section 602. Licensor's obligations to enable use.
13 (a) In this Section, "enable use" means to grant a
14 contractual right or permission with respect to information
15 or informational rights and to complete the acts, if any,
16 required under the agreement to make the information
17 available to the licensee.
18 (b) A licensor shall enable use by the licensee pursuant
19 to the contract. The following rules apply to enabling use:
20 (1) If nothing other than the grant of a
21 contractual right or permission is required to enable
22 use, the licensor enables use when the contract becomes
23 enforceable.
24 (2) If the agreement requires delivery of a copy,
25 enabling use occurs when the copy is tendered to the
26 licensee.
27 (3) If the agreement requires delivery of a copy
28 and steps authorizing the licensee's use, enabling use
29 occurs when the last of those acts occurs.
30 (4) In an access contract, enabling use requires
31 tendering all access material necessary to enable the
32 agreed access.
33 (5) If the agreement requires a transfer of
-66- LRB9110043MWgc
1 ownership of informational rights and a filing or
2 recording is allowed by law to establish priority of the
3 transferred ownership, on request by the licensee, the
4 licensor shall execute and tender a record appropriate
5 for that purpose.
6 Section 603. Submissions of information to satisfaction
7 of party. If an agreement requires that submitted
8 information be to the satisfaction of the recipient, the
9 following rules apply:
10 (1) Sections 606 through 610 and Sections 704
11 through 707 do not apply to the submission.
12 (2) If the information is not satisfactory to the
13 recipient and the parties engage in efforts to correct
14 the deficiencies in a manner and over a time consistent
15 with the ordinary standards of the business, trade, or
16 industry, neither the efforts nor the passage of time
17 required for the efforts is an acceptance or a refusal of
18 the submission.
19 (3) Except as otherwise provided in paragraph (4),
20 neither refusal nor acceptance occurs unless the
21 recipient expressly refuses or accepts the submitted
22 information, but the recipient may not use the submitted
23 information before acceptance.
24 (4) Silence and a failure to act in reference to a
25 submission beyond a commercially reasonable time to
26 respond entitle the submitting party to demand, in a
27 record delivered to the recipient, a decision on the
28 submission. If the recipient fails to respond within a
29 reasonable time after receipt of the demand, the
30 submission is deemed to have been refused.
31 Section 604. Immediately completed performance. If a
32 performance involves delivery of information or services
-67- LRB9110043MWgc
1 which, because of their nature, may provide a licensee,
2 immediately on performance or delivery, with substantially
3 all the benefit of the performance or with other significant
4 benefit that cannot be returned, the following rules apply:
5 (1) Sections 607 through 610 and Sections 704
6 through 707 do not apply.
7 (2) The rights of the parties are determined under
8 Section 601 and the ordinary standards of the business,
9 trade, or industry.
10 (3) Before tender of the performance, a party
11 entitled to receive the tender may inspect the media,
12 labels, or packaging but may not view the information or
13 otherwise receive the performance before completing any
14 performance of its own that is then due.
15 Section 605. Electronic regulation of performance.
16 (a) In this Section, "automatic restraint" means a
17 program, code, device, or similar electronic or physical
18 limitation the intended purpose of which is to restrict use
19 of information.
20 (b) A party entitled to enforce a limitation on use of
21 information may include an automatic restraint in the
22 information or a copy of it and use that restraint if:
23 (1) a term of the agreement authorizes use of the
24 restraint;
25 (2) the restraint prevents a use that is
26 inconsistent with the agreement;
27 (3) the restraint prevents use after expiration of
28 the stated duration of the contract or a stated number of
29 uses; or
30 (4) the restraint prevents use after the contract
31 terminates, other than on expiration of a stated duration
32 or number of uses, and the licensor gives reasonable
33 notice to the licensee before further use is prevented.
-68- LRB9110043MWgc
1 (c) This Section does not authorize an automatic
2 restraint that affirmatively prevents or makes impracticable
3 a licensee's access to its own information or information of
4 a third party, other than the licensor, if that information
5 is in the possession of the licensee or a third party and
6 accessed without use of the licensor's information or
7 informational rights.
8 (d) A party that includes or uses an automatic restraint
9 consistent with subsection (b) or (c) is not liable for any
10 loss caused by the use of the restraint.
11 (e) This Section does not preclude electronic
12 replacement or disabling of an earlier copy of information by
13 the licensor in connection with delivery of a new copy or
14 version under an agreement to replace or disable the earlier
15 copy by electronic means with an upgrade or other new
16 information.
17 (f) This Section does not authorize use of an automatic
18 restraint to enforce remedies in the event of breach of
19 contract or of cancellation for breach.
20 SUBPART B. PERFORMANCE IN DELIVERY OF COPIES
21 Section 606. Copy: delivery; tender of delivery.
22 (a) Delivery of a copy must be at the location
23 designated by agreement. In the absence of a designation, the
24 following rules apply:
25 (1) The place for delivery of a copy on a tangible
26 medium is the tendering party's place of business or, if
27 it has none, its residence. However, if the parties know
28 at the time of contracting that the copy is located in
29 some other place, that place is the place for delivery.
30 (2) The place for electronic delivery of a copy is
31 an information processing system designated or used by
32 the licensor.
-69- LRB9110043MWgc
1 (3) Documents of title may be delivered through
2 customary banking channels.
3 (b) Tender of delivery of a copy requires the tendering
4 party to put and hold a conforming copy at the other party's
5 disposition and give the other party any notice reasonably
6 necessary to enable it to obtain access to, control, or
7 possession of the copy. Tender must be at a reasonable hour
8 and, if applicable, requires tender of access material and
9 other documents required by the agreement. The party
10 receiving tender shall furnish facilities reasonably suited
11 to receive tender. In addition, the following rules apply:
12 (1) If the contract requires delivery of a copy
13 held by a third person without being moved, the tendering
14 party shall tender access material or documents required
15 by the agreement.
16 (2) If the tendering party is required or
17 authorized to send a copy to the other party and the
18 contract does not require the tendering party to deliver
19 the copy at a particular destination, the following rules
20 apply:
21 (A) In tendering delivery of a copy on a
22 tangible medium, the tendering party shall put the
23 copy in the possession of a carrier and make a
24 contract for its transportation that is reasonable
25 in light of the nature of the information and other
26 circumstances, with expenses of transportation to be
27 borne by the receiving party.
28 (B) In tendering electronic delivery of a
29 copy, the tendering party shall initiate or cause to
30 have initiated a transmission that is reasonable in
31 light of the nature of the information and other
32 circumstances, with expenses of transmission to be
33 borne by the receiving party.
34 (3) If the tendering party is required to deliver a
-70- LRB9110043MWgc
1 copy at a particular destination, the tendering party
2 shall make a copy available at that destination and bear
3 the expenses of transportation or transmission.
4 Section 607. Copy: performance related to delivery;
5 payment.
6 (a) If performance requires delivery of a copy, the
7 following rules apply:
8 (1) The party required to deliver need not complete
9 a tendered delivery until the receiving party tenders any
10 performance then due.
11 (2) Tender of delivery is a condition of the other
12 party's duty to accept the copy and entitles the
13 tendering party to acceptance of the copy.
14 (b) If payment is due on delivery of a copy, the
15 following rules apply:
16 (1) Tender of delivery is a condition of the
17 receiving party's duty to pay and entitles the tendering
18 party to payment according to the contract.
19 (2) All copies required by the contract must be
20 tendered in a single delivery, and payment is due only on
21 tender.
22 (c) If the circumstances give either party the right to
23 make or demand delivery in lots, the contract fee, if it can
24 be apportioned, may be demanded for each lot.
25 (d) If payment is due and demanded on delivery of a copy
26 or on delivery of a document of title, the right of the party
27 receiving tender to retain or dispose of the copy or
28 document, as against the tendering party, is conditioned on
29 making the payment due.
30 Section 608. Copy: right to inspect; payment before
31 inspection.
32 (a) Except as otherwise provided in Sections 603 and
-71- LRB9110043MWgc
1 604, if performance requires delivery of a copy, the
2 following rules apply:
3 (1) Except as otherwise provided in this Section,
4 the party receiving the copy has a right before payment
5 or acceptance to inspect the copy at a reasonable place
6 and time and in a reasonable manner to determine
7 conformance to the contract.
8 (2) The party making the inspection shall bear the
9 expenses of inspection.
10 (3) A place or method of inspection or an
11 acceptance standard fixed by the parties is presumed to
12 be exclusive. However, the fixing of a place, method, or
13 standard does not postpone identification to the contract
14 or shift the place for delivery, passage of title, or
15 risk of loss. If compliance with the place or method
16 becomes impossible, inspection must be made as provided
17 in this Section unless the place or method fixed by the
18 parties was an indispensable condition the failure of
19 which avoids the contract.
20 (4) A party's right to inspect is subject to
21 existing obligations of confidentiality.
22 (b) If a right to inspect exists under subsection (a)
23 but the agreement is inconsistent with an opportunity to
24 inspect before payment, the party does not have a right to
25 inspect before payment.
26 (c) If a contract requires payment before inspection of
27 a copy, nonconformity in the tender does not excuse the party
28 receiving the tender from making payment unless:
29 (1) the nonconformity appears without inspection and
30 would justify refusal under Section 704; or
31 (2) despite tender of the required documents, the
32 circumstances would justify an injunction against honor
33 of a letter of credit under Article 5 of the Uniform
34 Commercial Code.
-72- LRB9110043MWgc
1 (d) Payment made under circumstances described in
2 subsection (b) or (c) is not an acceptance of the copy and
3 does not impair a party's right to inspect or preclude any of
4 the party's remedies.
5 Section 609. Copy: when acceptance occurs.
6 (a) Acceptance of a copy occurs when the party to which
7 the copy is tendered:
8 (1) signifies, or acts with respect to the copy in a
9 manner that signifies, that the tender was conforming or
10 that the party will take or retain the copy despite the
11 nonconformity;
12 (2) does not make an effective refusal;
13 (3) commingles the copy or the information in a
14 manner that makes compliance with the party's duties
15 after refusal impossible;
16 (4) obtains a substantial benefit from the copy and
17 cannot return that benefit; or
18 (5) acts in a manner inconsistent with the
19 licensor's ownership, but the act is an acceptance only
20 if the licensor elects to treat it as an acceptance and
21 ratifies the act to the extent it was within contractual
22 use terms.
23 (b) Except in cases governed by subsection (a)(3) or
24 (4), if there is a right to inspect under Section 608 or the
25 agreement, acceptance of a copy occurs only after the party
26 has had a reasonable opportunity to inspect the copy.
27 (c) If an agreement requires delivery in stages
28 involving separate portions that taken together comprise the
29 whole of the information, acceptance of any stage is
30 conditional until acceptance of the whole.
31 Section 610. Copy: effect of acceptance; burden of
32 establishing; notice of claims.
-73- LRB9110043MWgc
1 (a) A party accepting a copy shall pay or render the
2 consideration required by the agreement for the copy it
3 accepts. Acceptance of a copy precludes refusal and, if made
4 with knowledge of a nonconformity in a tender, may not be
5 revoked because of the nonconformity unless acceptance was on
6 the reasonable assumption that the nonconformity would be
7 seasonably cured. Acceptance by itself does not impair any
8 other remedy for nonconformity.
9 (b) A party accepting a copy has the burden of
10 establishing a breach of contract with respect to the copy.
11 (c) If a copy has been accepted, the accepting party
12 shall:
13 (1) except with respect to claims of a type
14 described in Section 805(d)(1), within a reasonable time
15 after it discovers or should have discovered a breach of
16 contract, notify the other party of the breach or be
17 barred from any remedy for the breach; and
18 (2) if the claim is for breach of a warranty
19 regarding noninfringement and the accepting party is sued
20 by a third party because of the breach, notify the
21 warrantor within a reasonable time after receiving notice
22 of the litigation or be precluded from any remedy over
23 for the liability established by the litigation.
24 SUBPART C. SPECIAL TYPES OF CONTRACTS
25 Section 611. Access contracts.
26 (a) If an access contract provides for access over a
27 period of time, the following rules apply:
28 (1) The licensee's rights of access are to the
29 information as modified and made commercially available
30 by the licensor from time to time during that period.
31 (2) A change in the content of the information is a
32 breach of contract only if the change conflicts with an
-74- LRB9110043MWgc
1 express term of the agreement.
2 (3) Unless it is subject to a contractual use term,
3 information obtained by the licensee is free of any use
4 restriction other than a restriction resulting from the
5 informational rights of another person or other law.
6 (4) Access must be available:
7 (A) at times and in a manner conforming to the
8 express terms of the agreement; and
9 (B) to the extent not expressly stated in the
10 agreement, at times and in a manner reasonable for
11 the particular type of contract in light of the
12 ordinary standards of the business, trade, or
13 industry.
14 (b) In an access contract that gives the licensee a
15 right of access at times substantially of its own choosing
16 during agreed periods, an occasional failure to have access
17 available during those times is not a breach of contract if
18 it is:
19 (1) consistent with ordinary standards of the
20 business, trade, or industry for the particular type of
21 contract; or
22 (2) caused by:
23 (A) scheduled downtime;
24 (B) reasonable needs for maintenance;
25 (C) reasonable periods of failure of
26 equipment, computer programs, or communications; or
27 (D) events reasonably beyond the licensor's
28 control, and the licensor exercises such
29 commercially reasonable efforts as the circumstances
30 require.
31 Section 612. Correction and support contracts.
32 (a) If a person agrees to provide services regarding the
33 correction of performance problems in computer information,
-75- LRB9110043MWgc
1 other than an agreement to cure its own existing breach of
2 contract, the following rules apply:
3 (1) If the services are provided by a licensor of
4 the information as part of a limited remedy, the licensor
5 undertakes that its performance will provide the licensee
6 with information that conforms to the agreement to which
7 the limited remedy applies.
8 (2) In all other cases, the person:
9 (A) shall perform at a time and place and in a
10 manner consistent with the express terms of the
11 agreement and, to the extent not stated in the
12 express terms, at a time and place and in a manner
13 that is reasonable in light of ordinary standards of
14 the business, trade, or industry; and
15 (B) does not undertake that its services will
16 correct performance problems unless the agreement
17 expressly so provides.
18 (b) Unless required to do so by an express or implied
19 warranty, a licensor is not required to provide instruction
20 or other support for the licensee's use of information or
21 access. A person that agrees to provide support shall make
22 the support available in a manner and with a quality
23 consistent with express terms of the support agreement and,
24 to the extent not stated in the express terms, at a time and
25 place and in a manner that is reasonable in light of ordinary
26 standards of the business, trade, or industry.
27 Section 613. Contracts involving publishers, dealers,
28 and end users.
29 (a) In this Section:
30 (1) "Dealer" means a merchant licensee that
31 receives information directly or indirectly from a
32 licensor for sale or license to end users.
33 (2) "End user" means a licensee that acquires a
-76- LRB9110043MWgc
1 copy of the information from a dealer by delivery on a
2 tangible medium for the licensee's own use and not for
3 sale, license, transmission to third persons, or public
4 display or performance for a fee.
5 (3) "Publisher" means a licensor, other than a
6 dealer, that offers a license to an end user with respect
7 to information distributed by a dealer to the end user.
8 (b) In a contract between a dealer and an end user, if
9 the end user's right to use the information or informational
10 rights is subject to a license by the publisher and there was
11 no opportunity to review the license before the end user
12 became obligated to pay the dealer, the following rules
13 apply:
14 (1) The contract between the end user and the
15 dealer is conditioned on the end user's agreement to the
16 publisher's license.
17 (2) If the end user does not agree, such as by
18 manifesting assent, to the terms of the publisher's
19 license, the end user has a right to a return from the
20 dealer. A right under this paragraph is a return for
21 purposes of Sections 112, 208, and 209.
22 (3) The dealer is not bound by the terms, and does
23 not receive the benefits, of an agreement between the
24 publisher and the end user unless the dealer and end user
25 adopt those terms as part of the agreement.
26 (c) If an agreement provides for distribution of copies
27 on a tangible medium or in packaging provided by the
28 publisher or an authorized third party, a dealer may
29 distribute those copies and documentation only:
30 (1) in the form as received; and
31 (2) subject to the terms of any license the
32 publisher that the publisher provides to the dealer to be
33 furnished to end users.
34 (d) A dealer that enters into an agreement with an end
-77- LRB9110043MWgc
1 user is a licensor with respect to the end user under this
2 Act.
3 SUBPART D. LOSS AND IMPOSSIBILITY
4 Section 614. Risk of loss of copy.
5 (a) Except as otherwise provided in this Section, the
6 risk of loss as to a copy that is to be delivered to a
7 licensee, including a copy delivered by electronic means,
8 passes to the licensee upon its receipt of the copy.
9 (b) If an agreement requires or authorizes a licensor to
10 send a copy on a tangible medium by carrier, the following
11 rules apply:
12 (1) If the agreement does not require the licensor
13 to deliver the copy at a particular destination, the risk
14 of loss passes to the licensee when the copy is duly
15 delivered to the carrier, even if the shipment is under
16 reservation.
17 (2) If the agreement requires the licensor to
18 deliver the copy at a particular destination and the copy
19 is duly tendered there in the possession of the carrier,
20 the risk of loss passes to the licensee when the copy is
21 tendered at that destination.
22 (3) If a tender of delivery of a copy or a shipping
23 document fails to conform to the contract, the risk of
24 loss remains with the licensor until cure or acceptance.
25 (c) If a copy is held by a third party to be delivered
26 or reproduced without being moved or a copy is to be
27 delivered by making access available to a third party
28 resource containing a copy, the risk of loss passes to the
29 licensee upon:
30 (1) the licensee's receipt of a negotiable document
31 of title or other access materials covering the copy;
32 (2) acknowledgment by the third party to the
-78- LRB9110043MWgc
1 licensee of the licensee's right to possession of or
2 access to the copy; or
3 (3) the licensee's receipt of a record directing the
4 third party, pursuant to an agreement between the
5 licensor and the third party, to make delivery or
6 authorizing the third party to allow access.
7 Section 615. Excuse by failure of presupposed
8 conditions.
9 (a) Unless a party has assumed a different obligation,
10 delay in performance by a party, or nonperformance in whole
11 or part by a party, other than of an obligation to make
12 payments or to conform to contractual use terms, is not a
13 breach of contract if the delay or nonperformance is of a
14 performance that has been made impracticable by:
15 (1) the occurrence of a contingency the
16 nonoccurrence of which was a basic assumption on which
17 the contract was made; or
18 (2) compliance in good faith with any foreign or
19 domestic statute, governmental rule, regulation, or
20 order, whether or not it later proves to be invalid.
21 (b) A party claiming excuse under subsection (a) shall
22 seasonably notify the other party that there will be delay or
23 nonperformance.
24 (c) If an excuse affects only a part of a party's
25 capacity to perform an obligation for delivery of copies, the
26 party claiming excuse shall allocate performance among its
27 customers in any manner that is fair and reasonable and
28 notify the other party of the estimated quota to be made
29 available. In making the allocation, the party claiming
30 excuse may include the requirements of regular customers not
31 then under contract and its own requirements.
32 (d) A party that receives notice pursuant to subsection
33 (b) of a material or indefinite delay in delivery of copies
-79- LRB9110043MWgc
1 or of an allocation under subsection (c), by notice in a
2 record, may:
3 (1) terminate and thereby discharge any executory
4 portion of the contract; or
5 (2) modify the contract by agreeing to take the
6 available allocation in substitution.
7 (e) If, after receipt of notice under subsection (b), a
8 party does not modify the contract within a reasonable time
9 not exceeding 30 days, the contract lapses with respect to
10 any performance affected.
11 SUBPART E. TERMINATION
12 Section 616. Termination: survival of obligations.
13 (a) Except as otherwise provided in subsection (b), on
14 termination all obligations that are still executory on both
15 sides are discharged.
16 (b) The following survive termination:
17 (1) a right based on previous breach or performance
18 of the contract;
19 (2) an obligation of confidentiality, nondisclosure,
20 or noncompetition to the extent enforceable under other
21 law;
22 (3) a contractual use term applicable to any
23 licensed copy or information received from the other
24 party, or copies made of it, which are not returned or
25 returnable to the other party;
26 (4) an obligation to deliver, or dispose of
27 information, materials, documentation, copies, records,
28 or the like to the other party, an obligation to destroy
29 copies, or a right to obtain information from an escrow
30 agent;
31 (5) a choice of law or forum;
32 (6) an obligation to arbitrate or otherwise resolve
-80- LRB9110043MWgc
1 disputes by alternative dispute resolution procedures;
2 (7) a term limiting the time for commencing an
3 action or for giving notice;
4 (8) an indemnity term or a right related to a claim
5 of a type described in Section 805(d)(1);
6 (9) a limitation of remedy or modification or
7 disclaimer of warranty;
8 (10) an obligation to provide an accounting and make
9 any payment due under the accounting; and
10 (11) any term that the agreement provides will
11 survive.
12 Section 617. Notice of termination.
13 (a) Except as otherwise provided in subsection (b), a
14 party may not terminate a contract except on the happening of
15 an agreed event, such as the expiration of the stated
16 duration, unless the party gives reasonable notice of
17 termination to the other party.
18 (b) An access contract may be terminated without giving
19 notice. However, except on the happening of an agreed event,
20 termination requires giving reasonable notice to the licensee
21 if the access contract pertains to information owned and
22 provided by the licensee to the licensor.
23 (c) A term dispensing with a notice required under this
24 Section is invalid if its operation would be unconscionable.
25 However, a term specifying standards for giving notice is
26 enforceable if the standards are not manifestly unreasonable.
27 Section 618. Termination: enforcement.
28 (a) On termination of a license, a party in possession
29 or control of information, copies, or other materials that
30 are the property of the other party, or are subject to a
31 contractual obligation to be delivered to that party on
32 termination, shall use commercially reasonable efforts to
-81- LRB9110043MWgc
1 deliver or hold them for disposal on instructions of that
2 party. If any materials are jointly owned, the party in
3 possession or control shall make them available to the joint
4 owners.
5 (b) Termination of a license ends all right under the
6 license for the licensee to use or access the licensed
7 information, informational rights, or copies. Continued use
8 of the licensed copies or exercise of terminated rights is a
9 breach of contract unless authorized by a term that survives
10 termination.
11 (c) Each party may enforce its rights under subsections
12 (a) and (b) by acting pursuant to Section 605 or by judicial
13 process, including obtaining an order that the party or an
14 officer of the court take the following actions with respect
15 to any licensed information, documentation, copies, or other
16 materials to be delivered:
17 (1) deliver or take possession of them;
18 (2) without removal, render unusable or eliminate
19 the capability to exercise contractual rights in or use
20 of them;
21 (3) destroy or prevent access to them; and
22 (4) require that the party or any other person in
23 possession or control of them make them available to the
24 other party at a place designated by that party which is
25 reasonably convenient to both parties.
26 (d) In an appropriate case, a court of competent
27 jurisdiction may grant injunctive relief to enforce the
28 parties' rights under this Section.
29 PART 7
30 BREACH OF CONTRACT
31 SUBPART A. GENERAL
32 Section 701. Breach of contract; material breach.
-82- LRB9110043MWgc
1 (a) Whether a party is in breach of contract is
2 determined by the agreement or, in the absence of agreement,
3 this Act. A breach occurs if a party without legal excuse
4 fails to perform an obligation in a timely manner, repudiates
5 a contract, or exceeds a contractual use term, or otherwise
6 is not in compliance with an obligation placed on it by this
7 Act or the agreement. A breach, whether or not material,
8 entitles the aggrieved party to its remedies.
9 (b) A breach of contract is material if:
10 (1) the contract so provides;
11 (2) the breach is a substantial failure to perform a
12 term that is an essential element of the agreement; or
13 (3) the circumstances, including the language of the
14 agreement, the reasonable expectations of the parties,
15 the standards and practices of the business, trade, or
16 industry, and the character of the breach, indicate that:
17 (A) the breach caused or is likely to cause
18 substantial harm to the aggrieved party; or
19 (B) the breach substantially deprived or is
20 likely substantially to deprive the aggrieved party
21 of a significant benefit it reasonably expected
22 under the contract.
23 (c) The cumulative effect of nonmaterial breaches may be
24 material.
25 Section 702. Waiver of remedy for breach of contract.
26 (a) A claim or right arising out of a breach of contract
27 may be discharged in whole or part without consideration by a
28 waiver in a record to which the party making the waiver
29 agrees after breach, such as by manifesting assent, or which
30 the party making the waiver authenticates and delivers to the
31 other party.
32 (b) A party that accepts a performance with knowledge
33 that the performance constitutes a breach of contract and,
-83- LRB9110043MWgc
1 within a reasonable time after acceptance, does not notify
2 the other party of the breach waives all remedies for the
3 breach, unless acceptance was made on the reasonable
4 assumption that the breach would be cured and it has not been
5 seasonably cured. However, a party that seasonably notifies
6 the other party of a reservation of rights does not waive the
7 rights reserved.
8 (c) A party that refuses a performance and fails to
9 identify a particular defect that is ascertainable by
10 reasonable inspection waives the right to rely on that defect
11 to justify refusal only if:
12 (1) the other party could have cured the defect if
13 it were identified seasonably; or
14 (2) between merchants, the other party after refusal
15 made a request in a record for a full and final statement
16 of all defects on which the refusing party relied.
17 (d) Waiver of a remedy for breach of contract in one
18 performance does not waive any remedy for the same or a
19 similar breach in future performances unless the party making
20 the waiver expressly so states.
21 (e) A waiver may not be retracted as to the performance
22 to which the waiver applies.
23 (f) Except for a waiver in accordance with subsection
24 (a) or a waiver supported by consideration, a waiver
25 affecting an executory portion of a contract may be retracted
26 by seasonable notice received by the other party that strict
27 performance will be required in the future, unless the
28 retraction would be unjust in view of a material change of
29 position in reliance on the waiver by that party.
30 Section 703. Cure of breach of contract.
31 (a) A party in breach of contract may cure the breach at
32 its own expense if:
33 (1) the time for performance has not expired and the
-84- LRB9110043MWgc
1 party in breach seasonably notifies the aggrieved party
2 of its intent to cure and, within the time for
3 performance, makes a conforming performance;
4 (2) the party in breach had reasonable grounds to
5 believe the performance would be acceptable with or
6 without monetary allowance, seasonably notifies the
7 aggrieved party of its intent to cure, and provides a
8 conforming performance within a further reasonable time
9 after performance was due; or
10 (3) in a case not governed by paragraph (1) or (2),
11 the party in breach seasonably notifies the aggrieved
12 party of its intent to cure and promptly provides a
13 conforming performance before cancellation by the
14 aggrieved party.
15 (b) In a license other than in a mass-market
16 transaction, if the agreement required a single delivery of a
17 copy and the party receiving tender of delivery was required
18 to accept a nonconforming copy because the nonconformity was
19 not a material breach of contract, the party in breach shall
20 promptly and in good faith make an effort to cure if:
21 (1) the party in breach receives seasonable notice
22 of the specific nonconformity and a demand for cure of
23 it; and
24 (2) the cost of the effort to cure does not
25 disproportionately exceed the direct damages caused by
26 the nonconformity to the aggrieved party.
27 (c) A party may not cancel a contract or refuse a
28 performance because of a breach of contract that has been
29 seasonably cured under subsection (a). However, notice of
30 intent to cure does not preclude refusal or cancellation for
31 the uncured breach.
32 SUBPART B. DEFECTIVE COPIES
-85- LRB9110043MWgc
1 Section 704. Copy: refusal of defective tender.
2 (a) Subject to subsection (b) and Section 705, tender of
3 a copy that is a material breach of contract permits the
4 party to which tender is made to:
5 (1) refuse the tender;
6 (2) accept the tender; or
7 (3) accept any commercially reasonable units and
8 refuse the rest.
9 (b) In a mass-market transaction that calls for only a
10 single tender of a copy, a licensee may refuse the tender if
11 the tender does not conform to the contract.
12 (c) Refusal of a tender is ineffective unless:
13 (1) it is made before acceptance;
14 (2) it is made within a reasonable time after
15 tender or completion of any permitted effort to cure; and
16 (3) the refusing party seasonably notifies the
17 tendering party of the refusal.
18 (d) Except in a case governed by subsection (b), a party
19 that rightfully refuses tender of a copy may cancel the
20 contract only if the tender was a material breach of the
21 whole contract or the agreement so provides.
22 Section 705. Copy: contract with previous vested grant
23 of rights. If an agreement grants a right in or permission
24 to use informational rights which precedes or is otherwise
25 independent of the delivery of a copy, the following rules
26 apply:
27 (1) A party may refuse a tender of a copy which is
28 a material breach as to that copy, but refusal of that
29 tender does not cancel the contract.
30 (2) In a case governed by paragraph (1), the
31 tendering party may cure the breach by seasonably
32 providing a conforming copy before the breach becomes
33 material as to the whole contract.
-86- LRB9110043MWgc
1 (3) A breach that is material with respect to a
2 copy allows cancellation of the contract only if the
3 breach cannot be seasonably cured and is a material
4 breach of the whole contract.
5 Section 706. Copy: duties upon rightful refusal.
6 (a) Except as otherwise provided in this Section, after
7 rightful refusal or revocation of acceptance of a copy, the
8 following rules apply:
9 (1) If the refusing party rightfully cancels the
10 contract, Section 802 applies and all contractual use
11 terms continue.
12 (2) If the contract is not canceled, the parties
13 remain bound by all contractual obligations.
14 (b) On rightful refusal or revocation of acceptance of a
15 copy, the following rules apply to the extent consistent with
16 Section 802:
17 (1) Any use, sale, display, performance, or
18 transfer of the copy or information it contains, or any
19 failure to comply with a contractual use term, is a
20 breach of contract. The licensee shall pay the licensor
21 the reasonable value of any use. However, use for a
22 limited time within contractual use terms is not a
23 breach, and is not an acceptance under Section 609(a)(5),
24 if it:
25 (A) occurs after the tendering party is
26 seasonably notified of refusal;
27 (B) is not for distribution and is solely part
28 of measures reasonable under the circumstances to
29 avoid or reduce loss; and
30 (C) is not contrary to instructions concerning
31 disposition of the copy received from the party in
32 breach.
33 (2) A party that refuses a copy shall:
-87- LRB9110043MWgc
1 (A) deliver the copy and all copies made of
2 it, all access materials, and documentation
3 pertaining to the refused information to the
4 tendering party or hold them with reasonable care
5 for a reasonable time for disposal at that party's
6 instructions; and
7 (B) follow reasonable instructions of the
8 tendering party for returning or delivering copies,
9 access material, and documentation, but instructions
10 are not reasonable if the tendering party does not
11 arrange for payment of or reimbursement for
12 reasonable expenses of complying with the
13 instructions.
14 (3) If the tendering party does not give
15 instructions within a reasonable time after being
16 notified of refusal, the refusing party, in a reasonable
17 manner to reduce or avoid loss, may store the copies,
18 access material, and documentation for the tendering
19 party's account or ship them to the tendering party and
20 is entitled to reimbursement for reasonable costs of
21 storage and shipment.
22 (4) Both parties remain bound by all contractual
23 use terms that would have been enforceable had the
24 performance not been refused.
25 (5) In complying with this Section, the refusing
26 party shall act in good faith. Conduct in good faith
27 under this Section is not acceptance or conversion and
28 may not be a ground for an action for damages under the
29 contract.
30 Section 707. Copy: revocation of acceptance.
31 (a) A party that accepts a nonconforming tender of a
32 copy may revoke acceptance only if the nonconformity is a
33 material breach of contract and the party accepted it:
-88- LRB9110043MWgc
1 (1) on the reasonable assumption that the
2 nonconformity would be cured, and the nonconformity was
3 not seasonably cured;
4 (2) during a continuing effort by the party in
5 breach at adjustment and cure, and the breach was not
6 seasonably cured; or
7 (3) without discovery of the nonconformity, if
8 acceptance was reasonably induced either by the other
9 party's assurances or by the difficulty of discovery
10 before acceptance.
11 (b) Revocation of acceptance is not effective until the
12 revoking party notifies the other party of the revocation.
13 (c) Revocation of acceptance of a copy is precluded if:
14 (1) it does not occur within a reasonable time after
15 the party attempting to revoke discovers or should have
16 discovered the ground for it;
17 (2) it occurs after a substantial change in
18 condition not caused by defects in the information, such
19 as after the party commingles the information in a manner
20 that makes its return impossible; or
21 (3) the party attempting to revoke received a
22 substantial benefit or value from the information, and
23 the benefit or value cannot be returned.
24 (d) A party that rightfully revokes has the same duties
25 and is under the same restrictions as if the party had
26 refused tender of the copy.
27 SUBPART C. REPUDIATION AND ASSURANCES
28 Section 708. Adequate assurance of performance.
29 (a) A contract imposes an obligation on each party not
30 to impair the other's expectation of receiving due
31 performance. If reasonable grounds for insecurity arise with
32 respect to the performance of either party, the aggrieved
-89- LRB9110043MWgc
1 party may:
2 (1) demand in a record adequate assurance of due
3 performance; and
4 (2) until that assurance is received, if
5 commercially reasonable, suspend any performance, other
6 than with respect to contractual use terms, for which the
7 agreed return performance has not been received.
8 (b) Between merchants, the reasonableness of grounds for
9 insecurity and the adequacy of any assurance offered is
10 determined according to commercial standards.
11 (c) Acceptance of any improper delivery or payment does
12 not impair an aggrieved party's right to demand adequate
13 assurance of future performance.
14 (d) After receipt of a justified demand under subsection
15 (a), failure, within a reasonable time not exceeding 30 days,
16 to provide assurance of due performance which is adequate
17 under the circumstances of the particular case is a
18 repudiation of the contract under Section 709.
19 Section 709. Anticipatory repudiation.
20 (a) If a party to a contract repudiates a performance
21 not yet due and the loss of performance will substantially
22 impair the value of the contract to the other party, the
23 aggrieved party may:
24 (1) await performance by the repudiating party for a
25 commercially reasonable time or resort to any remedy for
26 breach of contract, even if it has urged the repudiating
27 party to retract the repudiation or has notified the
28 repudiating party that it would await its performance;
29 and
30 (2) in either case, suspend its own performance or
31 proceed in accordance with Section 812 or 813, as
32 applicable.
33 (b) Repudiation includes language that one party will
-90- LRB9110043MWgc
1 not or cannot make a performance still due under the contract
2 or voluntary, affirmative conduct that reasonably appears to
3 the other party to make a future performance impossible.
4 Section 710. Retraction of anticipatory repudiation.
5 (a) A repudiating party may retract its repudiation
6 until its next performance is due unless the aggrieved party,
7 after the repudiation, has canceled the contract, materially
8 changed its position, or otherwise indicated that it
9 considers the repudiation final.
10 (b) A retraction may be by any method that clearly
11 indicates to the aggrieved party that the repudiating party
12 intends to perform the contract. However, a retraction must
13 contain any assurance justifiably demanded under Section 708.
14 (c) Retraction restores a repudiating party's rights
15 under the contract with due excuse and allowance to the
16 aggrieved party for any delay caused by the repudiation.
17 PART 8
18 REMEDIES
19 SUBPART A. GENERAL
20 Section 801. Remedies in general.
21 (a) The remedies provided in this Act are cumulative,
22 but a party may not recover more than once for the same loss.
23 (b) Except as otherwise provided in Sections 803 and
24 804, if a party is in breach of contract, whether or not the
25 breach is material, the aggrieved party has the remedies
26 provided in the agreement or this Act, but the aggrieved
27 party shall continue to comply with any contractual use terms
28 with respect to information or copies received from the other
29 party which have not been returned or are not returnable to
30 the other party.
31 (c) Rescission or a claim for rescission of the
-91- LRB9110043MWgc
1 contract, or refusal of the information, does not preclude
2 and is not inconsistent with a claim for damages or other
3 remedy.
4 Section 802. Cancellation.
5 (a) An aggrieved party may cancel a contract if there is
6 a material breach that has not been cured or waived or the
7 agreement allows cancellation for the breach.
8 (b) Cancellation is not effective until the canceling
9 party gives notice of cancellation to the party in breach,
10 unless a delay required to notify the party would cause or
11 threaten material harm or loss to the aggrieved party. The
12 notification may be in any form reasonable under the
13 circumstances. However, in an access contract, a party may
14 cancel rights of access without notice.
15 (c) On cancellation, the following rules apply:
16 (1) If a party is in possession or control of
17 licensed information, documentation, materials, or copies
18 of licensed information, the following rules apply:
19 (A) A party that has rightfully refused a copy
20 shall comply with Section 706(b) as to the refused
21 copy.
22 (B) A party in breach of contract which would
23 be subject to an obligation to deliver under Section
24 618, shall deliver all information, documentation,
25 materials, and copies to the other party or hold
26 them with reasonable care for a reasonable time for
27 disposal at that party's instructions. The party in
28 breach of contract shall follow any reasonable
29 instructions received from the other party.
30 (C) Except as otherwise provided in
31 subparagraphs (A) and (B), the party shall comply
32 with Section 618.
33 (2) All obligations that are executory on both
-92- LRB9110043MWgc
1 sides at the time of cancellation are discharged, but the
2 following survive:
3 (A) any right based on previous breach or
4 performance; and
5 (B) the rights, duties, and remedies described
6 in Section 616(b).
7 (3) Cancellation of a license by the licensor ends
8 any contractual right of the licensee to use the
9 information, informational rights, copies, or other
10 materials.
11 (4) Cancellation of a license by the licensee ends
12 any contractual right to use the information,
13 informational rights, copies, or other materials, but the
14 licensee may use the information for a limited time after
15 the license has been canceled if the use:
16 (A) is within contractual use terms;
17 (B) is not for distribution and is solely part
18 of measures reasonable under the circumstances to
19 avoid or reduce loss; and
20 (C) is not contrary to instructions received
21 from the party in breach concerning disposition of
22 them.
23 (5) The licensee shall pay the licensor the
24 reasonable value of any use after cancellation permitted
25 under paragraph (4).
26 (6) The obligations under this subsection apply to
27 all information, informational rights, documentation,
28 materials, and copies received by the party and any
29 copies made therefrom.
30 (d) A term providing that a contract may not be canceled
31 precludes cancellation but does not limit other remedies.
32 (e) Unless a contrary intention clearly appears, an
33 expression such as "cancellation", "rescission", or the like
34 may not be construed as a renunciation or discharge of a
-93- LRB9110043MWgc
1 claim in damages for an antecedent breach.
2 Section 803. Contractual modification of remedy.
3 (a) Except as otherwise provided in this Section and in
4 Section 804:
5 (1) an agreement may provide for remedies in
6 addition to or in substitution for those provided in this
7 Act and may limit or alter the measure of damages
8 recoverable under this Act or a party's other remedies
9 under this Act, such as by precluding a party's right to
10 cancel for breach of contract, limiting remedies to
11 returning or delivering copies and repayment of the
12 contract fee, or limiting remedies to repair or
13 replacement of the nonconforming copies; and
14 (2) resort to a contractual remedy is optional
15 unless the remedy is expressly agreed to be exclusive, in
16 which case it is the sole remedy.
17 (b) Subject to subsection (c), if performance of an
18 exclusive or limited remedy causes the remedy to fail of its
19 essential purpose, the aggrieved party may pursue other
20 remedies under this Act.
21 (c) Failure or unconscionability of an agreed exclusive
22 or limited remedy makes a term disclaiming or limiting
23 consequential or incidental damages unenforceable unless the
24 agreement expressly makes the disclaimer or limitation
25 independent of the agreed remedy.
26 (d) Consequential damages and incidental damages may be
27 excluded or limited by agreement unless the exclusion or
28 limitation is unconscionable. Exclusion or limitation of
29 consequential damages for personal injury in a consumer
30 contract for a computer program that is subject to this Act
31 and is contained in consumer goods is prima facie
32 unconscionable, but exclusion or limitation of damages for a
33 commercial loss is not unconscionable.
-94- LRB9110043MWgc
1 Section 804. Liquidation of damages.
2 (a) Damages for breach of contract by either party may
3 be liquidated by agreement in an amount that is reasonable in
4 light of:
5 (1) the loss anticipated at the time of contracting;
6 (2) the actual loss; or
7 (3) the actual or anticipated difficulties of
8 proving loss in the event of breach.
9 (b) If a term liquidating damages is unenforceable under
10 this subsection, the aggrieved party may pursue the remedies
11 provided in this Act, except as limited by other terms of the
12 contract.
13 (c) If a party justifiably withholds delivery of copies
14 because of the other party's breach of contract, the party in
15 breach is entitled to restitution for any amount by which the
16 sum of the payments it made for the copies exceeds the amount
17 of the liquidated damages payable to the aggrieved party in
18 accordance with subsection (a). The right to restitution is
19 subject to offset to the extent that the aggrieved party
20 establishes:
21 (1) a right to recover damages other than under
22 subsection (a); and
23 (2) the amount or value of any benefits received by
24 the party in breach, directly or indirectly, by reason of
25 the contract.
26 (d) A term that does not liquidate damages, but that
27 limits damages available to the aggrieved party, must be
28 evaluated under Section 803.
29 Section 805. Limitation of actions.
30 (a) Except as otherwise provided in subsection (b), an
31 action for breach of contract must be commenced within the
32 later of four years after the right of action accrues or one
33 year after the breach was or should have been discovered, but
-95- LRB9110043MWgc
1 not later than five years after the right of action accrues.
2 (b) If the original agreement of the parties alters the
3 period of limitations, the following rules apply:
4 (1) The parties may reduce the period of limitation
5 to not less than one year after the right of action
6 accrues but may not extend it.
7 (2) In a consumer contract, the period of
8 limitation may not be reduced.
9 (c) Except as otherwise provided in subsection (d), a
10 right of action accrues when the act or omission constituting
11 a breach of contract occurs, even if the aggrieved party did
12 not know of the breach. A right of action for breach of
13 warranty accrues when tender of delivery of a copy pursuant
14 to Section 606, or access to the information, occurs.
15 However, if the warranty expressly extends to future
16 performance of the information or a copy, the right of action
17 accrues when the performance fails to conform to the
18 warranty, but not later than the date the warranty expires.
19 (d) In the following cases, a right of action accrues on
20 the later of the date the act or omission constituting the
21 breach of contract occurred or the date on which it was or
22 should have been discovered by the aggrieved party, but not
23 earlier than the date for delivery of a copy if the claim
24 relates to information in the copy:
25 (1) a breach of warranty against third-party claims
26 for:
27 (A) infringement or misappropriation; or
28 (B) libel, slander, or the like;
29 (2) a breach of contract involving a party's
30 disclosure or misuse of confidential information; or
31 (3) a failure to provide an indemnity or to perform
32 another obligation to protect or defend against a
33 third-party claim.
34 (e) If an action commenced within the period of
-96- LRB9110043MWgc
1 limitation is so concluded as to leave available a remedy by
2 another action for the same breach of contract, the other
3 action may be commenced after expiration of the period of
4 limitation if the action is commenced within six months after
5 conclusion of the first action, unless the action was
6 concluded as a result of voluntary discontinuance or
7 dismissal for failure or neglect to prosecute.
8 (f) This Section does not alter the law on tolling of
9 the statute of limitations and does not apply to a right of
10 action that accrued before the effective date of this Act.
11 Section 806. Remedies for fraud. Remedies for material
12 misrepresentation or fraud include all remedies available
13 under this Act for nonfraudulent breach of contract.
14 SUBPART B. DAMAGES
15 Section 807. Measurement of damages in general.
16 (a) Except as otherwise provided in the contract, an
17 aggrieved party may not recover compensation for that part of
18 a loss which could have been avoided by taking measures
19 reasonable under the circumstances to avoid or reduce loss.
20 The burden of establishing a failure of the aggrieved party
21 to take measures reasonable under the circumstances is on the
22 party in breach of contract.
23 (b) A party may not recover:
24 (1) consequential damages for losses resulting from
25 the content of published informational content unless the
26 agreement expressly so provides; or
27 (2) damages that are speculative.
28 (c) The remedy for breach of contract for disclosure or
29 misuse of information that is a trade secret or in which the
30 aggrieved party has a right of confidentiality includes as
31 consequential damages compensation for the benefit obtained
-97- LRB9110043MWgc
1 as a result of the breach.
2 (d) For purposes of this Act, market value is determined
3 as of the date of breach of contract and the place for
4 performance.
5 (e) Damages or expenses that relate to events after the
6 date of entry of judgment must be reduced to their present
7 value as of that date. In this subsection, "present value"
8 means the amount, as of a date certain, of one or more sums
9 payable in the future or the value of one or more
10 performances due in the future, discounted to the date
11 certain. The discount is determined by the interest rate
12 specified by the parties in their agreement unless that rate
13 was manifestly unreasonable when the agreement was entered
14 into. Otherwise, the discount is determined by a
15 commercially reasonable rate that takes into account the
16 circumstances of each case when the agreement was entered
17 into.
18 Section 808. Licensor's damages.
19 (a) In this Section, "substitute transaction" means a
20 transaction by the licensor which would not have been
21 possible except for the licensee's breach and which
22 transaction is for the same information or informational
23 rights with the same contractual use terms as the transaction
24 to which the licensee's breach applies.
25 (b) Except as otherwise provided in Section 807, a
26 breach of contract by a licensee entitles the licensor to
27 recover the following compensation for losses resulting in
28 the ordinary course from the breach, less expenses avoided as
29 a result of the breach, to the extent not otherwise accounted
30 for under this subsection:
31 (1) damages measured in any combination of the
32 following ways but not to exceed the contract fee and the
33 market value of other consideration required under the
-98- LRB9110043MWgc
1 contract for the performance that was the subject of the
2 breach:
3 (A) the amount of accrued and unpaid contract
4 fees and the market value of other consideration
5 earned but not received for:
6 (i) any performance accepted by the
7 licensee; and
8 (ii) any performance to which Section 604
9 applies;
10 (B) for performances not governed by
11 subparagraph (A), if the licensee repudiated or
12 wrongfully refused the performance or the licensor
13 rightfully canceled and the breach makes possible a
14 substitute transaction, the amount of loss as
15 determined by contract fees and the market value of
16 other consideration required under the contract for
17 the performance less:
18 (i) the contract fees and market value of
19 other consideration received from an actual and
20 commercially reasonable substitute transaction
21 entered into by the licensor in good faith and
22 without unreasonable delay; or
23 (ii) the market value of a commercially
24 reasonable hypothetical substitute transaction;
25 (C) for performances not governed by
26 subparagraph (A), if the breach does not make
27 possible a substitute transaction, lost profit,
28 including reasonable overhead, that the licensor
29 would have realized on acceptance and full payment
30 for performance that was not delivered to the
31 licensee because of the licensee's breach; or
32 (D) damages calculated in any reasonable
33 manner; and
34 (2) consequential and incidental damages.
-99- LRB9110043MWgc
1 Section 809. Licensee's damages.
2 (a) Subject to subsection (b) and except as otherwise
3 provided in Section 807, a breach of contract by a licensor
4 entitles the licensee to recover the following compensation
5 for losses resulting in the ordinary course from the breach
6 or, if appropriate, as to the whole contract, less expenses
7 avoided as a result of the breach to the extent not otherwise
8 accounted for under this Section:
9 (1) damages measured in any combination of the
10 following ways, but not to exceed the market value of the
11 performance that was the subject of the breach plus
12 restitution of any amounts paid for performance not
13 received and not accounted for within the indicated
14 recovery:
15 (A) with respect to performance that has been
16 accepted and the acceptance not rightfully revoked,
17 the value of the performance required less the value
18 of the performance accepted as of the time and place
19 of acceptance;
20 (B) with respect to performance that has not
21 been rendered or that was rightfully refused or
22 acceptance of which was rightfully revoked:
23 (i) the amount of any payments made and
24 the value of other consideration given to the
25 licensor with respect to that performance and
26 not previously returned to the licensee;
27 (ii) the market value of the performance
28 less the contract fee for that performance; or
29 (iii) the cost of a commercially
30 reasonable substitute transaction less the
31 contract fee under the breached contract, if
32 the substitute transaction was entered into by
33 the licensee in good faith and without
34 unreasonable delay for substantially similar
-100- LRB9110043MWgc
1 information with the same contractual use
2 terms; or
3 (C) damages calculated in any reasonable
4 manner; and
5 (2) incidental and consequential damages.
6 (b) The amount of damages must be reduced by any unpaid
7 contract fees for performance by the licensor which has been
8 accepted by the licensee and as to which the acceptance has
9 not been rightfully revoked.
10 Section 810. Recoupment.
11 (a) Except as otherwise provided in subsection (b), an
12 aggrieved party, upon notifying the party in breach of
13 contract of its intention to do so, may deduct all or any
14 part of the damages resulting from the breach from any
15 payments still due under the same contract.
16 (b) If a breach of contract is not material with
17 reference to the particular performance, an aggrieved party
18 may exercise its rights under subsection (a) only if the
19 agreement does not require further affirmative performance by
20 the other party and the amount of damages deducted can be
21 readily liquidated under the agreement.
22 SUBPART C. REMEDIES RELATED TO PERFORMANCE
23 Section 811. Specific performance.
24 (a) Specific performance may be ordered:
25 (1) if the agreement provides for that remedy, other
26 than an obligation for the payment of money;
27 (2) if the contract was not for personal services
28 and the agreed performance is unique; or
29 (3) in other proper circumstances.
30 (b) An order for specific performance may contain any
31 conditions considered just and must provide adequate
-101- LRB9110043MWgc
1 safeguards consistent with the contract to protect the
2 confidentiality of information, information, and
3 informational rights of both parties.
4 Section 812. Completing performance.
5 (a) On breach of contract by a licensee, the licensor
6 may:
7 (1) identify to the contract any conforming copy not
8 already identified if, at the time the licensor learned
9 of the breach, the copy was in its possession;
10 (2) in the exercise of reasonable commercial
11 judgment for purposes of avoiding loss and effective
12 realization on effort or investment, complete the
13 information and identify it to the contract, cease work
14 on it, relicense or dispose of it, or proceed in any
15 other commercially reasonable manner; and
16 (3) pursue any remedy for breach that has not been
17 waived.
18 (b) On breach by a licensee, both parties remain bound
19 by all contractual use terms.
20 Section 813. Continuing use. On breach of contract by a
21 licensor, the following rules apply:
22 (1) A licensee that has not canceled the contract
23 may continue to use the information and informational
24 rights under the contract. If the licensee continues to
25 use the information or informational rights, the licensee
26 is bound by all terms of the contract, including
27 contractual use terms, obligations not to compete, and
28 obligations to pay contract fees.
29 (2) The licensee may pursue any remedy for breach
30 which has not been waived.
31 (3) The licensor's rights remain in effect but are
32 subject to the licensee's remedy for breach, including
-102- LRB9110043MWgc
1 any right of recoupment or setoff.
2 Section 814. Discontinuing access. On material breach
3 of an access contract or if the agreement so provides, a
4 party may discontinue all contractual rights of access of the
5 party in breach and direct any person that is assisting the
6 performance of the contract to discontinue its performance.
7 Section 815. Right to possession and to prevent use.
8 (a) On cancellation of a license, the licensor has the
9 right:
10 (1) to possession of all copies of the licensed
11 information in the possession or control of the licensee
12 and any other materials pertaining to that information
13 which by contract are to be returned or delivered by the
14 licensee to the licensor; and
15 (2) to prevent the continued exercise of contractual
16 and informational rights in the licensed information
17 under the license.
18 (b) Except as otherwise provided in Section 814, a
19 licensor may exercise its rights under subsection (a) without
20 judicial process only if this can be done:
21 (1) without a breach of the peace;
22 (2) without a foreseeable risk of personal injury or
23 significant physical damage to information or property
24 other than the licensed information; and
25 (3) in accordance with Section 816.
26 (c) In a judicial proceeding, the court may enjoin a
27 licensee in breach of contract from continued use of the
28 information and informational rights and may order the
29 licensor or a judicial officer to take the steps described in
30 Section 618.
31 (d) A party has a right to an expedited judicial hearing
32 on a request for prejudgment relief to enforce or protect its
-103- LRB9110043MWgc
1 rights under this Section.
2 (e) The right to possession under this Section is not
3 available to the extent that the information, before breach
4 of the license and in the ordinary course of performance
5 under the license, was so altered or commingled that the
6 information is no longer identifiable or separable.
7 (f) A licensee that provides information to a licensor
8 subject to contractual use terms has the rights and is
9 subject to the limitations of a licensor under this Section
10 with respect to the information it provides.
11 Section 816. Limitations on electronic self-help.
12 (a) In this Section, "electronic self-help" means the
13 use of electronic means to exercise a licensor's rights under
14 Section 815(b).
15 (b) On cancellation of a license, electronic self-help
16 is not permitted, except as provided in this Section.
17 (c) A licensee shall separately manifest assent to a
18 term authorizing use of electronic self-help. The term must:
19 (1) provide for notice of exercise as provided in
20 subsection (d);
21 (2) state the name of the person designated by the
22 licensee to which notice of exercise must be given and
23 the manner in which notice must be given and place to
24 which notice must be sent to that person; and
25 (3) provide a simple procedure for the licensee to
26 change the designated person or place.
27 (d) Before resorting to electronic self-help authorized
28 by a term of the license, the licensor shall give notice in a
29 record to the person designated by the licensee stating:
30 (1) that the licensor intends to resort to
31 electronic self-help as a remedy on or after 15 days
32 following receipt by the licensee of the notice;
33 (2) the nature of the claimed breach that entitles
-104- LRB9110043MWgc
1 the licensor to resort to self-help; and
2 (3) the name, title, and address, including direct
3 telephone number, facsimile number, or e-mail address, to
4 which the licensee may communicate concerning the claimed
5 breach.
6 (e) A licensee may recover direct and incidental damages
7 caused by wrongful use of electronic self-help. The licensee
8 may also recover consequential damages for wrongful use of
9 electronic self-help, whether or not those damages are
10 excluded by the terms of the license, if:
11 (1) within the period specified in subsection
12 (d)(1), the licensee gives notice to the licensor's
13 designated person describing in good faith the general
14 nature and magnitude of damages;
15 (2) the licensor has reason to know the damages of
16 the type described in subsection (f) may result from the
17 wrongful use of electronic self-help; or
18 (3) the licensor does not provide the notice
19 required in subsection (d).
20 (f) Even if the licensor complies with subsections (c)
21 and (d), electronic self-help may not be used if the licensor
22 has reason to know that its use will result in substantial
23 injury or harm to the public health or safety or grave harm
24 to the public interest substantially affecting third persons
25 not involved in the dispute.
26 (g) A court of competent jurisdiction of this State
27 shall give prompt consideration to a petition for injunctive
28 relief and may enjoin, temporarily or permanently, the
29 licensor from exercising electronic self-help even if
30 authorized by a license term or enjoin the licensee from
31 misappropriation or misuse of computer information, as may be
32 appropriate, upon consideration of the following:
33 (1) grave harm of the kinds stated in subsection
34 (f), or the threat thereof, whether or not the licensor
-105- LRB9110043MWgc
1 has reason to know of those circumstances;
2 (2) irreparable harm or threat of irreparable harm
3 to the licensee or licensor;
4 (3) that the party seeking the relief is more likely
5 than not to succeed under its claim when it is finally
6 adjudicated;
7 (4) that all of the conditions to entitle a person
8 to the relief under the laws of this State have been
9 fulfilled; and
10 (5) that the party that may be adversely affected is
11 adequately protected against loss, including a loss
12 because of misappropriation or misuse of computer
13 information, that it may suffer because the relief is
14 granted under this Act.
15 (h) Before breach of contract, rights or obligations
16 under this Section may not be waived or varied by an
17 agreement, but the parties, in the term referred to in
18 subsection (c), may specify additional provisions more
19 favorable to the licensee.
20 (i) This Section does not apply if the licensor obtains
21 possession of a copy without a breach of the peace and the
22 electronic self-help is used solely with respect to that
23 copy.
24 PART 9
25 MISCELLANEOUS PROVISIONS
26 Section 901. Severability. If any provision of this Act
27 or its application to any person or circumstances is held
28 invalid, the invalidity does not affect other provisions or
29 applications of this Act which can be given effect without
30 the invalid provision or application, and to this end the
31 provisions of this Act are severable.
-106- LRB9110043MWgc
1 Section 902. Effective date. (See Section 999 for
2 effective date.)
3 Section 903. (Blank.)
4 Section 904. Previous rights and transactions.
5 Contracts that are enforceable and rights of action that
6 accrue before the effective date of this Act are governed by
7 the law then in effect unless the parties agree to be
8 governed by this Act.
9 Section 999. Effective date. This Act takes effect upon
10 becoming law.