State of Illinois
91st General Assembly

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 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

 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.


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

 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.


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

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.


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.


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.


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.


 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.


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.


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.

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