What is The Uniform Commercial Code (UCC) & The Uniform Computer Information Transaction Act (UCCITA)?

                Before the UCC and the UCCITA, the government enacted the commerce clause. The commerce clause, which is Article 1, Section 8, Clause 3, of the U.S. Constitution gives Congress the power to regulate commerce between states. The Constitution put limits of state powers but also recognizes a states inherent right to the regulation of domestic commerce. “The exercise by Congress of its regulatory power has increased steadily with the growth and expansion of industry and means of transportation” (Farlex).

The Uniform Commercial Code is a set of laws that are used to govern the commercial transactions that go on in the United States. This code applies to the sale of goods as well are contracts, leases, and loans. The National Conference of Commissioners initially created the UCC. Although it is not a federal law, each of the 50 state’s legislature has either adopted the code verbatim or enacted a modified version.  (U.S. Small Business Administration) The Uniform Computer Information Transaction Act is more specifically focused on computer information transactions than the UCC. The major difference between the UCC and the UCITA is that Article 2 of the UCC only deals with the sale of goods, and disregards the types of contracts specifically referred to in the UCITA. The UCC only applies to transactions where the goods are “identifiable and moveable”(LAWINFO). The UCC also states that it only applies to sales and not licenses.

Legally, when you sell a product, the owner is exchanging all rights to the item for money. When someone is licensing something, they are granting someone permission to certain rights for a price. When a person is licensing something, they are still the owner of it. It is the difference between the complete transfer of rights and the limited transfer of rights. The significant problem with licensing is that it could replace sales all together, “without provision for the public policy goals embodied in copyright law”(National Academy Press).

The NCCUSL decided to propose UCITA as a separate uniform act because when they tried to add a new article to the UCC, the American Law Institute called for revisions in it. The NCCUSL did not think that revisions were necessary so they withdrew from the amendment process and recast it on their own without the ALI. UCITA is still today opposed by many including the Federal Trade Commission and the Attorneys General of over 20 states (Huggins). If the NCCUSL wouldn’t have proposed it be a separate act, they probably would not have been able to get the amendment added to the UCC because of all of the controversy.

Farlex. (n.d.). Commerce Clause. Retrieved on March 4, 2011 from http://legal-dictionary.thefreedictionary.com/Commerce+Clause.

Huggins, James S. (n.d.). UCITA: Uniform Computer Information Transactions Act. Retrieved on March 4, 2011 from http://www.jamesshuggins.com/h/tek1/ucita.htm.

LAWINFO. (n.d.). What is Article 2 of The U.C.C.?. Retrieved on March 4, 2011 from http://resources.lawinfo.com/en/Legal-FAQs/UCC-and-Warranties/Federal/what-is-article-2-of-the-ucc.html.

National Academy Press. (2000). “Licensing” vs. “Buying” Information: Legal and Policy Implications. Retrieved on March 4, 2011 from http://www.cni.org/tfms/2001a.spring/handout/Licensing-DArsenault2001Stf.pdf.