Senate Bill No. 463–Committee on Judiciary

 

March 24, 2003

____________

 

Referred to Committee on Judiciary

 

SUMMARY—Adopts Uniform Computer Information Transactions Act. (BDR 8-1028)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to computer information transactions; adopting the Uniform Computer Information Transactions Act; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. Title 8 of NRS is hereby amended by adding

1-2  thereto a new chapter to consist of the provisions set forth as

1-3  sections 2 to 186, inclusive, of this act.

1-4  Sec. 2.  This chapter may be cited as the Uniform Computer

1-5  Information Transactions Act.

1-6  Sec. 3.  As used in this chapter, unless the context otherwise

1-7  requires, the words and terms defined in sections 4 to 80,

1-8  inclusive, of this act have the meanings ascribed to them in those

1-9  sections.

1-10      Sec. 4.  “Access contract” means a contract to obtain by

1-11  electronic means access to, or information from, an information

1-12  processing system of another person, or the equivalent of such

1-13  access.

1-14      Sec. 5.  “Access material” means any information or

1-15  material, such as a document, address or access code, that is

1-16  necessary to obtain authorized access to information or control or

1-17  possession of a copy.

1-18      Sec. 6.  “Aggrieved party” means a party entitled to a remedy

1-19  for breach of contract.

2-1  Sec. 7.  “Agreement” means the bargain of the parties in fact

2-2  as found in their language or by implication from other

2-3  circumstances, including course of performance, course of

2-4  dealing and usage of trade, as provided in this chapter.

2-5  Sec. 8.  “Attribution procedure” means a procedure to verify

2-6  that an electronic authentication, display, message, record or

2-7  performance is that of a particular person or to detect changes or

2-8  errors in information. The term includes a procedure that requires

2-9  the use of algorithms or other codes, identifying words or

2-10  numbers, encryption, or callback or other acknowledgment.

2-11      Sec. 9.  “Authenticate” means:

2-12      1.  To sign; or

2-13      2.  With the intent to sign a record, otherwise to execute or

2-14  adopt an electronic symbol, sound, message or process referring

2-15  to, attached to, included in, or logically associated or linked with,

2-16  that record.

2-17      Sec. 10.  “Automated transaction” means a transaction in

2-18  which a contract is formed in whole or part by electronic actions

2-19  of one or both parties which are not previously reviewed by an

2-20  individual in the ordinary course.

2-21      Sec. 11.  “Burden of establishing” a fact means the burden of

2-22  persuading the triers of fact that the existence of the fact is more

2-23  probable than its nonexistence.

2-24      Sec. 12.  “Cancellation” means the ending of a contract by a

2-25  party because of breach of contract by another party.

2-26      Sec. 13.  “Computer” means an electronic device that accepts

2-27  information in digital or similar form and manipulates it for a

2-28  result based on a sequence of instructions.

2-29      Sec. 14.  “Computer information” means information in

2-30  electronic form which is obtained from or through the use of a

2-31  computer or which is in a form capable of being processed by a

2-32  computer. The term includes a copy of the information and any

2-33  documentation or packaging associated with the copy.

2-34      Sec. 15.  “Computer information transaction” means an

2-35  agreement or the performance of it to create, modify, transfer or

2-36  license computer information or informational rights in computer

2-37  information. The term includes a support contract under section

2-38  152 of this act. The term does not include a transaction merely

2-39  because the parties’ agreement provides that their

2-40  communications about the transaction will be in the form of

2-41  computer information.

2-42      Sec. 16.  “Computer program” means a set of statements or

2-43  instructions to be used directly or indirectly in a computer to bring

2-44  about a certain result. The term does not include separately

2-45  identifiable informational content.

3-1  Sec. 17.  1.  “Consequential damages” resulting from

3-2  breach of contract includes:

3-3  (a) Any loss resulting from general or particular requirements

3-4  and needs of which the breaching party at the time of contracting

3-5  had reason to know and which could not reasonably be prevented;

3-6  and

3-7  (b) Any injury to an individual or damage to property other

3-8  than the subject matter of the transaction proximately resulting

3-9  from breach of warranty.

3-10      2.  The term does not include direct damages or incidental

3-11  damages.

3-12      Sec. 18.  “Conspicuous,” with reference to a term, means so

3-13  written, displayed or presented that a reasonable person against

3-14  which it is to operate ought to have noticed it. A term in an

3-15  electronic record intended to evoke a response by an electronic

3-16  agent is conspicuous if it is presented in a form that would enable

3-17  a reasonably configured electronic agent to take it into account or

3-18  react to it without review of the record by an individual.

3-19  Conspicuous terms include the following:

3-20      1.  With respect to a person:

3-21      (a) A heading in capitals in a size equal to or greater than, or

3-22  in contrasting type, font, or color to, the surrounding text;

3-23      (b) Language in the body of a record or display in larger or

3-24  other contrasting type, font, or color or set off from the

3-25  surrounding text by symbols or other marks that draw attention to

3-26  the language; and

3-27      (c) A term prominently referenced in an electronic record or

3-28  display which is readily accessible or reviewable from the record

3-29  or display; and

3-30      2.  With respect to a person or an electronic agent, a term or

3-31  reference to a term that is so placed in a record or display that the

3-32  person or electronic agent cannot proceed without taking action

3-33  with respect to the particular term or reference.

3-34      Sec. 19.  “Consumer” means an individual who is a licensee

3-35  of information or informational rights that the individual at the

3-36  time of contracting intended to be used primarily for personal,

3-37  family or household purposes. The term does not include an

3-38  individual who is a licensee primarily for professional or

3-39  commercial purposes, including agriculture, business

3-40  management, and investment management other than

3-41  management of the individual’s personal or family investments.

3-42      Sec. 20.  “Consumer contract” means a contract between a

3-43  merchant licensor and a consumer.

4-1  Sec. 21.  “Contract” means the total legal obligation resulting

4-2  from the parties’ agreement as affected by this chapter and other

4-3  applicable law.

4-4  Sec. 22.  “Contract fee” means the price, fee, rent or royalty

4-5  payable in a contract under this chapter or any part of the amount

4-6  payable.

4-7  Sec. 23.  “Contractual use term” means an enforceable term

4-8  that defines or limits the use, disclosure of, or access to licensed

4-9  information or informational rights, including a term that defines

4-10  the scope of a license.

4-11      Sec. 24.  “Copy” means the medium on which information is

4-12  fixed on a temporary or permanent basis and from which it can be

4-13  perceived, reproduced, used or communicated, either directly or

4-14  with the aid of a machine or device.

4-15      Sec. 25.  “Course of dealing” means a sequence of previous

4-16  conduct between the parties to a particular transaction which

4-17  establishes a common basis of understanding for interpreting their

4-18  expressions and other conduct.

4-19      Sec. 26.   “Course of performance” means repeated

4-20  performances, under a contract that involves repeated occasions

4-21  for performance, which are accepted or acquiesced in without

4-22  objection by a party having knowledge of the nature of the

4-23  performance and an opportunity to object to it.

4-24      Sec. 27.  “Court” includes an arbitration or other dispute-

4-25  resolution forum if the parties have agreed to the use of that

4-26  forum or its use is required by law.

4-27      Sec. 28.  “Delivery,” with respect to a copy, means the

4-28  voluntary physical or electronic transfer of possession or control.

4-29      Sec. 29.  “Direct damages” means compensation for losses

4-30  measured by paragraph (a) of subsection 2 of section 176 of this

4-31  act or paragraph (a) of subsection 1 of section 177 of this act. The

4-32  term does not include consequential damages or incidental

4-33  damages.

4-34      Sec. 30.  “Document of title” includes bill of lading, dock

4-35  warrant, dock receipt, warehouse receipt or order for the delivery

4-36  of goods, and also any other document which in the regular

4-37  course of business or financing is treated as adequately evidencing

4-38  that the person in possession of it is entitled to receive, hold and

4-39  dispose of the document and the goods it covers. To be a document

4-40  of title a document must purport to be issued by or addressed to a

4-41  bailee and purport to cover goods in the bailee’s possession which

4-42  are either identified or are fungible portions of an identified mass.

4-43      Sec. 31.  “Electronic” means relating to technology having

4-44  electrical, digital, magnetic, wireless, optical, electromagnetic or

4-45  similar capabilities.

5-1  Sec. 32.  “Electronic agent” means a computer program, or

5-2  electronic or other automated means, used independently to

5-3  initiate an action, or to respond to electronic messages or

5-4  performances, on the person’s behalf without review or action by

5-5  an individual at the time of the action or response to the message

5-6  or performance.

5-7  Sec. 33.  “Electronic message” means a record or display that

5-8  is stored, generated or transmitted by electronic means for the

5-9  purpose of communication to another person or electronic agent.

5-10      Sec. 34.   “Financial accommodation contract” means an

5-11  agreement under which a person extends a financial

5-12  accommodation to a licensee and which does not create a security

5-13  interest governed by NRS 104.9101 to 104.9709, inclusive. The

5-14  agreement may be in any form, including a license or lease.

5-15      Sec. 35.  1.  “Financial asset,” except as otherwise provided

5-16  in NRS 104.8103, means:

5-17      (a) A security;

5-18      (b) An obligation of a person or a share, participation or other

5-19  interest in a person or in property or an enterprise of a person,

5-20  which is, or is of a type, dealt in or traded on financial markets, or

5-21  which is recognized in any area in which it is issued or dealt in as

5-22  a medium for investment; or

5-23      (c) Any property that is held by a securities intermediary for

5-24  another person in a securities account if the securities

5-25  intermediary has expressly agreed with the other person that the

5-26  property is to be treated as a financial asset pursuant to the

5-27  provisions of NRS 104.8101 to 104.8511, inclusive.

5-28      2.  As context requires, the term means the interest itself or

5-29  the means by which a person’s claim to it is evidenced, including a

5-30  certificated or uncertificated security, a security certificate or a

5-31  security entitlement.

5-32      Sec. 36.  “Financial services transaction” means an

5-33  agreement that provides for, or a transaction that is, or entails

5-34  access to, use, transfer, clearance, settlement or processing of:

5-35      1.  A deposit, loan, funds or monetary value represented in

5-36  electronic form and stored or capable of storage by electronic

5-37  means and retrievable and transferable by electronic means, or

5-38  other right to payment to or from a person;

5-39      2.  An instrument or other item;

5-40      3.  A payment order, credit card transaction, debit card

5-41  transaction, funds transfer, automated clearinghouse transfer, or

5-42  similar wholesale or retail transfer of funds;

5-43      4.  A letter of credit, document of title, financial asset,

5-44  investment property, or similar asset held in a fiduciary or agency

5-45  capacity; or

6-1  5.  Related identifying, verifying, access-enabling, authorizing

6-2  or monitoring information.

6-3  Sec. 37.  1.  “Financier” means a person that provides a

6-4  financial accommodation to a licensee under a financial

6-5  accommodation contract and either:

6-6  (a) Becomes a licensee for the purpose of transferring or

6-7  sublicensing the license to the party to which the financial

6-8  accommodation is provided; or

6-9  (b) Obtains a contractual right under the financial

6-10  accommodation contract to preclude the licensee’s use of the

6-11  information or informational rights under a license in the event of

6-12  breach of the financial accommodation contract.

6-13      2.  The term does not include a person that selects, creates or

6-14  supplies the information that is the subject of the license, owns the

6-15  informational rights in the information, or provides support for,

6-16  modifications to, or maintenance of the information.

6-17      Sec. 38.  “Funds transfer” means the series of transactions,

6-18  beginning with the originator’s payment order, made for the

6-19  purpose of making payment to the beneficiary of the order. The

6-20  term includes any payment order issued by the originator’s bank

6-21  or an intermediary bank intended to carry out the originator’s

6-22  payment order. A funds transfer is completed by acceptance by the

6-23  beneficiary’s bank of a payment order for the benefit of the

6-24  beneficiary of the originator’s payment order.

6-25      Sec. 39.  “Good faith” means honesty in fact and the

6-26  observance of reasonable commercial standards of fair dealing.

6-27      Sec. 40.  “Goods” means all things that are movable at the

6-28  time relevant to the computer information transaction. The term

6-29  includes the unborn young of animals, growing crops, and other

6-30  identified things to be severed from realty which are covered by

6-31  NRS 104.2107. The term does not include computer information,

6-32  money, the subject matter of foreign exchange transactions,

6-33  documents, letters of credit, letter-of-credit rights, instruments,

6-34  investment property, accounts, chattel paper, deposit accounts or

6-35  general intangibles.

6-36      Sec. 41.  “Identification” has the meaning ascribed to it in

6-37  NRS 104.2501.

6-38      Sec. 42.  “Incidental damages” resulting from breach of

6-39  contract:

6-40      1.  Means compensation for any commercially reasonable

6-41  charges, expenses or commissions reasonably incurred by an

6-42  aggrieved party with respect to:

6-43      (a) Inspection, receipt, transmission, transportation, care or

6-44  custody of identified copies or information that is the subject of

6-45  the breach;

7-1  (b) Stopping delivery, shipment or transmission;

7-2  (c) Effecting cover or retransfer of copies or information after

7-3  the breach;

7-4  (d) Other efforts after the breach to minimize or avoid loss

7-5  resulting from the breach; and

7-6  (e) Matters otherwise incident to the breach; and

7-7  2.  Does not include consequential damages or direct

7-8  damages.

7-9  Sec. 43.  “Information” means data, text, images, sounds,

7-10  mask works or computer programs, including collections and

7-11  compilations of them.

7-12      Sec. 44.  “Information processing system” means an

7-13  electronic system for creating, generating, sending, receiving,

7-14  storing, displaying or processing information.

7-15      Sec. 45.  “Informational content” means information that is

7-16  intended to be communicated to or perceived by an individual in

7-17  the ordinary use of the information, or the equivalent of that

7-18  information.

7-19      Sec. 46.  “Informational rights” include all rights in

7-20  information created under laws governing patents, copyrights,

7-21  mask works, trade secrets, trademarks, publicity rights, or any

7-22  other law that gives a person, independently of contract, a right to

7-23  control or preclude another person’s use of or access to the

7-24  information on the basis of the rights holder’s interest in the

7-25  information.

7-26      Sec. 47.  “Instrument” means a negotiable instrument or any

7-27  other writing that evidences a right to the payment of a monetary

7-28  obligation, is not itself a security agreement or lease, and is of a

7-29  type that in ordinary course of business is transferred by delivery

7-30  with any necessary endorsement or assignment. The term does not

7-31  include investment property, letters of credit or writings that

7-32  evidence a right to payment arising out of the use of a credit or

7-33  charge card or information contained on or for use with the card.

7-34      Sec. 48.  “Insurance services transaction” means an

7-35  agreement between an insurer and an insured which provides for,

7-36  or a transaction that is, or entails access to, use, transfer,

7-37  clearance, settlement or processing of:

7-38      1.  An insurance policy, contract or certificate; or

7-39      2.  A right to payment under an insurance policy, contract or

7-40  certificate.

7-41      Sec. 49.  “Investment property” means a security, whether

7-42  certificated or uncertificated, security entitlement, securities

7-43  account, commodity contract or commodity account.

7-44      Sec. 50.  “Item” means an instrument or a promise or order

7-45  to pay money handled by a bank for collection or payment. The

8-1  term does not include a payment order governed by NRS

8-2  104A.4101 to 104A.4507, inclusive, or a credit or debit card slip.

8-3  Sec. 51.  “Knowledge,” with respect to a fact, means actual

8-4  knowledge of the fact.

8-5  Sec. 52.  “Letter of credit” means a definite undertaking that

8-6  satisfies the requirements of NRS 104.5104 by an issuer to a

8-7  beneficiary at the request or for the account of an applicant or, in

8-8  the case of a financial institution, to itself or for its own account,

8-9  to honor a documentary presentation by payment or delivery of an

8-10  item of value.

8-11      Sec. 53.  “License” means a contract that authorizes access

8-12  to, or use, distribution, performance, modification or reproduction

8-13  of, information or informational rights, but expressly limits the

8-14  access or uses authorized or expressly grants fewer than all rights

8-15  in the information, whether or not the transferee has title to a

8-16  licensed copy. The term includes an access contract, a lease of a

8-17  computer program, and a consignment of a copy. The term does

8-18  not include a reservation or creation of a security interest to the

8-19  extent the interest is governed by NRS 104.9101 to 104.9709,

8-20  inclusive.

8-21      Sec. 54.  “Licensee” means a person entitled by agreement to

8-22  acquire or exercise rights in, or to have access to or use of,

8-23  computer information under an agreement to which this chapter

8-24  applies. A licensor is not a licensee with respect to rights reserved

8-25  to it under the agreement.

8-26      Sec. 55.  “Licensor” means a person obligated by agreement

8-27  to transfer or create rights in, or to give access to or use of,

8-28  computer information or informational rights in it under an

8-29  agreement to which this chapter applies. Between the provider of

8-30  access and a provider of the informational content to be accessed,

8-31  the provider of content is the licensor. In an exchange of

8-32  information or informational rights, each party is a licensor with

8-33  respect to the information, informational rights, or access it gives.

8-34      Sec. 56.  “Mass-market license” means a standard form used

8-35  in a mass-market transaction.

8-36      Sec. 57.  “Mass-market transaction” means a transaction that

8-37  is:

8-38      1.  A consumer contract; or

8-39      2.  Any other transaction with an end-user licensee if:

8-40      (a) The transaction is for information or informational rights

8-41  directed to the general public as a whole, including consumers,

8-42  under substantially the same terms for the same information;

8-43      (b) The licensee acquires the information or informational

8-44  rights in a retail transaction under terms and in a quantity

8-45  consistent with an ordinary transaction in a retail market; and

9-1  (c) The transaction is not:

9-2       (1) A contract for redistribution or for public performance

9-3  or public display of a copyrighted work;

9-4       (2) A transaction in which the information is customized or

9-5  otherwise specially prepared by the licensor for the licensee, other

9-6  than minor customization using a capability of the information

9-7  intended for that purpose;

9-8       (3) A site license; or

9-9       (4) An access contract.

9-10      Sec. 58.  “Merchant” means a person:

9-11      1.  That deals in information or informational rights of the

9-12  kind involved in the transaction;

9-13      2.  That by the person’s occupation holds itself out as having

9-14  knowledge or skill peculiar to the relevant aspect of the business

9-15  practices or information involved in the transaction; or

9-16      3.  To which the knowledge or skill peculiar to the practices or

9-17  information involved in the transaction may be attributed by the

9-18  person’s employment of an agent or broker or other intermediary

9-19  that by its occupation holds itself out as having the knowledge or

9-20  skill.

9-21      Sec. 59.  “Nonexclusive license” means a license that does

9-22  not preclude the licensor from transferring to other licensees the

9-23  same information, informational rights or contractual rights

9-24  within the same scope. The term includes a consignment of a copy.

9-25      Sec. 60.  “Notice” of a fact means knowledge of the fact,

9-26  receipt of notification of the fact, or reason to know the fact exists.

9-27      Sec. 61.  “Notify” or “give notice” means to take such steps

9-28  as may be reasonably required to inform the other person in the

9-29  ordinary course, whether or not the other person actually comes to

9-30  know of it.

9-31      Sec. 62.  “Party” means a person that engages in a

9-32  transaction or makes an agreement under this chapter.

9-33      Sec. 63.  “Payment order” means an instruction of a sender

9-34  to a receiving bank, transmitted orally, electronically or in writing,

9-35  to pay, or to cause another bank to pay, a fixed or determinable

9-36  amount of money to a beneficiary if:

9-37      1.  The instruction does not state a condition to payment to the

9-38  beneficiary other than time of payment;

9-39      2.  The receiving bank is to be reimbursed by debiting an

9-40  account of, or otherwise receiving payment from, the sender; and

9-41      3.  The instruction is transmitted by the sender directly to the

9-42  receiving bank or to an agent, funds-transfer system, or

9-43  communication system for transmittal to the receiving bank.

9-44      Sec. 64.  “Person” means an individual, corporation,

9-45  business trust, estate, trust, partnership, limited-liability company,

10-1  association, joint venture, governmental subdivision,

10-2  instrumentality, or agency, public corporation, or any other legal

10-3  or commercial entity.

10-4      Sec. 65.  “Published informational content” means

10-5  informational content prepared for or made available to recipients

10-6  generally, or to a class of recipients, in substantially the same

10-7  form. The term does not include informational content that is:

10-8      1.  Customized for a particular recipient by one or more

10-9  individuals acting as or on behalf of the licensor, using judgment

10-10  or expertise; or

10-11     2.  Provided in a special relationship of reliance between the

10-12  provider and the recipient.

10-13     Sec. 66.  “Receipt” means:

10-14     1.  With respect to a copy, taking delivery; or

10-15     2.  With respect to a notice:

10-16     (a) Coming to a person’s attention; or

10-17     (b) Being delivered to and available at a location or system

10-18  designated by agreement for that purpose or, in the absence of an

10-19  agreed location or system:

10-20         (1) Being delivered at the person’s residence, or the

10-21  person’s place of business through which the contract was made,

10-22  or at any other place held out by the person as a place for receipt

10-23  of communications of the kind; or

10-24         (2) In the case of an electronic notice, coming into

10-25  existence in an information processing system or at an address in

10-26  that system in a form capable of being processed by or perceived

10-27  from a system of that type by a recipient, if the recipient uses, or

10-28  otherwise has designated or holds out, that place or system for

10-29  receipt of notices of the kind to be given and the sender does not

10-30  know that the notice cannot be accessed from that place.

10-31     Sec. 67.  “Receive” means to take receipt.

10-32     Sec. 68.  “Record” means information that is inscribed on a

10-33  tangible medium or that is stored in an electronic or other medium

10-34  and is retrievable in perceivable form.

10-35     Sec. 69.  “Release” means an agreement by a party not to

10-36  object to, or exercise any rights or pursue any remedies to limit,

10-37  the use of information or informational rights which agreement

10-38  does not require an affirmative act by the party to enable or

10-39  support the other party’s use of the information or informational

10-40  rights. The term includes a waiver of informational rights.

10-41     Sec. 70.  “Return,” with respect to a record containing

10-42  contractual terms that were rejected, refers only to the computer

10-43  information and means:

10-44     1.  In the case of a licensee that rejects a record regarding a

10-45  single information product transferred for a single contract fee, a

11-1  right to reimbursement of the contract fee paid from the person to

11-2  which it was paid or from another person that offers to reimburse

11-3  that fee, on:

11-4      (a) Submission of proof of purchase; and

11-5      (b) Proper redelivery of the computer information and all

11-6  copies within a reasonable time after initial delivery of the

11-7  information to the licensee;

11-8      2.  In the case of a licensee that rejects a record regarding an

11-9  information product provided as part of multiple information

11-10  products integrated into and transferred as a bundled whole but

11-11  retaining their separate identity:

11-12     (a) A right to reimbursement of any portion of the aggregate

11-13  contract fee identified by the licensor in the initial transaction as

11-14  charged to the licensee for all bundled information products

11-15  which was actually paid, on:

11-16         (1) Rejection of the record before or during the initial use

11-17  of the bundled product;

11-18         (2) Proper redelivery of all computer information products

11-19  in the bundled whole and all copies of them within a reasonable

11-20  time after initial delivery of the information to the licensee; and

11-21         (3) Submission of proof of purchase; or

11-22     (b) A right to reimbursement of any separate contract fee

11-23  identified by the licensor in the initial transaction as charged to

11-24  the licensee for the separate information product to which the

11-25  rejected record applies, on:

11-26         (1) Submission of proof of purchase; and

11-27         (2) Proper redelivery of that computer information product

11-28  and all copies within a reasonable time after initial delivery of the

11-29  information to the licensee; or

11-30     3.  In the case of a licensor that rejects a record proposed by

11-31  the licensee, a right to proper redelivery of the computer

11-32  information and all copies from the licensee, to stop delivery or

11-33  access to the information by the licensee, and to reimbursement

11-34  from the licensee of amounts paid by the licensor with respect to

11-35  the rejected record, on reimbursement to the licensee of contract

11-36  fees that it paid with respect to the rejected record, subject to

11-37  recoupment and setoff.

11-38     Sec. 71.  “Sale” consists in the passing of title from the seller

11-39  to the buyer for a price.

11-40     Sec. 72.  “Scope” means the terms of a license describing the:

11-41     1.  Licensed copies, information or informational rights

11-42  involved;

11-43     2.  Use or access authorized, prohibited or controlled;

11-44     3.  Geographic area, market or location; or

11-45     4.  Duration of the license.

12-1      Sec. 73.  “Seasonable,” with respect to an act, means taken

12-2  within the time agreed or, if no time is agreed, within a reasonable

12-3  time.

12-4      Sec. 74.  “Send” means, with any costs provided for and

12-5  properly addressed or directed as reasonable under the

12-6  circumstances or as otherwise agreed, to deposit a record in the

12-7  mail or with a commercially reasonable carrier, to deliver a record

12-8  for transmission to or re-creation in another location or

12-9  information processing system, or to take the steps necessary to

12-10  initiate transmission to or re-creation of a record in another

12-11  location or information processing system. In addition, with

12-12  respect to an electronic message, the message must be in a form

12-13  capable of being processed by or perceived from a system of the

12-14  type the recipient uses or otherwise has designated or held out as a

12-15  place for the receipt of communications of the kind sent. Receipt

12-16  within the time in which it would have arrived if properly sent has

12-17  the effect of a proper sending.

12-18     Sec. 75.  “Standard form” means a record or a group of

12-19  related records containing terms prepared for repeated use in

12-20  transactions and so used in a transaction in which there was no

12-21  negotiated change of terms by individuals except to set the price,

12-22  quantity, method of payment, selection among standard options, or

12-23  time or method of delivery.

12-24     Sec. 76.  “State” means a state of the United States, the

12-25  District of Columbia, Puerto Rico, the United States Virgin

12-26  Islands, or any territory or insular possession subject to the

12-27  jurisdiction of the United States.

12-28     Sec. 77.  “Term,” with respect to an agreement, means that

12-29  portion of the agreement which relates to a particular matter.

12-30     Sec. 78.  “Termination” means the ending of a contract by a

12-31  party pursuant to a power created by agreement or law otherwise

12-32  than because of breach of contract.

12-33     Sec. 79.  “Transfer”:

12-34     1.  With respect to a contractual interest, includes an

12-35  assignment of the contract, but does not include an agreement

12-36  merely to perform a contractual obligation or to exercise

12-37  contractual rights through a delegate or sublicensee; and

12-38     2.  With respect to computer information, includes a sale,

12-39  license, or lease of a copy of the computer information and a

12-40  license or assignment of informational rights in computer

12-41  information.

12-42     Sec. 80.  “Usage of trade” means any practice or method of

12-43  dealing that has such regularity of observance in a place, vocation

12-44  or trade as to justify an expectation that it will be observed with

12-45  respect to the transaction in question.

13-1      Sec. 81.  1.  The provisions of this chapter apply to computer

13-2  information transactions.

13-3      2.  Except for subject matter excluded in subsection 4, if a

13-4  computer information transaction includes subject matter other

13-5  than computer information or subject matter excluded under

13-6  subsection 4, the following rules apply:

13-7      (a) If a transaction includes computer information and goods,

13-8  the provisions of this chapter apply to the part of the transaction

13-9  involving computer information, informational rights in it, and

13-10  creation or modification of it. However, if a copy of a computer

13-11  program is contained in and sold or leased as part of goods, the

13-12  provisions of this chapter apply to the copy and the computer

13-13  program only if:

13-14         (1) The goods are a computer or computer peripheral; or

13-15         (2) Giving the buyer or lessee of the goods access to or use

13-16  of the program is ordinarily a material purpose of transactions in

13-17  goods of the type sold or leased.

13-18     (b) Subject to subparagraph (1) of paragraph (c) of subsection

13-19  4, if a transaction includes an agreement for creating, or for

13-20  obtaining rights to create, computer information and a motion

13-21  picture, the provisions of this chapter do not apply to the

13-22  agreement if the dominant character of the agreement is to create

13-23  or obtain rights to create a motion picture. In all other such

13-24  agreements, the provisions of this chapter do not apply to the part

13-25  of the agreement that involves a motion picture excluded under

13-26  paragraph (c) of subsection 4, but does apply to the computer

13-27  information.

13-28     (c) In all other cases, the provisions of this chapter apply to the

13-29  entire transaction if the computer information and informational

13-30  rights, or access to them, is the primary subject matter, but

13-31  otherwise applies only to the part of the transaction involving

13-32  computer information, informational rights in it, and creation or

13-33  modification of it.

13-34     3.  To the extent of a conflict between the provisions of this

13-35  chapter and the provisions of NRS 104.9101 to 104.9709,

13-36  inclusive, the provisions of NRS 104.9101 to 104.9709, inclusive,

13-37  govern.

13-38     4.  The provisions of this chapter do not apply to:

13-39     (a) A financial services transaction;

13-40     (b) An insurance services transaction;

13-41     (c) An agreement to create, perform or perform in, include

13-42  information in, acquire, use, distribute, modify, reproduce, have

13-43  access to, adapt, make available, transmit, license or display:

13-44         (1) A motion picture or audio or visual programming, other

13-45  than in:

14-1              (I) A mass-market transaction; or

14-2              (II) A submission of an idea or information or release of

14-3  informational rights that may result in making a motion picture or

14-4  similar information product; or

14-5          (2) A sound recording, musical work, or phonorecord as

14-6  defined or used in Title 17 of the United States Code as of July 1,

14-7  1999, or an enhanced sound recording, other than in the

14-8  submission of an idea or information or release of informational

14-9  rights that may result in the creation of such material or a similar

14-10  information product;

14-11     (d) A compulsory license;

14-12     (e) A contract of employment of an individual, other than an

14-13  individual hired as an independent contractor to create or modify

14-14  computer information, unless the independent contractor is a

14-15  freelancer in the news reporting industry as that term is commonly

14-16  understood in that industry;

14-17     (f) A contract that does not require that information be

14-18  furnished as computer information or a contract in which, under

14-19  the agreement, the form of the information as computer

14-20  information is otherwise insignificant with respect to the primary

14-21  subject matter of the part of the transaction pertaining to the

14-22  information;

14-23     (g) Unless otherwise agreed between the parties in a record:

14-24         (1) Telecommunications products or services provided

14-25  pursuant to federal or state tariffs; or

14-26         (2) Telecommunications products or services provided

14-27  pursuant to agreements required or permitted to be filed by the

14-28  service provider with a federal or state authority regulating those

14-29  services or under pricing subject to approval by a federal or state

14-30  regulatory authority; or

14-31     (h) Subject matter within the scope of NRS 104.3101 to

14-32  104.3605, inclusive, 104.4101 to 104.4504, inclusive, 104.5101

14-33  to 104.5118, inclusive, 104.7101 to 104.7603, inclusive, 104.8101

14-34  to 104.8511, inclusive, or 104A.4101 to 104A.4507, inclusive.

14-35     5.  As used in this section:

14-36     (a) “Audio or visual programming” means audio or visual

14-37  programming that is provided by broadcast, satellite or cable, as

14-38  defined or used in the Communications Act of 1934 and related

14-39  regulations as they existed on July 1, 1999, or by similar methods

14-40  of delivery.

14-41     (b) “Enhanced sound recording” means a separately

14-42  identifiable product or service the dominant character of which

14-43  consists of recorded sounds, but which includes:

15-1          (1) Statements or instructions whose purpose is to allow or

15-2  control the perception, reproduction or communication of those

15-3  sounds; or

15-4          (2) Other information, as long as recorded sounds

15-5  constitute the dominant character of the product or service.

15-6      (c) “Motion picture” means:

15-7          (1) “Motion picture” as defined in Title 17 of the United

15-8  States Code as of July 1, 1999; or

15-9          (2) A separately identifiable product or service the

15-10  dominant character of which consists of a linear motion picture,

15-11  but which includes:

15-12             (I) Statements or instructions whose purpose is to allow

15-13  or control the perception, reproduction or communication of the

15-14  motion picture; or

15-15             (II) Other information, as long as the motion picture

15-16  constitutes the dominant character of the product or service.

15-17     Sec. 82.  1.  As used in this section, “consumer protection

15-18  law” means a consumer protection statute, rule or regulation, or

15-19  other state executive or legislative action that has the effect of law

15-20  and any applicable judicial or administrative decisions

15-21  interpreting those statutes, rules, regulations or actions.

15-22     2.  Except as otherwise provided in this section, the provisions

15-23  of this chapter do not limit, modify or supersede a consumer

15-24  protection law.

15-25     3.  If a consumer protection law requires a term to be

15-26  conspicuous, the standard of conspicuousness under the consumer

15-27  protection law applies. However, a provision in the consumer

15-28  protection law requiring a term to be conspicuous does not

15-29  preclude the term from being presented electronically.

15-30     4.  Subject to section 186 of this act, if a consumer protection

15-31  law requires a writing or a signature, a record or an

15-32  authentication suffices.

15-33     5.  If a consumer protection law addresses assent, consent or

15-34  manifestation of assent, the standard of assent, consent or

15-35  manifestation of assent under the consumer protection law applies

15-36  and, subject to section 186 of this act, may be accomplished

15-37  electronically.

15-38     6.  The applicability of a consumer protection law is

15-39  determined by that law as it would have applied in the absence of

15-40  this chapter.

15-41     7.  Among the consumer protection laws of this state which

15-42  apply to the subject matter of this chapter are NRS 598.0903 to

15-43  598.0999, inclusive.

15-44     Sec. 83.  1.  A provision of this chapter which is preempted

15-45  by federal law is unenforceable to the extent of the preemption.

16-1      2.  If a term of a contract violates a fundamental public

16-2  policy, the court may refuse to enforce the contract, enforce the

16-3  remainder of the contract without the impermissible term, or limit

16-4  the application of the impermissible term so as to avoid a result

16-5  contrary to public policy, in each case to the extent that the

16-6  interest in enforcement is clearly outweighed by a public policy

16-7  against enforcement of the term.

16-8      3.  In a transaction in which a copy of computer information

16-9  in its final form is made generally available, a term of a contract is

16-10  unenforceable to the extent that the term prohibits an end-user

16-11  licensee from engaging in otherwise lawful public discussion

16-12  relating to the computer information. However, this subsection

16-13  does not preclude enforcement of a term that establishes or

16-14  enforces rights under trade secret, trademark, defamation,

16-15  commercial disparagement or other laws. This subsection does not

16-16  alter the applicability of subsection 2 to any term not rendered

16-17  unenforceable under this subsection.

16-18     4.  The provisions of this chapter do not apply to an

16-19  intellectual property notice that is based solely on intellectual

16-20  property rights and is not part of a contract. The effect of such a

16-21  notice is determined by law other than those in this chapter.

16-22     5.  The provisions of chapter 720 of NRS govern in the case of

16-23  a conflict between this chapter and the other law.

16-24     Sec. 84.  1.  This chapter must be liberally construed and

16-25  applied to promote its underlying purposes and policies to:

16-26     (a) Support and facilitate the realization of the full potential of

16-27  computer information transactions;

16-28     (b) Clarify the law governing computer information

16-29  transactions;

16-30     (c) Enable expanding commercial practice in computer

16-31  information transactions by commercial usage and agreement of

16-32  the parties;

16-33     (d) Promote uniformity of the law with respect to the subject

16-34  matter of this chapter among states that enact it; and

16-35     (e) Permit the continued expansion of commercial practices in

16-36  the excluded transactions through custom, usage and agreement

16-37  of the parties.

16-38     2.  Except as otherwise provided in subsection 1 of section 91

16-39  of this act, the use of mandatory language or the absence of a

16-40  phrase such as “unless otherwise agreed” in a provision of this

16-41  chapter does not preclude the parties from varying the effect of the

16-42  provision by agreement.

16-43     3.  The fact that a provision of this chapter imposes a

16-44  condition for a result does not by itself mean that the absence of

16-45  that condition yields a different result.

17-1      4.  To be enforceable, a term need not be conspicuous,

17-2  negotiated, or expressly assented or agreed to, unless this chapter

17-3  expressly so requires.

17-4      5.  Section headings are part of this chapter, but subsection

17-5  headings and paragraph headings are not.

17-6      Sec. 85.  1.  A record or authentication may not be denied

17-7  legal effect or enforceability solely because it is in electronic form.

17-8      2.  The provisions of this chapter do not require that a record

17-9  or authentication be generated, stored, sent, received, or otherwise

17-10  processed by electronic means or in electronic form.

17-11     3.  In any transaction, a person may establish requirements

17-12  regarding the type of authentication or record acceptable to it.

17-13     4.  A person that uses an electronic agent that it has selected

17-14  for making an authentication, performance or agreement,

17-15  including manifestation of assent, is bound by the operations of

17-16  the electronic agent, even if no individual was aware of or

17-17  reviewed the agent’s operations or the results of the operations.

17-18     Sec. 86.  1.  Authentication may be proven in any manner,

17-19  including a showing that a party made use of information or

17-20  access that could have been available only if it engaged in conduct

17-21  or operations that authenticated the record or term.

17-22     2.  Compliance with a commercially reasonable attribution

17-23  procedure agreed to or adopted by the parties or established by law

17-24  for authenticating a record authenticates the record as a matter of

17-25  law.

17-26     Sec. 87.  1.  The parties in their agreement may choose the

17-27  applicable law. However, the choice is not enforceable in a

17-28  consumer contract to the extent it would vary a rule that may not

17-29  be varied by agreement under the law of the jurisdiction whose

17-30  law would apply under subsections 2 and 3 in the absence of the

17-31  agreement.

17-32     2.  In the absence of an enforceable agreement on choice of

17-33  law, the following rules determine which jurisdiction’s law

17-34  governs in all respects for purposes of contract law:

17-35     (a) An access contract or a contract providing for electronic

17-36  delivery of a copy is governed by the law of the jurisdiction in

17-37  which the licensor was located when the agreement was entered

17-38  into.

17-39     (b) A consumer contract that requires delivery of a copy on a

17-40  tangible medium is governed by the law of the jurisdiction in

17-41  which the copy is or should have been delivered to the consumer.

17-42     (c) In all other cases, the contract is governed by the law of the

17-43  jurisdiction having the most significant relationship to the

17-44  transaction.

18-1      3.  In cases governed by subsection 2, if the jurisdiction whose

18-2  law governs is outside the United States, the law of that

18-3  jurisdiction governs only if it provides substantially similar

18-4  protections and rights to a party not located in that jurisdiction as

18-5  are provided under this chapter. Otherwise, the law of the state

18-6  that has the most significant relationship to the transaction

18-7  governs.

18-8      4.  For purposes of this section, a party is located at its place

18-9  of business if it has one place of business, at its chief executive

18-10  office if it has more than one place of business, or at its place of

18-11  incorporation or primary registration if it does not have a physical

18-12  place of business. Otherwise, a party is located at its primary

18-13  residence.

18-14     Sec. 88.  1.  The parties in their agreement may choose an

18-15  exclusive judicial or arbitral forum unless the choice is

18-16  unreasonable or unjust.

18-17     2.  A judicial forum specified in an agreement is not exclusive

18-18  unless the agreement expressly so provides.

18-19     3.  The enforceability of an agreed choice of exclusive forum

18-20  is a question for determination by a court of competent

18-21  jurisdiction in the state in which the action is brought.

18-22     Sec. 89.  1.  If a court as a matter of law finds a contract or

18-23  a term thereof to have been unconscionable at the time it was

18-24  made, the court may refuse to enforce the contract, enforce the

18-25  remainder of the contract without the unconscionable term, or

18-26  limit the application of the unconscionable term so as to avoid an

18-27  unconscionable result.

18-28     2.  If it is claimed or appears to the court that a contract or

18-29  term thereof may be unconscionable, the parties must be afforded

18-30  a reasonable opportunity to present evidence as to its commercial

18-31  setting, purpose and effect to aid the court in making the

18-32  determination.

18-33     Sec. 90.  1.  A person manifests assent to a record or term if

18-34  the person, acting with knowledge of, or after having an

18-35  opportunity to review the record or term, or a copy of it:

18-36     (a) Authenticates the record or term with intent to adopt or

18-37  accept it; or

18-38     (b) Intentionally engages in conduct or makes statements with

18-39  reason to know that the other party or its electronic agent may

18-40  infer from the conduct or statement that the person assents to the

18-41  record or term.

18-42     2.  An electronic agent manifests assent to a record or term if,

18-43  after having an opportunity to review it, the electronic agent:

18-44     (a) Authenticates the record or term; or

19-1      (b) Engages in operations that in the circumstances indicate

19-2  acceptance of the record or term.

19-3      3.  If the provisions of this chapter or other law requires

19-4  assent to a specific term, a manifestation of assent must relate

19-5  specifically to the term.

19-6      4.  Conduct or operations manifesting assent may be proved in

19-7  any manner, including a showing that a person or an electronic

19-8  agent obtained or used the information or informational rights

19-9  and that a procedure existed by which a person or an electronic

19-10  agent must have engaged in the conduct or operations in order to

19-11  do so. Proof of compliance with paragraph (b) of subsection 1 is

19-12  sufficient if there is conduct that assents and subsequent conduct

19-13  that reaffirms assent by electronic means.

19-14     5.  The effect of this section may be modified by an agreement

19-15  setting out standards applicable to future transactions between the

19-16  parties.

19-17     6.  Providers of online services, network access, and

19-18  telecommunications services, or the operators of facilities thereof,

19-19  do not manifest assent to a contractual relationship simply by their

19-20  provision of those services to other parties, including, without

19-21  limitation, transmission, routing or providing connections,

19-22  linking, caching, hosting, information location tools, and storage

19-23  of materials, at the request or initiation of a person other than the

19-24  service provider.

19-25     Sec. 91.  1.  A person has an opportunity to review a record

19-26  or term only if it is made available in a manner that ought to call it

19-27  to the attention of a reasonable person and permit review.

19-28     2.  An electronic agent has an opportunity to review a record

19-29  or term only if it is made available in a manner that would enable

19-30  a reasonably configured electronic agent to react to the record or

19-31  term.

19-32     3.  If a record or term is available for review only after a

19-33  person becomes obligated to pay or begins its performance, the

19-34  person has an opportunity to review only if it has a right to a

19-35  return if it rejects the record. However, a right to a return is not

19-36  required if:

19-37     (a) The record proposes a modification of contract or provides

19-38  particulars of performance under section 116 of this act; or

19-39     (b) The primary performance is other than delivery or

19-40  acceptance of a copy, the agreement is not a mass-market

19-41  transaction, and the parties at the time of contracting had reason

19-42  to know that a record or term would be presented after

19-43  performance, use or access to the information began.

19-44     4.  The right to a return under this section may arise by law or

19-45  agreement.

20-1      5.  The effect of this section may be modified by an agreement

20-2  setting out standards applicable to future transactions between the

20-3  parties.

20-4      Sec. 92.  1.  This section applies to a licensor that makes its

20-5  computer information available to a licensee by electronic means

20-6  from its Internet or similar electronic site.

20-7      2.  In such a case, the licensor affords an opportunity to

20-8  review the terms of a standard form license which opportunity

20-9  satisfies section 91 of this act with respect to a licensee that

20-10  acquires the information from that site, if the licensor:

20-11     (a) Makes the standard terms of the license readily available

20-12  for review by the licensee before the information is delivered or

20-13  the licensee becomes obligated to pay, whichever occurs first, by:

20-14         (1) Displaying prominently and in close proximity to a

20-15  description of the computer information, or to instructions or steps

20-16  for acquiring it, the standard terms or a reference to an electronic

20-17  location from which they can be readily obtained; or

20-18         (2) Disclosing the availability of the standard terms in a

20-19  prominent place on the site from which the computer information

20-20  is offered and promptly furnishing a copy of the standard terms on

20-21  request before the transfer of the computer information; and

20-22     (b) Does not take affirmative acts to prevent printing or

20-23  storage of the standard terms for archival or review purposes by

20-24  the licensee.

20-25     3.  Failure to provide an opportunity to review under this

20-26  section does not preclude a person from providing a person an

20-27  opportunity to review by other means pursuant to section 91 of this

20-28  act or law other than this chapter.

20-29     Sec. 93.  1.  Except as otherwise provided in subsection 2,

20-30  the effect of any provision of this chapter, including an allocation

20-31  of risk or imposition of a burden, may be varied by agreement of

20-32  the parties.

20-33     2.  The following rules are not variable by agreement:

20-34     (a) Obligations of good faith, diligence, reasonableness and

20-35  care imposed by this chapter may not be disclaimed by agreement,

20-36  but the parties by agreement may determine the standards by

20-37  which the performance of the obligation is to be measured if the

20-38  standards are not manifestly unreasonable.

20-39     (b) The limitations on enforceability imposed by

20-40  unconscionability under section 89 of this act and fundamental

20-41  public policy under subsection 2 of section 83 of this act may not

20-42  be varied by agreement.

20-43     (c) Limitations on enforceability of, or agreement to, a

20-44  contract, term or right expressly stated in the sections listed in the

21-1  following subparagraphs may not be varied by agreement except

21-2  to the extent provided in each section:

21-3          (1) The limitations on agreed choice of law in subsection 1

21-4  of section 87 of this act;

21-5          (2) The limitations on agreed choice of forum in section 88

21-6  of this act;

21-7          (3) The requirements for manifesting assent and

21-8  opportunity for review in section 90 of this act;

21-9          (4) The limitations on enforceability in section 97 of this

21-10  act;

21-11         (5) The limitations on a mass-market license in section 105

21-12  of this act;

21-13         (6) The consumer defense arising from an electronic error

21-14  in section 109 of this act;

21-15         (7) The requirements for an enforceable term in subsection

21-16  2 of section 114 of this act, subsection 6 of section 118 of this act,

21-17  subsections 2 and 3 of section 125 of this act and subsection 1 of

21-18  section 172 of this act;

21-19         (8) The requirements of paragraph (b) of subsection 2 of

21-20  section 115 of this act;

21-21         (9) The limitations on a financier in sections 136 to 140,

21-22  inclusive, of this act;

21-23         (10) The restrictions on altering the period of limitations in

21-24  subsections 1 and 2 of section 173 of this act; and

21-25         (11) The limitations on self-help repossession in subsection

21-26  2 of section 183 of this act and section 184 of this act.

21-27     Sec. 94.  1.  Unless displaced by this chapter, principles of

21-28  law and equity, including the law merchant and the common law

21-29  of this state relative to capacity to contract, principal and agent,

21-30  estoppel, duress, coercion, mistake, and other validating or

21-31  invalidating cause, supplement this chapter. Among the laws

21-32  supplementing and not displaced by this chapter are trade secret

21-33  laws, unfair competition laws, and the law of fraud,

21-34  misrepresentation, and unfair and deceptive practices, including

21-35  application of such laws as they may deal with failure to disclose

21-36  defects.

21-37     2.  Every contract or duty within the scope of this chapter

21-38  imposes an obligation of good faith in its performance or

21-39  enforcement.

21-40     3.  Any usage of trade in the vocation or trade in which the

21-41  parties are engaged or of which the parties are or should be aware

21-42  and any course of dealing or course of performance between the

21-43  parties are relevant to determining the existence or meaning of an

21-44  agreement.

21-45     Sec. 95.  1.  Questions to be determined by the court include:

22-1      (a) Whether a term is conspicuous;

22-2      (b) Whether a term is enforceable under subsection 1, 2 or 3 of

22-3  section 83 of this act, section 88 or 89 of this act or subsection 1 of

22-4  section 105 of this act; and

22-5      (c) Whether an attribution procedure is commercially

22-6  reasonable or effective under section 86, 108 or 109 of this act.

22-7      2.  Whether an agreement has legal consequences is

22-8  determined by the provisions of this chapter.

22-9      3.  Whenever the provisions of this chapter require any action

22-10  to be taken within a reasonable time, the following rules apply:

22-11     (a) What is a reasonable time for taking the action depends on

22-12  the nature, purpose and circumstances of the action.

22-13     (b) Any time that is not manifestly unreasonable may be fixed

22-14  by agreement.

22-15     4.  A person has reason to know a fact if the person has

22-16  knowledge of the fact or, from all the facts and circumstances

22-17  known to the person without investigation, the person should be

22-18  aware that the fact exists.

22-19     Sec. 96.  1.  As used in this section, “interoperability” means

22-20  the ability of computer programs to exchange information and of

22-21  such programs mutually to use the information that has been

22-22  exchanged.

22-23     2.  Notwithstanding the terms of a contract subject to this

22-24  chapter, a licensee that lawfully obtained the right to use a copy of

22-25  a computer program may identify, analyze and use those elements

22-26  of the program necessary to achieve interoperability of an

22-27  independently created computer program with other programs,

22-28  including adapting or modifying the licensee’s computer program,

22-29  if:

22-30     (a) The elements have not previously been readily available to

22-31  the licensee;

22-32     (b) The identification, analysis or use is performed solely for

22-33  the purpose of enabling such interoperability; and

22-34     (c) The identification, analysis or use is not prohibited by law

22-35  other than this chapter.

22-36     3.  Identification, analysis or use of elements of a computer

22-37  program for a purpose other than described in this section is

22-38  governed by subsection 2 of section 83 of this act, if applicable.

22-39     Sec. 97.  1.  Except as otherwise provided in this section, a

22-40  contract requiring payment of a contract fee of $5,000 or more is

22-41  not enforceable by way of action or defense unless:

22-42     (a) The party against which enforcement is sought

22-43  authenticated a record sufficient to indicate that a contract has

22-44  been formed and which reasonably identifies the copy or subject

22-45  matter to which the contract refers; or

23-1      (b) The agreement is a license for an agreed duration of 1 year

23-2  or less or which may be terminated at will by the party against

23-3  which the contract is asserted.

23-4      2.  A record is sufficient under subsection 1 even if it omits or

23-5  incorrectly states a term, but the contract is not enforceable under

23-6  that subsection beyond the number of copies or subject matter

23-7  shown in the record.

23-8      3.  A contract that does not satisfy the requirements of

23-9  subsection 1 is nevertheless enforceable under that subsection if:

23-10     (a) A performance was tendered or the information was made

23-11  available by one party and the tender was accepted or the

23-12  information accessed by the other; or

23-13     (b) The party against which enforcement is sought admits in

23-14  court, by pleading or by testimony or otherwise under oath, facts

23-15  sufficient to indicate a contract has been made, but the agreement

23-16  is not enforceable under this paragraph beyond the number of

23-17  copies or the subject matter admitted.

23-18     4.  Between merchants, if, within a reasonable time, a record

23-19  in confirmation of the contract and sufficient against the sender is

23-20  received and the party receiving it has reason to know its contents,

23-21  the record satisfies subsection 1 against the party receiving it

23-22  unless notice of objection to its contents is given in a record within

23-23  a reasonable time after the confirming record is received.

23-24     5.  An agreement that the requirements of this section need

23-25  not be satisfied as to future transactions is effective if evidenced in

23-26  a record authenticated by the person against which enforcement is

23-27  sought.

23-28     6.  A transaction within the scope of this chapter is not subject

23-29  to a statute of frauds contained in another law of this state.

23-30     Sec. 98.  1.  A contract may be formed in any manner

23-31  sufficient to show agreement, including offer and acceptance or

23-32  conduct of both parties or operations of electronic agents which

23-33  recognize the existence of a contract.

23-34     2.  If the parties so intend, an agreement sufficient to

23-35  constitute a contract may be found even if the time of its making is

23-36  undetermined, one or more terms are left open or to be agreed on,

23-37  the records of the parties do not otherwise establish a contract, or

23-38  one party reserves the right to modify terms.

23-39     3.  Even if one or more terms are left open or to be agreed

23-40  upon, a contract does not fail for indefiniteness if the parties

23-41  intended to make a contract and there is a reasonably certain basis

23-42  for giving an appropriate remedy.

23-43     4.  In the absence of conduct or performance by both parties

23-44  to the contrary, a contract is not formed if there is a material

23-45  disagreement about a material term, including a term concerning

24-1  scope. For purposes of this subsection, the material disagreement

24-2  must exist at the time of attempted contracting and may not

24-3  involve a later dispute about the meaning of agreed terms.

24-4      5.  If a term is to be adopted by later agreement and the

24-5  parties intend not to be bound unless the term is so adopted, a

24-6  contract is not formed if the parties do not agree to the term. In

24-7  that case, each party shall deliver to the other party, or with the

24-8  consent of the other party destroy, all copies of information, access

24-9  materials, and other materials received or made, and each party is

24-10  entitled to a return with respect to any contract fee paid for which

24-11  performance has not been received, has not been accepted, or has

24-12  been redelivered without any benefit being retained. The parties

24-13  remain bound by any restriction in a contractual use term with

24-14  respect to information or copies received or made from copies

24-15  received pursuant to the agreement, but the contractual use term

24-16  does not apply to information or copies properly received or

24-17  obtained from another source.

24-18     Sec. 99.  1.  An offer to make a contract invites acceptance

24-19  in any manner and by any medium reasonable under the

24-20  circumstances.

24-21     2.  An order or other offer to acquire a copy for prompt or

24-22  current delivery invites acceptance by either a prompt promise to

24-23  ship or a prompt or current shipment of a conforming or

24-24  nonconforming copy. However, a shipment of a nonconforming

24-25  copy is not an acceptance if the licensor seasonably notifies the

24-26  licensee that the shipment is offered only as an accommodation to

24-27  the licensee.

24-28     3.  If the beginning of a requested performance is a

24-29  reasonable mode of acceptance, an offeror that is not notified of

24-30  acceptance or performance within a reasonable time may treat the

24-31  offer as having lapsed before acceptance.

24-32     4.  If an offer in an electronic message evokes an electronic

24-33  message accepting the offer, a contract is formed:

24-34     (a) When an electronic acceptance is received; or

24-35     (b) If the response consists of beginning performance, full

24-36  performance, or giving access to information, when the

24-37  performance is received or the access is enabled and necessary

24-38  access materials are received.

24-39     Sec. 100.  1.  An acceptance materially alters an offer if it

24-40  contains a term that materially conflicts with or varies a term of

24-41  the offer or that adds a material term not contained in the offer.

24-42     2.  Except as otherwise provided in section 101 of this act, a

24-43  definite and seasonable expression of acceptance operates as an

24-44  acceptance, even if the acceptance contains terms that vary from

25-1  the terms of the offer, unless the acceptance materially alters the

25-2  offer.

25-3      3.  If an acceptance materially alters the offer, the following

25-4  rules apply:

25-5      (a) A contract is not formed unless:

25-6          (1) A party agrees, such as by manifesting assent, to the

25-7  other party’s offer or acceptance; or

25-8          (2) All the other circumstances, including the conduct of

25-9  the parties, establish a contract.

25-10     (b) If a contract is formed by the conduct of both parties, the

25-11  terms of the contract are determined under section 106 of this act.

25-12     4.  If an acceptance varies from but does not materially alter

25-13  the offer, a contract is formed based on the terms of the offer. In

25-14  addition, the following rules apply:

25-15     (a) Terms in the acceptance which conflict with terms in the

25-16  offer are not part of the contract.

25-17     (b) An additional nonmaterial term in the acceptance is a

25-18  proposal for an additional term. Between merchants, the proposed

25-19  additional term becomes part of the contract unless the offeror

25-20  gives notice of objection before, or within a reasonable time after,

25-21  it receives the proposed terms.

25-22     Sec. 101.  1.  An offer or acceptance is conditional if it is

25-23  conditioned on agreement by the other party to all the terms of the

25-24  offer or acceptance.

25-25     2.  Except as otherwise provided in subsection 3, a conditional

25-26  offer or acceptance precludes formation of a contract unless the

25-27  other party agrees to its terms, such as by manifesting assent.

25-28     3.  If the offer and acceptance are in standard forms and at

25-29  least one form is conditional, the following rules apply:

25-30     (a) Conditional language in a standard term precludes

25-31  formation of a contract based on the offer or acceptance if the

25-32  actions of the party proposing the form are consistent with the

25-33  conditional language, such as by refusing to perform, refusing to

25-34  permit performance, or refusing to accept the benefits of the

25-35  agreement, until its proposed terms are accepted.

25-36     (b) A party that agrees, such as by manifesting assent, to a

25-37  conditional offer that is effective under paragraph (a) adopts the

25-38  terms of the offer under section 104 or 105 of this act, except for a

25-39  term that conflicts with an expressly agreed term regarding price

25-40  or quantity.

25-41     Sec. 102.  1.  A contract may be formed by the interaction of

25-42  electronic agents. If the interaction results in the electronic

25-43  agents’ engaging in operations that under the circumstances

25-44  indicate acceptance of an offer, a contract is formed, but a court

26-1  may grant appropriate relief if the operations resulted from fraud,

26-2  electronic mistake, or the like.

26-3      2.  A contract may be formed by the interaction of an

26-4  electronic agent and an individual acting on the individual’s own

26-5  behalf or for another person. A contract is formed if the individual

26-6  takes an action or makes a statement that the individual can

26-7  refuse to take or say and that the individual has reason to know

26-8  will:

26-9      (a) Cause the electronic agent to perform, provide benefits, or

26-10  allow the use or access that is the subject of the contract, or send

26-11  instructions to do so; or

26-12     (b) Indicate acceptance, regardless of other expressions or

26-13  actions by the individual to which the individual has reason to

26-14  know the electronic agent cannot react.

26-15     3.  The terms of a contract formed under subsection 2 are

26-16  determined under section 104 or 105 of this act but do not include

26-17  a term provided by the individual if the individual had reason to

26-18  know that the electronic agent could not react to the term.

26-19     Sec. 103.  1.  A release is effective without consideration if it

26-20  is:

26-21     (a) In a record to which the releasing party agrees, such as by

26-22  manifesting assent, and which identifies the informational rights

26-23  released; or

26-24     (b) Enforceable under estoppel, implied license or other law.

26-25     2.  A release continues for the duration of the informational

26-26  rights released if the release does not specify its duration and does

26-27  not require affirmative performance after the grant of the release

26-28  by:

26-29     (a) The party granting the release; or

26-30     (b) The party receiving the release, except for relatively

26-31  insignificant acts.

26-32     Sec. 104.  1.  A party adopts the terms of a record, including

26-33  a standard form, as the terms of the contract if the party agrees to

26-34  the record, such as by manifesting assent.

26-35     2.  The terms of a record may be adopted after beginning

26-36  performance or use if the parties had reason to know that their

26-37  agreement would be represented in whole or part by a later record

26-38  to be agreed on and there would not be an opportunity to review

26-39  the record or a copy of it before performance or use begins. If the

26-40  parties fail to agree to the later terms and did not intend to form a

26-41  contract unless they so agreed, subsection 5 of section 98 of this

26-42  act applies.

26-43     3.  If a party adopts the terms of a record, the terms become

26-44  part of the contract without regard to the party’s knowledge or

26-45  understanding of individual terms in the record, except for a term

27-1  that is unenforceable because it fails to satisfy another

27-2  requirement of this chapter.

27-3      Sec. 105.  1.  Adoption of the terms of a mass-market license

27-4  under section 104 of this act is effective only if the party agrees to

27-5  the license, such as by manifesting assent, before or during the

27-6  party’s initial performance or use of or access to the information.

27-7  A term is not part of the license if:

27-8      (a) The term is unconscionable or is unenforceable under

27-9  subsection 1 or 2 of section 83 of this act;

27-10     (b) Subject to section 112 of this act, the term conflicts with a

27-11  term to which the parties to the license have expressly agreed;

27-12     (c) Under section 91 of this act, the licensee does not have an

27-13  opportunity to review the term before agreeing to it; or

27-14     (d) The term is not available to the licensee after assent to the

27-15  license in one or more of the following forms:

27-16         (1) An immediately available nonelectronic record that the

27-17  licensee may keep;

27-18         (2) An immediately available electronic record that can be

27-19  printed or stored by the licensee for archival and review purposes;

27-20  or

27-21         (3) In a copy available at no additional cost on a seasonable

27-22  request in a record by a licensee that was unable to print or store

27-23  the license for archival and review purposes.

27-24     2.  If a mass-market license or a copy of the license is not

27-25  available in a manner permitting an opportunity to review by the

27-26  licensee before the licensee becomes obligated to pay and

27-27  the licensee does not agree, such as by manifesting assent, to the

27-28  license after having an opportunity to review, the licensee is

27-29  entitled to a return under section 91 of this act and, in addition, to:

27-30     (a) Reimbursement of any reasonable expenses incurred in

27-31  complying with the licensor’s instructions for returning or

27-32  destroying the computer information or, in the absence of

27-33  instructions, expenses incurred for return postage or similar

27-34  reasonable expense in returning the computer information; and

27-35     (b) Compensation for any reasonable and foreseeable costs of

27-36  restoring the licensee’s information processing system to reverse

27-37  changes in the system caused by the installation, if:

27-38         (1) The installation occurs because information must be

27-39  installed to enable review of the license; and

27-40         (2) The installation alters the system or information in it

27-41  but does not restore the system or information after removal of the

27-42  installed information because the licensee rejected the license.

27-43     3.  In a mass-market transaction, if the licensor does not have

27-44  an opportunity to review a record containing proposed terms from

27-45  the licensee before the licensor delivers or becomes obligated to

28-1  deliver the information, and if the licensor does not agree, such as

28-2  by manifesting assent, to those terms after having that

28-3  opportunity, the licensor is entitled to a return.

28-4      4.  In a case governed by subsection 2, notice must be given in

28-5  the license or otherwise that a refund may be obtained from the

28-6  person to which the payment was made or other person designated

28-7  in the notice if the licensee refuses the terms.

28-8      Sec. 106.  1.  Except as otherwise provided in subsection 2

28-9  and subject to section 112 of this act, if a contract is formed by

28-10  conduct of the parties, the terms of the contract are determined by

28-11  consideration of the terms and conditions to which the parties

28-12  expressly agreed, course of performance, course of dealing, usage

28-13  of trade, the nature of the parties’ conduct, the records exchanged,

28-14  the information or informational rights involved and all other

28-15  relevant circumstances. If a court cannot determine the terms of

28-16  the contract from the foregoing factors, the supplementary

28-17  principles of this chapter apply.

28-18     2.  This section does not apply if the parties authenticate a

28-19  record of the contract or a party agrees, such as by manifesting

28-20  assent, to the record containing the terms of the other party.

28-21     Sec. 107.  1.  The efficacy, including the commercial

28-22  reasonableness, of an attribution procedure is determined by the

28-23  court.

28-24     2.  In making the determination under subsection 1, the

28-25  following rules apply:

28-26     (a) An attribution procedure established by law is effective for

28-27  transactions within the coverage of the statute or rule.

28-28     (b) Except as otherwise provided in paragraph (a), commercial

28-29  reasonableness and effectiveness is determined in light of the

28-30  purposes of the procedure and the commercial circumstances at

28-31  the time the parties agreed to or adopted the procedure.

28-32     (c) An attribution procedure may use any security device or

28-33  method that is commercially reasonable under the circumstances.

28-34     Sec. 108.  1.  An electronic authentication, display, message,

28-35  record or performance is attributed to a person if it was the act of

28-36  the person or its electronic agent, or if the person is bound by it

28-37  under agency or other law. The party relying on attribution of an

28-38  electronic authentication, display, message, record or performance

28-39  to another person has the burden of establishing attribution.

28-40     2.  The act of a person may be shown in any manner,

28-41  including a showing of the efficacy of an attribution procedure

28-42  that was agreed to or adopted by the parties or established by law.

28-43     3.  The effect of an electronic act attributed to a person under

28-44  subsection 1 is determined from the context at the time of its

29-1  creation, execution or adoption, including the parties’ agreement,

29-2  if any, or otherwise as provided by law.

29-3      4.  If an attribution procedure exists to detect errors or

29-4  changes in an electronic authentication, display, message, record

29-5  or performance, and was agreed to or adopted by the parties or

29-6  established by law, and one party conformed to the procedure but

29-7  the other party did not, and the nonconforming party would have

29-8  detected the change or error had that party also conformed, the

29-9  effect of noncompliance is determined by the agreement but, in the

29-10  absence of agreement, the conforming party may avoid the effect

29-11  of the error or change.

29-12     Sec. 109.  1.  As used in this section, “electronic error”

29-13  means an error in an electronic message created by a consumer

29-14  using an information processing system if a reasonable method to

29-15  detect and correct or avoid the error was not provided.

29-16     2.  In an automated transaction, a consumer is not bound by

29-17  an electronic message that the consumer did not intend and which

29-18  was caused by an electronic error, if the consumer:

29-19     (a) Promptly, on learning of the error:

29-20         (1) Notifies the other party of the error; and

29-21         (2) Causes delivery to the other party or, pursuant to

29-22  reasonable instructions received from the other party, delivers to

29-23  another person or destroys all copies of the information; and

29-24     (b) Has not used, or received any benefit or value from, the

29-25  information or caused the information or benefit to be made

29-26  available to a third party.

29-27     3.  If subsection 2 does not apply, the effect of an electronic

29-28  error is determined by other law.

29-29     Sec. 110.  1.  Receipt of an electronic message is effective

29-30  when received even if no individual is aware of its receipt.

29-31     2.  Receipt of an electronic acknowledgment of an electronic

29-32  message establishes that the message was received but by itself

29-33  does not establish that the content sent corresponds to the content

29-34  received.

29-35     Sec. 111.  1.  The following rules apply to a submission of

29-36  an idea or information for the creation, development or

29-37  enhancement of computer information which is not made

29-38  pursuant to an existing agreement requiring the submission:

29-39     (a) A contract is not formed and is not implied from the mere

29-40  receipt of an unsolicited submission.

29-41     (b) Engaging in a business, trade or industry that by custom or

29-42  practice regularly acquires ideas is not in itself an express or

29-43  implied solicitation of the information.

30-1      (c) If the recipient seasonably notifies the person making the

30-2  submission that the recipient maintains a procedure to receive and

30-3  review submissions, a contract is formed only if:

30-4          (1) The submission is made and a contract accepted

30-5  pursuant to that procedure; or

30-6          (2) The recipient expressly agrees to terms concerning the

30-7  submission.

30-8      2.  An agreement to disclose an idea creates a contract

30-9  enforceable against the receiving party only if the idea as disclosed

30-10  is confidential, concrete and novel to the business, trade or

30-11  industry or the party receiving the disclosure otherwise expressly

30-12  agreed.

30-13     Sec. 112.  Terms with respect to which confirmatory records

30-14  of the parties agree or which are otherwise set forth in a record

30-15  intended by the parties as a final expression of their agreement

30-16  with respect to terms included therein may not be contradicted by

30-17  evidence of any previous agreement or of a contemporaneous oral

30-18  agreement but may be explained or supplemented by:

30-19     1.  Course of performance, course of dealing or usage of

30-20  trade; and

30-21     2.  Evidence of consistent additional terms, unless the court

30-22  finds the record to have been intended as a complete and exclusive

30-23  statement of the terms of the agreement.

30-24     Sec. 113.  1.  The express terms of an agreement and any

30-25  course of performance, course of dealing or usage of trade must

30-26  be construed whenever reasonable as consistent with each other.

30-27  However, if that construction is unreasonable:

30-28     (a) Express terms prevail over course of performance, course

30-29  of dealing and usage of trade;

30-30     (b) Course of performance prevails over course of dealing and

30-31  usage of trade; and

30-32     (c) Course of dealing prevails over usage of trade.

30-33     2.  An applicable usage of trade in the place where any part of

30-34  performance is to occur must be used in interpreting the

30-35  agreement as to that part of the performance.

30-36     3.  Evidence of a relevant course of performance, course of

30-37  dealing or usage of trade offered by one party in a proceeding is

30-38  not admissible unless and until the party offering the evidence has

30-39  given the other party notice that the court finds sufficient to

30-40  prevent unfair surprise.

30-41     4.  The existence and scope of a usage of trade must be proved

30-42  as a question of fact.

30-43     Sec. 114.  1.  An agreement modifying a contract subject to

30-44  this chapter needs no consideration to be binding.

31-1      2.  An authenticated record that precludes modification or

31-2  rescission except by an authenticated record may not otherwise be

31-3  modified or rescinded. In a standard form supplied by a merchant

31-4  to a consumer, a term requiring an authenticated record for

31-5  modification of the contract is not enforceable unless the

31-6  consumer manifests assent to the term.

31-7      3.  A modification of a contract and the contract as modified

31-8  must satisfy the requirements of subsection 1 of section 97 and

31-9  subsection 6 of section 118 of this act if the contract as modified is

31-10  within those provisions.

31-11     4.  Subject to section 160 of this act, an attempt at

31-12  modification or rescission which does not satisfy subsection 2 or 3

31-13  may operate as a waiver.

31-14     Sec. 115.  1.  Terms of an agreement involving successive

31-15  performances apply to all performances, even if the terms are not

31-16  displayed or otherwise brought to the attention of a party with

31-17  respect to each successive performance, unless the terms are

31-18  modified in accordance with this chapter or the contract.

31-19     2.  If a contract provides that terms may be changed as to

31-20  future performances by compliance with a described procedure, a

31-21  change proposed in good faith pursuant to that procedure

31-22  becomes part of the contract if the procedure:

31-23     (a) Reasonably notifies the other party of the change; and

31-24     (b) In a mass-market transaction, permits the other party to

31-25  terminate the contract as to future performance if the change

31-26  alters a material term and the party in good faith determines that

31-27  the modification is unacceptable.

31-28     3.  The parties by agreement may determine the standards for

31-29  reasonable notice unless the agreed standards are manifestly

31-30  unreasonable in light of the commercial circumstances.

31-31     4.  The enforceability of changes made pursuant to a

31-32  procedure that does not comply with subsection 2 is determined by

31-33  the other provisions of this chapter or other law.

31-34     Sec. 116.  An agreement that is otherwise sufficiently definite

31-35  to be a contract is not invalid because it leaves particulars of

31-36  performance to be specified by one of the parties. If particulars of

31-37  performance are to be specified by a party, the following rules

31-38  apply:

31-39     1.  Specification must be made in good faith and within limits

31-40  set by commercial reasonableness.

31-41     2.  If a specification materially affects the other party’s

31-42  performance but is not seasonably made, the other party:

31-43     (a) Is excused for any resulting delay in its performance; and

31-44     (b) May perform, suspend performance, or treat the failure to

31-45  specify as a breach of contract.

32-1      Sec. 117.  A performance obligation of a party that cannot be

32-2  determined from the agreement or from other provisions of this

32-3  chapter requires the party to perform in a manner and in a time

32-4  that is reasonable in light of the commercial circumstances

32-5  existing at the time of agreement.

32-6      Sec. 118.  1.  A license grants:

32-7      (a) The contractual rights that are expressly described; and

32-8      (b) A contractual right to use any informational rights within

32-9  the licensor’s control at the time of contracting which are

32-10  necessary in the ordinary course to exercise the expressly

32-11  described rights.

32-12     2.  If a license expressly limits use of the information or

32-13  informational rights, use in any other manner is a breach of

32-14  contract. In all other cases, a license contains an implied

32-15  limitation that the licensee will not use the information or

32-16  informational rights otherwise than as described in subsection 1.

32-17  However, use inconsistent with this implied limitation is not a

32-18  breach if it is permitted under applicable law in the absence of the

32-19  implied limitation.

32-20     3.  A party is not entitled to any rights in new versions of, or

32-21  improvements or modifications to, information made by the other

32-22  party. A licensor’s agreement to provide new versions,

32-23  improvements or modifications requires that the licensor provide

32-24  them as developed and made generally commercially available

32-25  from time to time by the licensor.

32-26     4.  Neither party is entitled to receive copies of source code,

32-27  schematics, master copy, design material or other information

32-28  used by the other party in creating, developing or implementing

32-29  the information.

32-30     5.  Terms concerning scope must be construed under ordinary

32-31  principles of contract interpretation in light of the informational

32-32  rights and the commercial context. In addition, the following rules

32-33  apply:

32-34     (a) A grant of “all possible rights and for all media” or “all

32-35  rights and for all media now known or later developed,” or a grant

32-36  in similar terms, includes all rights then existing or later created

32-37  by law and all uses, media and methods of distribution or

32-38  exhibition, whether then existing or developed in the future and

32-39  whether or not anticipated at the time of the grant.

32-40     (b) A grant of an “exclusive license,” or a grant in similar

32-41  terms, means that:

32-42         (1) For the duration of the license, the licensor will not

32-43  exercise, and will not grant to any other person, rights in the same

32-44  information or informational rights within the scope of the

32-45  exclusive grant; and

33-1          (2) The licensor affirms that it has not previously granted

33-2  those rights in a contract in effect when the licensee’s rights may

33-3  be exercised.

33-4      6.  The rules in this section may be varied only by a record

33-5  that is sufficient to indicate that a contract has been made and

33-6  which is:

33-7      (a) Authenticated by the party against which enforcement is

33-8  sought; or

33-9      (b) Prepared and delivered by one party and adopted by the

33-10  other under section 104 or 105 of this act.

33-11     Sec. 119.  1.  Except as otherwise provided in subsection 2,

33-12  an agreement that provides that the performance of one party is to

33-13  be to the satisfaction or approval of the other party requires

33-14  performance sufficient to satisfy a reasonable person in the

33-15  position of the party that must be satisfied.

33-16     2.  Performance must be to the subjective satisfaction of the

33-17  other party if:

33-18     (a) The agreement expressly so provides, such as by stating

33-19  that approval is in the “sole discretion” of the party, or words of

33-20  similar import; or

33-21     (b) The agreement is for informational content to be evaluated

33-22  in reference to subjective characteristics such as aesthetics, appeal

33-23  or suitability to taste.

33-24     Sec. 120.  1.  A licensor of information that is a merchant

33-25  regularly dealing in information of the kind warrants that the

33-26  information will be delivered free of the rightful claim of any third

33-27  person by way of infringement or misappropriation, but a licensee

33-28  that furnishes detailed specifications to the licensor and the

33-29  method required for meeting the specifications holds the licensor

33-30  harmless against any such claim that arises out of compliance

33-31  with either the required specification or the required method

33-32  except for a claim that results from the failure of the licensor to

33-33  adopt, or notify the licensee of, a noninfringing alternative of

33-34  which the licensor had reason to know.

33-35     2.  A licensor warrants:

33-36     (a) For the duration of the license, that no person holds a

33-37  rightful claim to, or interest in, the information which arose from

33-38  an act or omission of the licensor, other than a claim by way of

33-39  infringement or misappropriation, which will interfere with the

33-40  licensee’s enjoyment of its interest; and

33-41     (b) As to rights granted exclusively to the licensee, that within

33-42  the scope of the license:

33-43         (1) To the knowledge of the licensor, any licensed patent

33-44  rights are valid and exclusive to the extent exclusivity and validity

34-1  are recognized by the law under which the patent rights were

34-2  created; and

34-3          (2) In all other cases, the licensed informational rights are

34-4  valid and exclusive for the information as a whole to the extent

34-5  exclusivity and validity are recognized by the law applicable to the

34-6  licensed rights in a jurisdiction to which the license applies.

34-7      3.  The warranties in this section are subject to the following

34-8  rules:

34-9      (a) If the licensed informational rights are subject to a right of

34-10  privileged use, collective administration or compulsory licensing,

34-11  the warranty is not made with respect to those rights.

34-12     (b) The obligations under subsection 1 and paragraph (b) of

34-13  subsection 2 apply solely to informational rights arising under the

34-14  laws of the United States or a state, unless the contract expressly

34-15  provides that the warranty obligations extend to rights under the

34-16  laws of other countries. Language is sufficient for this purpose if

34-17  it states, “The licensor warrants ‘exclusivity,’ ‘noninfringement,’

34-18  ‘in specified countries,’ ‘worldwide,’” or words of similar import.

34-19  In that case, the warranty extends to the specified country or, in

34-20  the case of a reference to “worldwide” or the like, to all countries

34-21  within the description, but only to the extent the rights are

34-22  recognized under a treaty or international convention to which the

34-23  country and the United States are signatories.

34-24     (c) The warranties under subsection 1 and paragraph (b) of

34-25  subsection 2 are not made by a license that merely permits use, or

34-26  covenants not to claim infringement because of the use, of rights

34-27  under a licensed patent.

34-28     4.  Except as otherwise provided in subsection 5, a warranty

34-29  under this section may be disclaimed or modified only by specific

34-30  language or by circumstances that give the licensee reason to

34-31  know that the licensor does not warrant that competing claims do

34-32  not exist or that the licensor purports to grant only the rights it

34-33  may have. An obligation to hold harmless under subsection 1 may

34-34  be disclaimed or modified only by specific language or by

34-35  circumstances giving the licensor reason to know that the licensee

34-36  does not provide a hold-harmless obligation to the licensor. In an

34-37  automated transaction, language is sufficient if it is conspicuous.

34-38  Otherwise, language in a record is sufficient if it states:

34-39     (a) As to a licensor’s obligation, “There is no warranty against

34-40  interference with your enjoyment of the information or against

34-41  infringement,” or words of similar import; or

34-42     (b) As to a licensee’s obligation, “There is no obligation to

34-43  hold you harmless from any actions taken in compliance with the

34-44  specifications or methods furnished by me under this contract,” or

34-45  words of similar import.

35-1      5.  Between merchants, a grant of a “quitclaim,” or a grant in

35-2  similar terms, grants the information or informational rights

35-3  without an implied warranty as to infringement or

35-4  misappropriation or as to the rights actually possessed or

35-5  transferred by the licensor.

35-6      Sec. 121.  1.  Except as otherwise provided in subsection 3,

35-7  an express warranty by a licensor is created as follows:

35-8      (a) An affirmation of fact or promise made by the licensor to

35-9  its licensee, including by advertising, which relates to the

35-10  information and becomes part of the basis of the bargain creates

35-11  an express warranty that the information to be furnished under

35-12  the agreement will conform to the affirmation or promise.

35-13     (b) Any description of the information which is made part of

35-14  the basis of the bargain creates an express warranty that the

35-15  information will conform to the description.

35-16     (c) Any sample, model, or demonstration of a final product

35-17  which is made part of the basis of the bargain creates an express

35-18  warranty that the performance of the information will conform to

35-19  the performance of the sample, model or demonstration, taking

35-20  into account differences that would appear to a reasonable person

35-21  in the position of the licensee between the sample, model, or

35-22  demonstration and the information as it will be used.

35-23     2.  It is not necessary to the creation of an express warranty

35-24  that the licensor use formal words, such as “warranty” or

35-25  “guaranty,” or state a specific intention to make a warranty.

35-26  However, an express warranty is not created by:

35-27     (a) An affirmation or prediction merely of the value of the

35-28  information or informational rights;

35-29     (b) A display or description of a portion of the information to

35-30  illustrate the aesthetics, appeal, suitability to taste, subjective

35-31  quality, or the like of informational content; or

35-32     (c) A statement purporting to be merely opinion or

35-33  commendation of the information or informational rights.

35-34     3.  An express warranty or similar express contractual

35-35  obligation, if any, exists with respect to published informational

35-36  content covered by the provisions of this chapter to the same

35-37  extent that it would exist if the published informational content

35-38  had been published in a form that placed it outside this chapter.

35-39  However, if the warranty or similar express contractual obligation

35-40  is breached, the remedies of the aggrieved party are those under

35-41  this chapter and the agreement.

35-42     Sec. 122.  1.  Unless the warranty is disclaimed or modified,

35-43  a licensor that is a merchant with respect to computer programs of

35-44  the kind warrants:

36-1      (a) To its end user licensee that the computer program is fit for

36-2  the ordinary purposes for which such computer programs are

36-3  used;

36-4      (b) To its distributor that:

36-5          (1) The program is adequately packaged and labeled as the

36-6  agreement requires; and

36-7          (2) In the case of multiple copies, the copies are within the

36-8  variations permitted by the agreement, of even kind, quality and

36-9  quantity within each unit and among all units involved; and

36-10     (c) To the parties described in paragraphs (a) and (b), that the

36-11  program conforms to any promises or affirmations of fact made

36-12  on the container or label.

36-13     2.  Unless disclaimed or modified, other implied warranties

36-14  with respect to computer programs may arise from course of

36-15  dealing or usage of trade.

36-16     3.  No warranty is created under this section with respect to

36-17  informational content, but an implied warranty may arise under

36-18  section 123 of this act.

36-19     Sec. 123.  1.  Unless the warranty is disclaimed or modified,

36-20  a merchant that, in a special relationship of reliance with a

36-21  licensee, collects, compiles, processes, provides or transmits

36-22  informational content warrants to that licensee that there is no

36-23  inaccuracy in the informational content caused by the merchant’s

36-24  failure to perform with reasonable care.

36-25     2.  There is no warranty under subsection 1 with respect to:

36-26     (a) Subjective characteristics of the informational content,

36-27  such as the aesthetics, appeal, and suitability to taste;

36-28     (b) Published informational content; or

36-29     (c) A person that acts as a conduit or provides no more than

36-30  editorial services in collecting, compiling, distributing, processing,

36-31  providing, or transmitting informational content that under the

36-32  circumstances can be identified as that of a third person.

36-33     3.  The warranty under this section is not subject to the

36-34  preclusion in paragraph (a) of subsection 2 of section 93 of this

36-35  act on disclaiming obligations of diligence, reasonableness or

36-36  care.

36-37     Sec. 124.  1.  Unless the warranty is disclaimed or modified,

36-38  if a licensor at the time of contracting has reason to know any

36-39  particular purpose for which the computer information is required

36-40  and that the licensee is relying on the licensor’s skill or judgment

36-41  to select, develop or furnish suitable information, the following

36-42  rules apply:

36-43     (a) Except as otherwise provided in paragraph (b), there is an

36-44  implied warranty that the information is fit for that purpose.

37-1      (b) If from all the circumstances it appears that the licensor

37-2  was to be paid for the amount of its time or effort regardless of the

37-3  fitness of the resulting information, the warranty under paragraph

37-4  (a) is that the information will not fail to achieve the licensee’s

37-5  particular purpose as a result of the licensor’s lack of reasonable

37-6  effort.

37-7      2.  There is no warranty under subsection 1 with regard to:

37-8      (a) The aesthetics, appeal, suitability to taste, or subjective

37-9  quality of informational content; or

37-10     (b) Published informational content, but there may be a

37-11  warranty with regard to the licensor’s selection among published

37-12  informational content from different providers if the selection is

37-13  made by an individual acting as or on behalf of the licensor.

37-14     3.  If an agreement requires a licensor to provide or select a

37-15  system consisting of computer programs and goods, and the

37-16  licensor has reason to know that the licensee is relying on the skill

37-17  or judgment of the licensor to select the components of the system,

37-18  there is an implied warranty that the components provided or

37-19  selected will function together as a system.

37-20     4.  The warranty under this section is not subject to the

37-21  preclusion in paragraph (a) of subsection 2 of section 93 of this

37-22  act on disclaiming diligence, reasonableness or care.

37-23     Sec. 125.  1.  Words or conduct relevant to the creation of an

37-24  express warranty and words or conduct tending to disclaim or

37-25  modify an express warranty must be construed wherever

37-26  reasonable as consistent with each other. Subject to section 112 of

37-27  this act with regard to parol or extrinsic evidence, the disclaimer

37-28  or modification is inoperative to the extent that such construction

37-29  is unreasonable.

37-30     2.  Except as otherwise provided in subsections 3, 4 and 5, to

37-31  disclaim or modify an implied warranty or any part of it, but not

37-32  the warranty in section 120 of this act, the following rules apply:

37-33     (a) Except as otherwise provided in this subsection:

37-34         (1) To disclaim or modify the implied warranty arising

37-35  under section 122 of this act, language must mention

37-36  “merchantability” or “quality” or use words of similar import and,

37-37  if in a record, must be conspicuous.

37-38         (2) To disclaim or modify the implied warranty arising

37-39  under section 123 of this act, language in a record must mention

37-40  “accuracy” or use words of similar import.

37-41     (b) Language to disclaim or modify the implied warranty

37-42  arising under section 124 of this act must be in a record and be

37-43  conspicuous. It is sufficient to state, “There is no warranty that

37-44  this information, our efforts, or the system will fulfill any of your

37-45  particular purposes or needs,” or words of similar import.

38-1      (c) Language in a record is sufficient to disclaim all implied

38-2  warranties if it individually disclaims each implied warranty or,

38-3  except for the warranty in section 120 of this act, if it is

38-4  conspicuous and states “Except for express warranties stated in

38-5  this contract, if any, this ‘information’ ‘computer program’ is

38-6  provided with all faults, and the entire risk as to satisfactory

38-7  quality, performance, accuracy, and effort is with the user,” or

38-8  words of similar import.

38-9      (d) A disclaimer or modification sufficient under NRS

38-10  104.2101 to 104.2725, inclusive, or 104A.2101 to 104A.2532,

38-11  inclusive, to disclaim or modify an implied warranty of

38-12  merchantability is sufficient to disclaim or modify the warranties

38-13  under sections 122 and 123 of this act. A disclaimer or

38-14  modification sufficient under NRS 104.2101 to 104.2725,

38-15  inclusive, or 104A.2101 to 104A.2532, inclusive, to disclaim or

38-16  modify an implied warranty of fitness for a particular purpose is

38-17  sufficient to disclaim or modify the warranties under section 124

38-18  of this act.

38-19     3.  Unless the circumstances indicate otherwise, all implied

38-20  warranties, but not the warranty under section 120 of this act, are

38-21  disclaimed by expressions like “as is” or “with all faults” or other

38-22  language that in common understanding calls the licensee’s

38-23  attention to the disclaimer of warranties and makes plain that

38-24  there are no implied warranties.

38-25     4.  If a licensee before entering into a contract has examined

38-26  the information or the sample or model as fully as it desired or has

38-27  refused to examine the information, there is no implied warranty

38-28  with regard to defects that an examination ought in the

38-29  circumstances to have revealed to the licensee.

38-30     5.  An implied warranty may also be disclaimed or modified by

38-31  course of performance, course of dealing or usage of trade.

38-32     6.  If a contract requires ongoing performance or a series of

38-33  performances by the licensor, language of disclaimer or

38-34  modification which complies with this section is effective with

38-35  respect to all performances under the contract.

38-36     7.  Remedies for breach of warranty may be limited in

38-37  accordance with the provisions of this chapter with respect to

38-38  liquidation or limitation of damages and contractual modification

38-39  of remedy.

38-40     Sec. 126.  A licensee that modifies a computer program, other

38-41  than by using a capability of the program intended for that

38-42  purpose in the ordinary course, does not invalidate any warranty

38-43  regarding performance of an unmodified copy but does invalidate

38-44  any warranties, express or implied, regarding performance of the

39-1  modified copy. A modification occurs if a licensee alters code in,

39-2  deletes code from, or adds code to the computer program.

39-3      Sec. 127.  Warranties, whether express or implied, must be

39-4  construed as consistent with each other and as cumulative, but if

39-5  that construction is unreasonable, the intention of the parties

39-6  determines which warranty is dominant. In ascertaining that

39-7  intention, the following rules apply:

39-8      1.  Exact or technical specifications displace an inconsistent

39-9  sample or model or general language of description.

39-10     2.  A sample displaces inconsistent general language of

39-11  description.

39-12     3.  Express warranties displace inconsistent implied

39-13  warranties other than an implied warranty under subsection 1 of

39-14  section 124 of this act.

39-15     Sec. 128.  1.  Except for published informational content, a

39-16  warranty to a licensee extends to persons for whose benefit the

39-17  licensor intends to supply the information or informational rights

39-18  and which rightfully use the information in a transaction or

39-19  application of a kind in which the licensor intends the information

39-20  to be used.

39-21     2.  A warranty to a consumer extends to each individual

39-22  consumer in the licensee’s immediate family or household if the

39-23  individual’s use would have been reasonably expected by the

39-24  licensor.

39-25     3.  A contractual term that excludes or limits the persons to

39-26  which a warranty extends is effective except as to individuals

39-27  described in subsection 2.

39-28     4.  A disclaimer or modification of a warranty or remedy

39-29  which is effective against the licensee is also effective against third

39-30  persons to which a warranty extends under this section.

39-31     Sec. 129.  1.  As used in this section, “free software” means

39-32  a computer program with respect to which the licensor does not

39-33  intend to make a profit from the distribution of the copy of the

39-34  program and does not act generally for commercial gain derived

39-35  from controlling use of the program or making, modifying, or

39-36  redistributing copies of the program.

39-37     2.  The warranties under sections 120 and 122 of this act do

39-38  not apply to free software.

39-39     Sec. 130.  1.  If an agreement provides for conveyance of

39-40  ownership of informational rights in a computer program,

39-41  ownership passes at the time and place specified by the agreement

39-42  but does not pass until the program is in existence and identified

39-43  to the contract. If the agreement does not specify a different time,

39-44  ownership passes when the program and the informational rights

39-45  are in existence and identified to the contract.

40-1      2.  Transfer of a copy does not transfer ownership of

40-2  informational rights.

40-3      Sec. 131.  1.  In a license:

40-4      (a) Title to a copy is determined by the license;

40-5      (b) A licensee’s right under the license to possession or control

40-6  of a copy is governed by the license and does not depend solely on

40-7  title to the copy; and

40-8      (c) If a licensor reserves title to a copy, the licensor retains title

40-9  to that copy and any copies made of it, unless the license grants

40-10  the licensee a right to make and sell copies to others, in which case

40-11  the reservation of title applies only to copies delivered to the

40-12  licensee by the licensor.

40-13     2.  If an agreement provides for transfer of title to a copy, title

40-14  passes:

40-15     (a) At the time and place specified in the agreement; or

40-16     (b) If the agreement does not specify a time and place:

40-17         (1) With respect to delivery of a copy on a tangible medium,

40-18  at the time and place the licensor completed its obligations with

40-19  respect to tender of the copy; or

40-20         (2) With respect to electronic delivery of a copy, if a first

40-21  sale occurs under federal copyright law, at the time and place at

40-22  which the licensor completed its obligations with respect to tender

40-23  of the copy.

40-24     3.  If the party to which title passes under the contract refuses

40-25  delivery of the copy or rejects the terms of the agreement, title

40-26  revests in the licensor.

40-27     Sec. 132.  The following rules apply to a transfer of a

40-28  contractual interest:

40-29     1.  A party’s contractual interest may be transferred unless the

40-30  transfer:

40-31     (a) Is prohibited by other law; or

40-32     (b) Except as otherwise provided in subsection 3, would

40-33  materially change the duty of the other party, materially increase

40-34  the burden or risk imposed on the other party, or materially impair

40-35  the other party’s property or its likelihood or expectation of

40-36  obtaining return performance.

40-37     2.  Except as otherwise provided in subsection 3 and

40-38  subparagraph (2) of paragraph (a) of subsection 1 of section 137

40-39  of this act, a term prohibiting transfer of a party’s contractual

40-40  interest is enforceable, and a transfer made in violation of that

40-41  term is a breach of contract and is ineffective to create contractual

40-42  rights in the transferee against the nontransferring party, except

40-43  to the extent that:

40-44     (a) The contract is a license for incorporation or use of the

40-45  licensed information or informational rights with information or

41-1  informational rights from other sources in a combined work for

41-2  public distribution or public performance and the transfer is of the

41-3  completed, combined work;

41-4      (b) The transfer is of a right to payment arising out of the

41-5  transferor’s due performance of less than its entire obligation and

41-6  the transfer would be enforceable under subsection 1 in the

41-7  absence of the term prohibiting transfer; or

41-8      (c) The term is in a mass-market license and the transfer

41-9  complies with 17 U.S.C. § 117, is made with the computer

41-10  containing the authorized copy, and is a gift or donation:

41-11         (1) To a public elementary or secondary school;

41-12         (2) To a public library; or

41-13         (3) From a consumer to another consumer.

41-14     3.  A right to damages for breach of the whole contract or a

41-15  right to payment arising out of the transferor’s due performance

41-16  of its entire obligation may be transferred notwithstanding an

41-17  agreement otherwise.

41-18     4.  A term that prohibits transfer of a contractual interest

41-19  under a mass-market license by the licensee must be conspicuous.

41-20     Sec. 133.  1.  A transfer of “the contract” or of “all my

41-21  rights under the contract,” or a transfer in similar general terms,

41-22  is a transfer of all contractual interests under the contract.

41-23  Whether the transfer is effective is determined by section 132 of

41-24  this act and subparagraph (2) of paragraph (a) of subsection 1 of

41-25  section 137 of this act.

41-26     2.  The following rules apply to a transfer of a party’s

41-27  contractual interests:

41-28     (a) The transferee is subject to all contractual use terms.

41-29     (b) Unless the language or circumstances otherwise indicate,

41-30  as in a transfer as security under NRS 104.9101 to 104.9709,

41-31  inclusive, the transfer delegates the duties of the transferor and

41-32  transfers its rights.

41-33     (c) Acceptance of the transfer is a promise by the transferee to

41-34  perform the delegated duties. The promise is enforceable by the

41-35  transferor and any other party to the original contract.

41-36     (d) The transfer does not relieve the transferor of any duty to

41-37  perform, or of liability for breach of contract, unless the other

41-38  party to the original contract agrees that the transfer has that

41-39  effect.

41-40     3.  A party to the original contract, other than the transferor,

41-41  may treat a transfer that conveys a right or duty of performance

41-42  without its consent as creating reasonable grounds for insecurity

41-43  and, without prejudice to the party’s rights against the transferor,

41-44  may demand assurances from the transferee under section 166 of

41-45  this act.

42-1      Sec. 134.  1.  A party may perform its contractual duties or

42-2  exercise its contractual rights through a delegate or a subcontract

42-3  unless:

42-4      (a) The contract prohibits delegation or subcontracting; or

42-5      (b) The other party has a substantial interest in having the

42-6  original promisor perform or control the performance.

42-7      2.  Delegating or subcontracting performance does not relieve

42-8  the delegating party of a duty to perform or of liability for breach.

42-9      3.  An attempted delegation that violates a term prohibiting

42-10  delegation is not effective.

42-11     Sec. 135.  1.  If all or any part of a licensee’s interest in a

42-12  license is transferred, voluntarily or involuntarily, the transferee

42-13  does not acquire an interest in information, copies, or the

42-14  contractual or informational rights of the licensee unless the

42-15  transfer is effective under section 132 of this act or subparagraph

42-16  (2) of paragraph (a) of subsection 1 of section 137 of this act. If

42-17  the transfer is effective, the transferee takes subject to the terms of

42-18  the license.

42-19     2.  Except as otherwise provided under trade secret law, a

42-20  transferee acquires no more than the contractual interest or other

42-21  rights that the transferor was authorized to transfer.

42-22     Sec. 136.  If a financier does not become a licensee in

42-23  connection with its financial accommodation contract, the

42-24  following rules apply:

42-25     1.  The financier does not receive the benefits or burdens of

42-26  the license.

42-27     2.  The licensee’s rights and obligations with respect to the

42-28  information and informational rights are governed by:

42-29     (a) The license;

42-30     (b) Any rights of the licensor under other law; and

42-31     (c) To the extent not inconsistent with paragraphs (a) and (b),

42-32  any financial accommodation contract between the financier and

42-33  the licensee, which may add additional conditions to the licensee’s

42-34  right to use the licensed information or informational rights.

42-35     Sec. 137.  1.  If a financier becomes a licensee in connection

42-36  with its financial accommodation contract and then transfers its

42-37  contractual interest under the license, or sublicenses the licensed

42-38  computer information or informational rights, to a licensee

42-39  receiving the financial accommodation, the following rules apply:

42-40     (a) The transfer or sublicense to the accommodated licensee is

42-41  not effective unless:

42-42         (1) The transfer or sublicense is effective under section 132

42-43  of this act; or

42-44         (2) The following conditions are fulfilled:

43-1              (I) Before the licensor delivered the information or

43-2  granted the license to the financier, the licensor received notice in

43-3  a record from the financier giving the name and location of the

43-4  accommodated licensee and clearly indicating that the license was

43-5  being obtained in order to transfer the contractual interest or

43-6  sublicense the licensed information or informational rights to the

43-7  accommodated licensee;

43-8              (II) The financier became a licensee solely to make the

43-9  financial accommodation; and

43-10             (III) The accommodated licensee adopts the terms of the

43-11  license, which terms may be supplemented by the financial

43-12  accommodation contract, to the extent the terms of the financial

43-13  accommodation contract are not inconsistent with the license and

43-14  any rights of the licensor under other law.

43-15     (b) A financier that makes a transfer that is effective under

43-16  subparagraph (2) of paragraph (a) may make only the single

43-17  transfer or sublicense contemplated by the notice unless the

43-18  licensor consents to a later transfer.

43-19     2.  If a financier makes an effective transfer of its contractual

43-20  interest in a license, or an effective sublicense of the licensed

43-21  information or informational rights, to an accommodated licensee,

43-22  the following rules apply:

43-23     (a) The accommodated licensee’s rights and obligations are

43-24  governed by:

43-25         (1) The license;

43-26         (2) Any rights of the licensor under other law; and

43-27         (3) To the extent not inconsistent with subparagraphs (1)

43-28  and (2), the financial accommodation contract, which may impose

43-29  additional conditions to the licensee’s right to use the licensed

43-30  information or informational rights.

43-31     (b) The financier does not make warranties to the

43-32  accommodated licensee other than the warranty under paragraph

43-33  (a) of subsection 2 of section 120 of this act and any express

43-34  warranties in the financial accommodation contract.

43-35     Sec. 138.  Unless the accommodated licensee is a consumer, a

43-36  term in a financial accommodation contract providing that the

43-37  accommodated licensee’s obligations to the financier are

43-38  irrevocable and independent is enforceable. The obligations

43-39  become irrevocable and independent upon the licensee’s

43-40  acceptance of the license or the financier’s giving of value,

43-41  whichever occurs first.

43-42     Sec. 139.  1.  Except as otherwise provided in subsection 2,

43-43  on material breach of a financial accommodation contract by the

43-44  accommodated licensee, the following rules apply:

44-1      (a) The financier may cancel the financial accommodation

44-2  contract.

44-3      (b) Subject to paragraphs (c) and (d), the financier may pursue

44-4  its remedies against the accommodated licensee under the

44-5  financial accommodation contract.

44-6      (c) If the financier became a licensee and made a transfer or

44-7  sublicense that was effective under section 137 of this act, it may

44-8  exercise the remedies of a licensor for breach, including the rights

44-9  of an aggrieved party under section 183 of this act, subject to the

44-10  limitations of section 184 of this act.

44-11     (d) If the financier did not become a licensee or did not make a

44-12  transfer that was effective under section 137 of this act, it may

44-13  enforce a contractual right contained in the financial

44-14  accommodation contract to preclude the licensee’s further use of

44-15  the information. However, the following rules apply:

44-16         (1) The financier has no right to take possession of copies,

44-17  use the information or informational rights, or transfer any

44-18  contractual interest in the license.

44-19         (2) If the accommodated licensee agreed to transfer

44-20  possession of copies to the financier in the event of material

44-21  breach of the financial accommodation contract, the financier

44-22  may enforce that contractual right only if permitted to do so under

44-23  paragraph (a) of subsection 2 and section 132 of this act.

44-24     2.  The following additional limitations apply to a financier’s

44-25  remedies under subsection 1:

44-26     (a) A financier described in paragraph (c) of subsection 1

44-27  which is entitled under the financial accommodation contract to

44-28  take possession or prevent use of information, copies, or related

44-29  materials may do so only if the licensor consents or if doing so

44-30  would not result in a material adverse change of the duty of the

44-31  licensor, materially increase the burden or risk imposed on the

44-32  licensor, disclose or threaten to disclose trade secrets or

44-33  confidential material of the licensor, or materially impair the

44-34  licensor’s likelihood or expectation of obtaining return

44-35  performance.

44-36     (b) The financier may not otherwise exercise control over,

44-37  have access to, or sell, transfer, or otherwise use the information

44-38  or copies without the consent of the licensor unless the financier

44-39  or transferee is subject to the terms of the license and:

44-40         (1) The licensee owns the licensed copy, the license does

44-41  not preclude transfer of the licensee’s contractual rights, and the

44-42  transfer complies with federal copyright law for the owner of a

44-43  copy to make the transfer; or

45-1          (2) The license is transferable by its express terms and the

45-2  financier fulfills any conditions to, or complies with any

45-3  restrictions on, transfer.

45-4      (c) The financier’s remedies under the financial

45-5  accommodation contract are subject to the licensor’s rights and

45-6  the terms of the license.

45-7      Sec. 140.  1.  The creation of a financier’s interest does not

45-8  place any obligations on or alter the rights of a licensor.

45-9      2.  A financier’s interest does not attach to any intellectual

45-10  property rights of the licensor unless the licensor expressly

45-11  consents to such attachment in a license or another record.

45-12     Sec. 141.  1.  A party shall perform in a manner that

45-13  conforms to the contract.

45-14     2.  If an uncured material breach of contract by one party

45-15  precedes the aggrieved party’s performance, the aggrieved party

45-16  need not perform except with respect to restrictions in contractual

45-17  use terms. In addition, the following rules apply:

45-18     (a) The aggrieved party may refuse a performance that is a

45-19  material breach as to that performance or a performance that may

45-20  be refused under subsection 2 of section 162 of this act.

45-21     (b) The aggrieved party may cancel the contract only if the

45-22  requirements of section 170 of this act are satisfied.

45-23     (c) The contractual use terms do not apply to information or

45-24  copies properly received or obtained from another source not

45-25  covered by the agreement.

45-26     3.  Except as otherwise provided in subsection 2, tender of

45-27  performance by a party entitles the party to acceptance of that

45-28  performance. In addition, the following rules apply:

45-29     (a) A tender of performance occurs when the party, with

45-30  manifest present ability and willingness to perform, offers to

45-31  complete the performance.

45-32     (b) If a performance by the other party is due at the time of the

45-33  tendered performance, tender of the other party’s performance is a

45-34  condition to the tendering party’s obligation to complete the

45-35  tendered performance.

45-36     (c) A party shall pay or render the consideration required by

45-37  the agreement for a performance it accepts. A party that accepts a

45-38  performance has the burden of establishing a breach of contract

45-39  with respect to the accepted performance.

45-40     4.  Except as otherwise provided in sections 143 and 144 of

45-41  this act, in the case of a performance with respect to a copy, this

45-42  section is subject to sections 146 to 150, inclusive, and 162 to 165,

45-43  inclusive, of this act.

45-44     Sec. 142.  1.  As used in this section, “enable use” means to

45-45  grant a contractual right or permission with respect to information

46-1  or informational rights and to complete the acts, if any, required

46-2  under the agreement to make the information available to the

46-3  licensee.

46-4      2.  A licensor shall enable use by the licensee pursuant to the

46-5  contract. The following rules apply to enabling use:

46-6      (a) If nothing other than the grant of a contractual right or

46-7  permission is required to enable use, the licensor enables use

46-8  when the contract becomes enforceable.

46-9      (b) If the agreement requires delivery of a copy, enabling use

46-10  occurs when the copy is tendered to the licensee.

46-11     (c) If the agreement requires delivery of a copy and steps

46-12  authorizing the licensee’s use, enabling use occurs when the last

46-13  of those acts occurs.

46-14     (d) In an access contract, enabling use requires tendering all

46-15  access material necessary to enable the agreed access.

46-16     (e) If the agreement requires a transfer of ownership of

46-17  informational rights and a filing or recording is allowed by law to

46-18  establish priority of the transferred ownership, on request by the

46-19  licensee, the licensor shall execute and tender a record

46-20  appropriate for that purpose.

46-21     Sec. 143.  If an agreement requires that submitted

46-22  information be to the satisfaction of the recipient, the following

46-23  rules apply:

46-24     1.  Sections 146 to 150, inclusive, and 162 to 165, inclusive, of

46-25  this act do not apply to the submission.

46-26     2.  If the information is not satisfactory to the recipient and

46-27  the parties engage in efforts to correct the deficiencies in a

46-28  manner and over a time consistent with the ordinary standards of

46-29  the business, trade or industry, neither the efforts nor the passage

46-30  of time required for the efforts is an acceptance or a refusal of the

46-31  submission.

46-32     3.  Except as otherwise provided in subsection 4, neither

46-33  refusal nor acceptance occurs unless the recipient expressly

46-34  refuses or accepts the submitted information, but the recipient may

46-35  not use the submitted information before acceptance.

46-36     4.  Silence and a failure to act in reference to a submission

46-37  beyond a commercially reasonable time to respond entitle the

46-38  submitting party to demand, in a record delivered to the recipient,

46-39  a decision on the submission. If the recipient fails to respond

46-40  within a reasonable time after receipt of the demand, the

46-41  submission is deemed to have been refused.

46-42     Sec. 144.  If a performance involves delivery of information

46-43  or services which, because of their nature, may provide a licensee,

46-44  immediately on performance or delivery, with substantially all the

47-1  benefit of the performance or with other significant benefit that

47-2  cannot be returned, the following rules apply:

47-3      1.  Sections 147 to 150, inclusive, and 162 to 165, inclusive, of

47-4  this act do not apply.

47-5      2.  The rights of the parties are determined under the other

47-6  provisions of this chapter, including section 141 of this act, and

47-7  the ordinary standards of the business, trade or industry.

47-8      3.  Before tender of the performance, a party entitled to

47-9  receive the tender may inspect the media, labels or packaging but

47-10  may not view the information or otherwise receive the

47-11  performance before completing any performance of its own that is

47-12  then due.

47-13     Sec. 145.  1.  As used in this section, “automatic restraint”

47-14  means a program, code, device, or similar electronic or physical

47-15  limitation the intended purpose of which is to prevent use of

47-16  information contrary to the contract or applicable law.

47-17     2.  A party entitled to enforce a limitation on use of

47-18  information may include an automatic restraint in the information

47-19  or a copy of it and use that restraint if:

47-20     (a) A term of the agreement authorizes use of the restraint;

47-21     (b) The restraint prevents a use that is inconsistent with the

47-22  agreement;

47-23     (c) The restraint prevents use after expiration of the stated

47-24  duration of the contract or a stated number of uses; or

47-25     (d) The restraint prevents use after the contract terminates,

47-26  other than on expiration of a stated duration or number of uses,

47-27  and the licensor gives reasonable notice to the licensee before

47-28  further use is prevented.

47-29     3.  This section does not authorize an automatic restraint that

47-30  affirmatively prevents or makes impracticable a licensee’s access

47-31  to its own information or information of a third party, other than

47-32  the licensor, if that information is in the possession of the licensee

47-33  or a third party and accessed without use of the licensor’s

47-34  information or informational rights.

47-35     4.  A party that includes or uses an automatic restraint in

47-36  accordance with subsection 2 or 3 is not liable for any loss caused

47-37  by the use of the restraint to prevent use of information contrary to

47-38  the contract or applicable law. This subsection does not alter the

47-39  effect or enforceability of contractual terms such as warranties or

47-40  of other laws.

47-41     5.  This section does not preclude electronic replacement or

47-42  disabling of an earlier copy of information by the licensor in

47-43  connection with delivery of a new copy or version under an

47-44  agreement to replace or disable the earlier copy by electronic

47-45  means with an upgrade or other new information.

48-1      6.  This section does not authorize use of an automatic

48-2  restraint to enforce remedies because of breach of contract or for

48-3  cancellation for breach. If a right to cancel for breach of contract

48-4  and a right to exercise a restraint under paragraph (d) of

48-5  subsection 2 exist simultaneously, any affirmative acts constituting

48-6  self-help may only be taken subject to the limitations in subsection

48-7  2 of section 183 of this act and section 184 of this act instead of

48-8  this section. Affirmative acts under this subsection do not include:

48-9      (a) Use of a program, code, device or similar electronic or

48-10  physical limitation that operates automatically without regard to

48-11  breach; or

48-12     (b) A refusal to prevent the operation of a restraint authorized

48-13  by this section or to reverse its effect.

48-14     Sec. 146.  1.  Delivery of a copy must be at the location

48-15  designated by agreement. In the absence of a designation, the

48-16  following rules apply:

48-17     (a) The place for delivery of a copy on a tangible medium is

48-18  the tendering party’s place of business or, if it has none, its

48-19  residence. However, if the parties know at the time of contracting

48-20  that the copy is located in some other place, that place is the place

48-21  for delivery.

48-22     (b) The place for electronic delivery of a copy is an

48-23  information processing system designated or used by the licensor.

48-24     (c) Documents of title may be delivered through customary

48-25  banking channels.

48-26     2.  Tender of delivery of a copy requires the tendering party to

48-27  put and hold a conforming copy at the other party’s disposition

48-28  and give the other party any notice reasonably necessary to enable

48-29  it to obtain access to, control or possession of the copy. Tender

48-30  must be at a reasonable hour and, if applicable, requires tender of

48-31  access material and other documents required by the agreement.

48-32  The party receiving tender shall furnish facilities reasonably

48-33  suited to receive tender. In addition, the following rules apply:

48-34     (a) If the contract requires delivery of a copy held by a third

48-35  person without being moved, the tendering party shall tender

48-36  access material or documents required by the agreement.

48-37     (b) If the tendering party is required or authorized to send a

48-38  copy to the other party and the contract does not require the

48-39  tendering party to deliver the copy at a particular destination, the

48-40  following rules apply:

48-41         (1) In tendering delivery of a copy on a tangible medium,

48-42  the tendering party shall put the copy in the possession of a carrier

48-43  and make a contract for its transportation that is reasonable in

48-44  light of the nature of the information and other circumstances,

48-45  with expenses of transportation to be borne by the receiving party.

49-1          (2) In tendering electronic delivery of a copy, the tendering

49-2  party shall initiate or cause to have initiated a transmission that is

49-3  reasonable in light of the nature of the information and other

49-4  circumstances, with expenses of transmission to be borne by the

49-5  receiving party.

49-6      (c) If the tendering party is required to deliver a copy at a

49-7  particular destination, the tendering party shall make a copy

49-8  available at that destination and bear the expenses of

49-9  transportation or transmission.

49-10     Sec. 147.  1.  If performance requires delivery of a copy, the

49-11  following rules apply:

49-12     (a) The party required to deliver need not complete a tendered

49-13  delivery until the receiving party tenders any performance then

49-14  due.

49-15     (b) Tender of delivery is a condition of the other party’s duty to

49-16  accept the copy and entitles the tendering party to acceptance of

49-17  the copy.

49-18     2.  If payment is due on delivery of a copy, the following rules

49-19  apply:

49-20     (a) Tender of delivery is a condition of the receiving party’s

49-21  duty to pay and entitles the tendering party to payment according

49-22  to the contract.

49-23     (b) All copies required by the contract must be tendered in a

49-24  single delivery, and payment is due only on tender.

49-25     3.  If the circumstances give either party the right to make or

49-26  demand delivery in lots, the contract fee, if it can be apportioned,

49-27  may be demanded for each lot.

49-28     4.  If payment is due and demanded on delivery of a copy or

49-29  on delivery of a document of title, the right of the party receiving

49-30  tender to retain or dispose of the copy or document, as against the

49-31  tendering party, is conditioned on making the payment due.

49-32     Sec. 148.  1.  Except as otherwise provided in sections 143

49-33  and 144 of this act, if performance requires delivery of a copy, the

49-34  following rules apply:

49-35     (a) Except as otherwise provided in this section, the party

49-36  receiving the copy has a right before payment or acceptance to

49-37  inspect the copy at a reasonable place and time and in a

49-38  reasonable manner to determine conformance to the contract.

49-39     (b) The party making the inspection shall bear the expenses of

49-40  inspection.

49-41     (c) A place or method of inspection or an acceptance standard

49-42  fixed by the parties is presumed to be exclusive. However, the

49-43  fixing of a place, method or standard does not postpone

49-44  identification to the contract or shift the place for delivery,

49-45  passage of title or risk of loss. If compliance with the place or

50-1  method becomes impossible, inspection must be made as provided

50-2  in this section unless the place or method fixed by the parties was

50-3  an indispensable condition the failure of which avoids the

50-4  contract.

50-5      (d) A party’s right to inspect is subject to existing obligations

50-6  of confidentiality.

50-7      2.  If a right to inspect exists under subsection 1 but the

50-8  agreement is inconsistent with an opportunity to inspect before

50-9  payment, the party does not have a right to inspect before

50-10  payment.

50-11     3.  If a contract requires payment before inspection of a copy,

50-12  nonconformity in the tender does not excuse the party receiving

50-13  the tender from making payment unless:

50-14     (a) The nonconformity appears without inspection and would

50-15  justify refusal under section 162 of this act; or

50-16     (b) Despite tender of the required documents, the

50-17  circumstances would justify an injunction against honor of a letter

50-18  of credit under NRS 104.5101 to 104.5118, inclusive.

50-19     4.  Payment made under circumstances described in

50-20  subsection 2 or 3 is not an acceptance of the copy and does not

50-21  impair a party’s right to inspect or preclude any of the party’s

50-22  remedies.

50-23     Sec. 149.  1.  Acceptance of a copy occurs when the party to

50-24  which the copy is tendered:

50-25     (a) Signifies, or acts with respect to the copy in a manner that

50-26  signifies, that the tender was conforming or that the party will take

50-27  or retain the copy despite the nonconformity;

50-28     (b) Does not make an effective refusal;

50-29     (c) Commingles the copy or the information in a manner that

50-30  makes compliance with the party’s duties after refusal impossible;

50-31     (d) Obtains a substantial benefit from the copy and cannot

50-32  return that benefit; or

50-33     (e) Acts in a manner inconsistent with the licensor’s

50-34  ownership, but the act is an acceptance only if the licensor elects

50-35  to treat it as an acceptance and ratifies the act to the extent it was

50-36  within contractual use terms.

50-37     2.  Except in cases governed by paragraph (c) or (d) of

50-38  subsection 1, if there is a right to inspect under section 148 of this

50-39  act or the agreement, acceptance of a copy occurs only after the

50-40  party has had a reasonable opportunity to inspect the copy.

50-41     3.  If an agreement requires delivery in stages involving

50-42  separate portions that taken together comprise the whole of the

50-43  information, acceptance of any stage is conditional until

50-44  acceptance of the whole.

51-1      Sec. 150.  1.  A party accepting a copy shall pay or render

51-2  the consideration required by the agreement for the copy it

51-3  accepts. Acceptance of a copy precludes refusal and, if made with

51-4  knowledge of a nonconformity in a tender, may not be revoked

51-5  because of the nonconformity unless acceptance was on the

51-6  reasonable assumption that the nonconformity would be

51-7  seasonably cured. Acceptance by itself does not impair any other

51-8  remedy for nonconformity.

51-9      2.  A party accepting a copy has the burden of establishing a

51-10  breach of contract with respect to the copy.

51-11     3.  If a copy has been accepted and a breach of contract or a

51-12  breach of warranty is claimed, the following rules apply:

51-13     (a) If the claim is of a type other than a claim alleging a

51-14  breach of a warranty of noninfringement or breach of an express

51-15  warranty about misappropriation or for libel, slander, or the like,

51-16  the accepting party shall notify the other party of the breach

51-17  within a reasonable time after it discovers or should have

51-18  discovered a breach of contract or be precluded from any remedy

51-19  for the breach.

51-20     (b) If the claim is for breach of warranty of noninfringement

51-21  or breach of an express warranty about misappropriation or for

51-22  libel, slander, or the like and the accepting party is sued by a third

51-23  party for such claim, the accepting party shall notify the other

51-24  party within a reasonable time after receiving notice of the

51-25  litigation or be precluded from any remedy over for the liability

51-26  established by the litigation.

51-27     Sec. 151.  1.  If an access contract provides for access over a

51-28  period of time, the following rules apply:

51-29     (a) The licensee’s rights of access are to the information as

51-30  modified and made commercially available by the licensor from

51-31  time to time during that period.

51-32     (b) A change in the content of the information is a breach of

51-33  contract only if the change conflicts with an express term of the

51-34  agreement.

51-35     (c) Unless it is subject to a contractual use term, information

51-36  obtained by the licensee is free of any use restriction other than a

51-37  restriction resulting from the informational rights of another

51-38  person or other law.

51-39     (d) Access must be available:

51-40         (1) At times and in a manner conforming to the express

51-41  terms of the agreement; and

51-42         (2) To the extent not expressly stated in the agreement, at

51-43  times and in a manner reasonable for the particular type of

51-44  contract in light of the ordinary standards of the business, trade or

51-45  industry.

52-1      2.  In an access contract that gives the licensee a right of

52-2  access at times substantially of its own choosing during agreed

52-3  periods, an occasional failure to have access available during

52-4  those times is not a breach of contract if it is:

52-5      (a) Consistent with ordinary standards of the business, trade or

52-6  industry for the particular type of contract; or

52-7      (b) Caused by:

52-8          (1) Scheduled downtime;

52-9          (2) Reasonable needs for maintenance;

52-10         (3) Reasonable periods of failure of equipment, computer

52-11  programs, or communications; or

52-12         (4) Events reasonably beyond the licensor’s control, and

52-13  the licensor exercises such commercially reasonable efforts as the

52-14  circumstances require.

52-15     Sec. 152.  1.  If a person agrees to provide services

52-16  regarding the correction of performance problems in computer

52-17  information, other than an agreement to cure its own existing

52-18  breach of contract, the following rules apply:

52-19     (a) If the services are provided by a licensor of the information

52-20  as part of a limited remedy, the licensor undertakes that its

52-21  performance will provide the licensee with information that

52-22  conforms to the agreement to which the limited remedy applies.

52-23     (b) In all other cases, the person:

52-24         (1) Shall perform at a time and place and in a manner

52-25  consistent with the express terms of the agreement and, to the

52-26  extent not stated in the express terms, at a time and place and in a

52-27  manner that is reasonable in light of ordinary standards of the

52-28  business, trade or industry; and

52-29         (2) Does not undertake that its services will correct

52-30  performance problems unless the agreement expressly so provides.

52-31     2.  Unless required to do so by an express or implied warranty,

52-32  a licensor is not required to provide instruction or other support

52-33  for the licensee’s use of information or access. A person that

52-34  agrees to provide support shall make the support available in a

52-35  manner and with a quality consistent with express terms of the

52-36  support agreement and, to the extent not stated in the express

52-37  terms, at a time and place and in a manner that is reasonable in

52-38  light of ordinary standards of the business, trade or industry.

52-39     Sec. 153.  1.  As used in this section:

52-40     (a) “Dealer” means a merchant licensee that receives

52-41  information directly or indirectly from a licensor for sale or

52-42  license to end users.

52-43     (b) “End user” means a licensee that acquires a copy of the

52-44  information from a dealer by delivery on a tangible medium for

53-1  the licensee’s own use and not for sale, license, transmission to

53-2  third persons, or public display or performance for a fee.

53-3      (c) “Publisher” means a licensor, other than a dealer, that

53-4  offers a license to an end user with respect to information

53-5  distributed by a dealer to the end user.

53-6      2.  In a contract between a dealer and an end user, if the end

53-7  user’s right to use the information or informational rights is

53-8  subject to a license by the publisher and there was no opportunity

53-9  to review the license before the end user became obligated to pay

53-10  the dealer, the following rules apply:

53-11     (a) The contract between the end user and the dealer is

53-12  conditioned on the end user’s agreement to the publisher’s license.

53-13     (b) Unless the end user agrees, such as by manifesting assent,

53-14  to the terms of the publisher’s license, the end user has a right to a

53-15  return from the dealer. A right under this paragraph is a return

53-16  for the purposes of sections 90, 104 and 105 of this act.

53-17     (c) The dealer is not bound by the terms, and does not receive

53-18  the benefits, of an agreement between the publisher and the end

53-19  user unless the dealer and end user adopt those terms as part of

53-20  the agreement.

53-21     3.  If an agreement provides for distribution of copies on a

53-22  tangible medium or in packaging provided by the publisher or an

53-23  authorized third party, a dealer may distribute those copies and

53-24  documentation only:

53-25     (a) In the form as received; and

53-26     (b) Subject to the terms of any license that the publisher

53-27  provides to the dealer to be furnished to end users.

53-28     4.  A dealer that enters into an agreement with an end user is

53-29  a licensor with respect to the end user under this chapter.

53-30     Sec. 154.  1.  Except as otherwise provided in this section,

53-31  the risk of loss as to a copy that is to be delivered to a licensee,

53-32  including a copy delivered by electronic means, passes to the

53-33  licensee upon its receipt of the copy.

53-34     2.  If an agreement requires or authorizes a licensor to send a

53-35  copy on a tangible medium by carrier, the following rules apply:

53-36     (a) If the agreement does not require the licensor to deliver the

53-37  copy at a particular destination, the risk of loss passes to the

53-38  licensee when the copy is duly delivered to the carrier, even if

53-39  the shipment is under reservation.

53-40     (b) If the agreement requires the licensor to deliver the copy at

53-41  a particular destination and the copy is duly tendered there in the

53-42  possession of the carrier, the risk of loss passes to the licensee

53-43  when the copy is tendered at that destination.

54-1      (c) If a tender of delivery of a copy or a shipping document

54-2  fails to conform to the contract, the risk of loss remains with the

54-3  licensor until cure or acceptance.

54-4      3.  If a copy is held by a third party to be delivered or

54-5  reproduced without being moved or a copy is to be delivered by

54-6  making access available to a third party resource containing a

54-7  copy, the risk of loss passes to the licensee upon:

54-8      (a) The licensee’s receipt of a negotiable document of title or

54-9  other access materials covering the copy;

54-10     (b) Acknowledgment by the third party to the licensee of the

54-11  licensee’s right to possession of or access to the copy; or

54-12     (c) The licensee’s receipt of a record directing the third party,

54-13  pursuant to an agreement between the licensor and the third party,

54-14  to make delivery or authorizing the third party to allow access.

54-15     Sec. 155.  1.  Unless a party has assumed a different

54-16  obligation, delay in performance by a party, or nonperformance in

54-17  whole or part by a party, other than of an obligation to make

54-18  payments or to conform to contractual use terms, is not a breach

54-19  of contract if the delay or nonperformance is of a performance

54-20  that has been made impracticable by:

54-21     (a) The occurrence of a contingency the nonoccurrence of

54-22  which was a basic assumption on which the contract was made; or

54-23     (b) Compliance in good faith with any foreign or domestic

54-24  statute, governmental rule, regulation, or order, whether or not it

54-25  later proves to be invalid.

54-26     2.  A party claiming excuse under subsection 1 shall

54-27  seasonably notify the other party that there will be delay or

54-28  nonperformance.

54-29     3.  If an excuse affects only a part of a party’s capacity to

54-30  perform an obligation for delivery of copies, the party claiming

54-31  excuse shall allocate performance among its customers in any

54-32  manner that is fair and reasonable and notify the other party of

54-33  the estimated quota to be made available. In making the

54-34  allocation, the party claiming excuse may include the

54-35  requirements of regular customers not then under contract and its

54-36  own requirements.

54-37     4.  A party that receives notice pursuant to subsection 2 of a

54-38  material or indefinite delay in delivery of copies or of an

54-39  allocation under subsection 3, by notice in a record, may:

54-40     (a) Terminate and thereby discharge any executory portion of

54-41  the contract; or

54-42     (b) Modify the contract by agreeing to take the available

54-43  allocation in substitution.

55-1      5.  If, after receipt of notice under subsection 2, a party does

55-2  not modify the contract within a reasonable time not exceeding 30

55-3  days, the contract lapses with respect to any performance affected.

55-4      Sec. 156.  1.  Except as otherwise provided in subsection 2,

55-5  on termination all obligations that are still executory on both sides

55-6  are discharged.

55-7      2.  The following survive termination:

55-8      (a) A right based on previous breach or performance of the

55-9  contract;

55-10     (b) An obligation of confidentiality, nondisclosure or

55-11  noncompetition to the extent enforceable under other law;

55-12     (c) A contractual use term applicable to any licensed copy or

55-13  information received from the other party, or copies made of it,

55-14  which are not returned or returnable to the other party;

55-15     (d) An obligation to deliver, or dispose of information,

55-16  materials, documentation, copies, records, or the like to the other

55-17  party, an obligation to destroy copies, or a right to obtain

55-18  information from an escrow agent;

55-19     (e) A choice of law or forum;

55-20     (f) An obligation to arbitrate or otherwise resolve disputes by

55-21  alternative dispute resolution procedures;

55-22     (g) A term limiting the time for commencing an action or for

55-23  giving notice;

55-24     (h) An indemnity term or a right related to a claim of a type

55-25  described in paragraph (a) of subsection 4 of section 173 of this

55-26  act;

55-27     (i) A limitation of remedy or modification or disclaimer of

55-28  warranty;

55-29     (j) An obligation to provide an accounting and make any

55-30  payment due under the accounting; and

55-31     (k) Any term that the agreement provides will survive.

55-32     Sec. 157.  1.  Except as otherwise provided in subsection 2, a

55-33  party may not terminate a contract except on the happening of an

55-34  agreed event, such as the expiration of the stated duration, unless

55-35  the party gives reasonable notice of termination to the other party.

55-36     2.  An access contract may be terminated without giving

55-37  notice. However, except on the happening of an agreed event,

55-38  termination requires giving reasonable notice to the licensee if the

55-39  access contract pertains to information owned and provided by the

55-40  licensee to the licensor.

55-41     3.  A term dispensing with a notice required under this section

55-42  is invalid if its operation would be unconscionable. However, a

55-43  term specifying standards for giving notice is enforceable if the

55-44  standards are not manifestly unreasonable.

56-1      Sec. 158.  1.  On termination of a license, a party in

56-2  possession or control of information, copies, or other materials

56-3  that are the property of the other party, or are subject to a

56-4  contractual obligation to be delivered to that party on termination,

56-5  shall use commercially reasonable efforts to deliver or hold them

56-6  for disposal on instructions of that party. If any materials are

56-7  jointly owned, the party in possession or control shall make them

56-8  available to the joint owners.

56-9      2.  Termination of a license ends all right under the license

56-10  for the licensee to use or access the licensed information,

56-11  informational rights, or copies. Continued use of the licensed

56-12  copies or exercise of terminated rights is a breach of contract

56-13  unless authorized by a term that survives termination.

56-14     3.  Each party may enforce its rights under subsections 1 and

56-15  2 by acting pursuant to section 145 of this act or by judicial

56-16  process, including obtaining an order that the party or an officer

56-17  of the court take the following actions with respect to any licensed

56-18  information, documentation, copies or other materials to be

56-19  delivered:

56-20     (a) Deliver or take possession of them;

56-21     (b) Without removal, render unusable or eliminate the

56-22  capability to exercise contractual rights in or use of them;

56-23     (c) Destroy or prevent access to them; and

56-24     (d) Require that the party or any other person in possession or

56-25  control of them make them available to the other party at a place

56-26  designated by that party which is reasonably convenient to both

56-27  parties.

56-28     4.  In an appropriate case, a court of competent jurisdiction

56-29  may grant injunctive relief to enforce the parties’ rights under this

56-30  section.

56-31     Sec. 159.  1.  Whether a party is in breach of contract is

56-32  determined by the agreement and the provisions of this chapter. A

56-33  breach occurs if a party without legal excuse fails to perform an

56-34  obligation in a timely manner, repudiates a contract, or exceeds a

56-35  contractual use term, or otherwise is not in compliance with an

56-36  obligation placed on it by the provisions of this chapter or the

56-37  agreement.

56-38     2.  A breach of contract, whether or not material, entitles the

56-39  aggrieved party to its remedies. Whether a breach of a contractual

56-40  use term is an infringement or a misappropriation is determined

56-41  by applicable informational property rights law.

56-42     3.  A breach of contract is material if:

56-43     (a) The contract so provides;

56-44     (b) The breach is a substantial failure to perform a term that is

56-45  an essential element of the agreement; or

57-1      (c) The circumstances, including the language of the

57-2  agreement, the reasonable expectations of the parties, the

57-3  standards and practices of the business, trade or industry, and

57-4  the character of the breach, indicate that:

57-5          (1) The breach caused or is likely to cause substantial harm

57-6  to the aggrieved party; or

57-7          (2) The breach substantially deprived or is likely

57-8  substantially to deprive the aggrieved party of a significant benefit

57-9  it reasonably expected under the contract.

57-10     4.  The cumulative effect of nonmaterial breaches may be

57-11  material.

57-12     Sec. 160.  1.  Except for a waiver in accordance with

57-13  subsection 2 or a waiver supported by consideration, a waiver

57-14  affecting an executory portion of a contract may be retracted by

57-15  seasonable notice received by the other party that strict

57-16  performance will be required in the future, unless the retraction

57-17  would be unjust in view of a material change of position in

57-18  reliance on the waiver by that party.

57-19     2.  A claim or right arising out of a breach of contract may be

57-20  discharged in whole or part without consideration by a waiver in a

57-21  record to which the party making the waiver agrees after breach,

57-22  such as by manifesting assent, or which the party making the

57-23  waiver authenticates and delivers to the other party after breach.

57-24     3.  A party that accepts a performance with knowledge that

57-25  the performance constitutes a breach of contract and, within a

57-26  reasonable time after acceptance, does not notify the other party of

57-27  the breach waives all remedies for the breach, unless acceptance

57-28  was made on the reasonable assumption that the breach would be

57-29  cured and it has not been seasonably cured. However, a party that

57-30  seasonably notifies the other party of a reservation of rights does

57-31  not waive the rights reserved.

57-32     4.  A party that refuses a performance and fails to identify a

57-33  particular defect that is ascertainable by reasonable inspection

57-34  waives the right to rely on that defect to justify refusal only if:

57-35     (a) The other party could have cured the defect if it were stated

57-36  seasonably; or

57-37     (b) Between merchants, the other party after refusal made a

57-38  request in a record for a full and final statement of all defects on

57-39  which the refusing party relied.

57-40     5.  Waiver of a remedy for breach of contract in one

57-41  performance does not waive any remedy for the same or a similar

57-42  breach in future performances unless the party making the waiver

57-43  expressly so states.

57-44     6.  A waiver may not be retracted as to the performance to

57-45  which the waiver applies.

58-1      Sec. 161.  1.  A party in breach of contract may cure the

58-2  breach at its own expense if:

58-3      (a) The time for performance has not expired and the party in

58-4  breach seasonably notifies the aggrieved party of its intent to cure

58-5  and, within the time for performance, makes a conforming

58-6  performance;

58-7      (b) The party in breach had reasonable grounds to believe the

58-8  performance would be acceptable with or without monetary

58-9  allowance, seasonably notifies the aggrieved party of its intent to

58-10  cure, and provides a conforming performance within a further

58-11  reasonable time after performance was due; or

58-12     (c) In a case not governed by paragraph (a) or (b), the party in

58-13  breach seasonably notifies the aggrieved party of its intent to cure

58-14  and promptly provides a conforming performance before

58-15  cancellation by the aggrieved party.

58-16     2.  In a license other than in a mass-market transaction, if the

58-17  agreement required a single delivery of a copy and the party

58-18  receiving tender of delivery was required to accept a

58-19  nonconforming copy because the nonconformity was not a

58-20  material breach of contract, the party in breach shall promptly

58-21  and in good faith make an effort to cure if:

58-22     (a) The party in breach receives seasonable notice of the

58-23  specific nonconformity and a demand for cure of it; and

58-24     (b) The cost of the effort to cure does not disproportionately

58-25  exceed the direct damages caused by the nonconformity to the

58-26  aggrieved party.

58-27     3.  A party may not cancel a contract or refuse a performance

58-28  because of a breach of contract that has been seasonably cured

58-29  under subsection 1. However, notice of intent to cure does not

58-30  preclude refusal or cancellation for the uncured breach.

58-31     Sec. 162.  1.  Subject to subsection 2 and section 163 of this

58-32  act, tender of a copy that is a material breach of contract permits

58-33  the party to which tender is made to:

58-34     (a) Refuse the tender;

58-35     (b) Accept the tender; or

58-36     (c) Accept any commercially reasonable units and refuse the

58-37  rest.

58-38     2.  In a mass-market transaction that calls for only a single

58-39  tender of a copy, a licensee may refuse the tender if the tender

58-40  does not conform to the contract.

58-41     3.  Refusal of a tender is ineffective unless:

58-42     (a) It is made before acceptance;

58-43     (b) It is made within a reasonable time after tender or

58-44  completion of any permitted effort to cure; and

59-1      (c) The refusing party seasonably notifies the tendering party

59-2  of the refusal.

59-3      4.  Except in a case governed by subsection 2, a party that

59-4  rightfully refuses tender of a copy may cancel the contract only if

59-5  the tender was a material breach of the whole contract or the

59-6  agreement so provides.

59-7      Sec. 163.  If an agreement grants a right in or permission to

59-8  use informational rights which precedes or is otherwise

59-9  independent of the delivery of a copy, the following rules apply:

59-10     1.  A party may refuse a tender of a copy which is a material

59-11  breach as to that copy, but refusal of that tender does not cancel

59-12  the contract.

59-13     2.  In a case governed by subsection 1, the tendering party

59-14  may cure the breach by seasonably providing a conforming copy

59-15  before the breach becomes material as to the whole contract.

59-16     3.  A breach that is material with respect to a copy allows

59-17  cancellation of the contract only if the breach cannot be

59-18  seasonably cured and is a material breach of the whole contract.

59-19     Sec. 164.  1.  Except as otherwise provided in this section,

59-20  after rightful refusal or revocation of acceptance of a copy, the

59-21  following rules apply:

59-22     (a) If the refusing party rightfully cancels the contract, section

59-23  170 of this act applies and all restrictions in contractual use terms

59-24  continue.

59-25     (b) If the contract is not cancelled, the parties remain bound

59-26  by all contractual obligations.

59-27     2.  On rightful refusal or revocation of acceptance of a copy,

59-28  the following rules apply to the extent consistent with section 170

59-29  of this act:

59-30     (a) Any use, sale, display, performance or transfer of the copy

59-31  or information it contains, or any failure to comply with a

59-32  contractual use term, is a breach of contract. The licensee shall

59-33  pay the licensor the reasonable value of any use. However, use for

59-34  a limited time within contractual use terms is not a breach, and is

59-35  not an acceptance under paragraph (e) of subsection 1 of section

59-36  149 of this act, if it:

59-37         (1) Occurs after the tendering party is seasonably notified

59-38  of refusal;

59-39         (2) Is not for distribution and is solely part of measures

59-40  reasonable under the circumstances to avoid or reduce loss; and

59-41         (3) Is not contrary to instructions concerning disposition of

59-42  the copy received from the party in breach.

59-43     (b) A party that refuses a copy shall:

59-44         (1) Deliver the copy and all copies made of it, all access

59-45  materials, and documentation pertaining to the refused

60-1  information to the tendering party or hold them with reasonable

60-2  care for a reasonable time for disposal at that party’s instructions;

60-3  and

60-4          (2) Follow reasonable instructions of the tendering party

60-5  for returning or delivering copies, access material, and

60-6  documentation, but instructions are not reasonable if the

60-7  tendering party does not arrange for payment of or reimbursement

60-8  for reasonable expenses of complying with the instructions.

60-9      (c) If the tendering party does not give instructions within a

60-10  reasonable time after being notified of refusal, the refusing party,

60-11  in a reasonable manner to reduce or avoid loss, may store the

60-12  copies, access material, and documentation for the tendering

60-13  party’s account or ship them to the tendering party and is entitled

60-14  to reimbursement for reasonable costs of storage and shipment.

60-15     (d) Both parties remain bound by all contractual use terms

60-16  that would have been enforceable had the performance not been

60-17  refused.

60-18     (e) In complying with this section, the refusing party shall act

60-19  in good faith. Conduct in good faith under this section is not

60-20  acceptance or conversion and may not be a ground for an action

60-21  for damages under the contract.

60-22     Sec. 165.  1.  A party that accepts a nonconforming tender

60-23  of a copy may revoke acceptance only if the nonconformity is a

60-24  material breach of contract and the party accepted it:

60-25     (a) On the reasonable assumption that the nonconformity

60-26  would be cured, and the nonconformity was not seasonably cured;

60-27     (b) During a continuing effort by the party in breach at

60-28  adjustment and cure, and the breach was not seasonably cured; or

60-29     (c) Without discovery of the nonconformity, if acceptance was

60-30  reasonably induced either by the other party’s assurances or by

60-31  the difficulty of discovery before acceptance.

60-32     2.  Revocation of acceptance is not effective until the revoking

60-33  party notifies the other party of the revocation.

60-34     3.  Revocation of acceptance of a copy is precluded if:

60-35     (a) It does not occur within a reasonable time after the party

60-36  attempting to revoke discovers or should have discovered the

60-37  ground for it;

60-38     (b) It occurs after a substantial change in condition not caused

60-39  by defects in the information, such as after the party commingles

60-40  the information in a manner that makes its return impossible; or

60-41     (c) The party attempting to revoke received a substantial

60-42  benefit or value from the information, and the benefit or value

60-43  cannot be returned.

61-1      4.  A party that rightfully revokes has the same duties and is

61-2  under the same restrictions as if the party had refused tender of

61-3  the copy.

61-4      Sec. 166.  1.  A contract imposes an obligation on each party

61-5  not to impair the other’s expectation of receiving due

61-6  performance. If reasonable grounds for insecurity arise with

61-7  respect to the performance of either party, the aggrieved party

61-8  may:

61-9      (a) Demand in a record adequate assurance of due

61-10  performance; and

61-11     (b) Until that assurance is received, if commercially

61-12  reasonable, suspend any performance, other than with respect to

61-13  restrictions in contractual use terms, for which the agreed return

61-14  performance has not been received.

61-15     2.  Between merchants, the reasonableness of grounds for

61-16  insecurity and the adequacy of any assurance offered is

61-17  determined according to commercial standards.

61-18     3.  Acceptance of any improper delivery or payment does not

61-19  impair an aggrieved party’s right to demand adequate assurance

61-20  of future performance.

61-21     4.  After receipt of a justified demand under subsection 1,

61-22  failure, within a reasonable time not exceeding 30 days, to provide

61-23  assurance of due performance which is adequate under the

61-24  circumstances of the particular case is a repudiation of the

61-25  contract under section 167 of this act.

61-26     Sec. 167.  1.  If a party to a contract repudiates a

61-27  performance not yet due and the loss of performance will

61-28  substantially impair the value of the contract to the other party,

61-29  the aggrieved party may:

61-30     (a) Await performance by the repudiating party for a

61-31  commercially reasonable time or resort to any remedy for breach

61-32  of contract, even if it has urged the repudiating party to retract the

61-33  repudiation or has notified the repudiating party that it would

61-34  await its performance; and

61-35     (b) In either case, suspend its own performance or proceed in

61-36  accordance with section 180 or 181 of this act, as applicable.

61-37     2.  Repudiation includes language that one party will not or

61-38  cannot make a performance still due under the contract or

61-39  voluntary, affirmative conduct that reasonably appears to the

61-40  other party to make a future performance impossible.

61-41     Sec. 168.  1.  A repudiating party may retract its repudiation

61-42  until its next performance is due unless the aggrieved party, after

61-43  the repudiation, has cancelled the contract, materially changed its

61-44  position, or otherwise indicated that it considers the repudiation

61-45  final.

62-1      2.  A retraction may be by any method that clearly indicates to

62-2  the aggrieved party that the repudiating party intends to perform

62-3  the contract. However, a retraction must contain any assurance

62-4  justifiably demanded under section 166 of this act.

62-5      3.  Retraction restores a repudiating party’s rights under the

62-6  contract with due excuse and allowance to the aggrieved party for

62-7  any delay caused by the repudiation.

62-8      Sec. 169.  1.  The remedies provided in this chapter are

62-9  cumulative, but a party may not recover more than once for the

62-10  same loss.

62-11     2.  Except as otherwise provided in sections 171 and 172 of

62-12  this act, if a party is in breach of contract, whether or not the

62-13  breach is material, the aggrieved party has the remedies provided

62-14  in the agreement or this chapter, but the aggrieved party shall

62-15  continue to comply with any restrictions in contractual use terms

62-16  with respect to information or copies received from the other party

62-17  and the contractual use terms do not apply to information or

62-18  copies properly received or obtained from another source.

62-19     3.  Rescission or a claim for rescission of the contract, or

62-20  refusal of the information, does not preclude and is not

62-21  inconsistent with a claim for damages or other remedy.

62-22     Sec. 170.  1.  An aggrieved party may cancel a contract for

62-23  breach if the breach is a material breach of the whole contract

62-24  which has not been cured or waived or the agreement allows

62-25  cancellation for the breach.

62-26     2.  Cancellation is not effective until the cancelling party gives

62-27  notice of cancellation to the party in breach, unless a delay

62-28  required to notify the party would cause or threaten material harm

62-29  or loss to the aggrieved party. The notification may be in any form

62-30  reasonable under the circumstances. However, in an access

62-31  contract, a party may cancel rights of access without notice.

62-32     3.  On cancellation, the following rules apply:

62-33     (a) If a party is in possession or control of licensed

62-34  information, documentation, materials or copies of licensed

62-35  information, the following rules apply:

62-36         (1) A party that has rightfully refused a copy shall comply

62-37  with subsection 2 of section 164 of this act as to the refused copy.

62-38         (2) A party in breach of contract which would be subject to

62-39  an obligation to deliver under section 158 of this act, shall deliver

62-40  all information, documentation, materials and copies to the other

62-41  party or hold them with reasonable care for a reasonable time for

62-42  disposal at that party’s instructions. The party in breach of

62-43  contract shall follow any reasonable instructions received from the

62-44  other party.

63-1          (3) Except as otherwise provided in subparagraphs (1) and

63-2  (2), the party shall comply with section 158 of this act.

63-3      (b) All obligations that are executory on both sides at the time

63-4  of cancellation are discharged, but the following survive:

63-5          (1) Any right based on previous breach or performance;

63-6  and

63-7          (2) The rights, duties and remedies described in subsection

63-8  2 of section 156 of this act.

63-9      (c) Cancellation of a license by the licensor ends any

63-10  contractual right of the licensee to use the information,

63-11  informational rights, copies or other materials.

63-12     (d) Cancellation of a license by the licensee ends any

63-13  contractual right to use the information, informational rights,

63-14  copies or other materials, but the licensee may use the information

63-15  for a limited time after the license has been cancelled if the use:

63-16         (1) Is within contractual use terms;

63-17         (2) Is not for distribution and is solely part of measures

63-18  reasonable under the circumstances to avoid or reduce loss; and

63-19         (3) Is not contrary to instructions received from the party in

63-20  breach concerning disposition of them.

63-21     (e) The licensee shall pay the licensor the reasonable value of

63-22  any use after cancellation permitted under paragraph (d).

63-23     (f) The obligations under this subsection apply to all

63-24  information, informational rights, documentation, materials and

63-25  copies received by the party and any copies made therefrom.

63-26     4.  A term providing that a contract may not be cancelled

63-27  precludes cancellation but does not limit other remedies.

63-28     5.  Unless a contrary intention clearly appears, an expression

63-29  such as “cancellation,” “rescission,” or the like may not be

63-30  construed as a renunciation or discharge of a claim in damages

63-31  for an antecedent breach.

63-32     Sec. 171.  1.  Except as otherwise provided in this section

63-33  and in section 172 of this act:

63-34     (a) An agreement may provide for remedies in addition to or in

63-35  substitution for those provided in this chapter and may limit or

63-36  alter the measure of damages recoverable under this chapter or a

63-37  party’s other remedies under this chapter, such as by precluding a

63-38  party’s right to cancel for breach of contract, limiting remedies to

63-39  returning or delivering copies and repayment of the contract fee,

63-40  or limiting remedies to repair or replacement of the

63-41  nonconforming copies; and

63-42     (b) Resort to a contractual remedy is optional unless the

63-43  remedy is expressly agreed to be exclusive, in which case it is the

63-44  sole remedy.

64-1      2.  Subject to subsection 3, if performance of an exclusive or

64-2  limited remedy causes the remedy to fail of its essential purpose,

64-3  the aggrieved party may pursue other remedies under this chapter.

64-4      3.  Failure or unconscionability of an agreed exclusive or

64-5  limited remedy makes a term disclaiming or limiting consequential

64-6  or incidental damages unenforceable unless the agreement

64-7  expressly makes the disclaimer or limitation independent of the

64-8  agreed remedy.

64-9      4.  Consequential damages and incidental damages may be

64-10  excluded or limited by agreement unless the exclusion or

64-11  limitation is unconscionable. Exclusion or limitation of

64-12  consequential damages for personal injury in a consumer contract

64-13  for a computer program that is subject to the provisions of this

64-14  chapter and is contained in consumer goods is prima facie

64-15  unconscionable, but exclusion or limitation of damages for a

64-16  commercial loss is not unconscionable.

64-17     Sec. 172.  1.  Damages for breach of contract by either party

64-18  may be liquidated by agreement in an amount that is reasonable in

64-19  light of:

64-20     (a) The loss anticipated at the time of contracting;

64-21     (b) The actual loss; or

64-22     (c) The actual or anticipated difficulties of proving loss in the

64-23  event of breach.

64-24     2.  If a term liquidating damages is unenforceable under this

64-25  subsection, the aggrieved party may pursue the remedies provided

64-26  in this chapter, except as limited by other terms of the contract.

64-27     3.  If a party justifiably withholds delivery of copies because of

64-28  the other party’s breach of contract, the party in breach is entitled

64-29  to restitution for any amount by which the sum of the payments it

64-30  made for the copies exceeds the amount of the liquidated damages

64-31  payable to the aggrieved party in accordance with subsection 1.

64-32  The right to restitution is subject to offset to the extent that the

64-33  aggrieved party establishes:

64-34     (a) A right to recover damages other than under subsection 1;

64-35  and

64-36     (b) The amount or value of any benefits received by the party

64-37  in breach, directly or indirectly, by reason of the contract.

64-38     4.  A term that does not liquidate damages, but that limits

64-39  damages available to the aggrieved party, must be evaluated under

64-40  section 171 of this act.

64-41     Sec. 173.  1.  Except as otherwise provided in subsection 2,

64-42  an action for breach of contract must be commenced within the

64-43  later of 4 years after the right of action accrues or 1 year after the

64-44  breach was or should have been discovered, but not later than 5

64-45  years after the right of action accrues.

65-1      2.  If the original agreement of the parties alters the period of

65-2  limitations, the following rules apply:

65-3      (a) The parties may reduce the period of limitation to not less

65-4  than 1 year after the right of action accrues but may not extend it.

65-5      (b) In a consumer contract, the period of limitation may not be

65-6  reduced.

65-7      3.  Except as otherwise provided in subsection 4, a right of

65-8  action accrues when the act or omission constituting a breach of

65-9  contract occurs, even if the aggrieved party did not know of the

65-10  breach. A right of action for breach of warranty accrues when

65-11  tender of delivery of a copy pursuant to section 146 of this act, or

65-12  access to the information, occurs. However, if the warranty

65-13  expressly extends to future performance of the information or a

65-14  copy, the right of action accrues when the performance fails to

65-15  conform to the warranty, but not later than the date the warranty

65-16  expires.

65-17     4.  In the following cases, a right of action accrues on the

65-18  later of the date the act or omission constituting the breach of

65-19  contract occurred or the date on which it was or should have been

65-20  discovered by the aggrieved party, but not earlier than the date for

65-21  delivery of a copy if the claim relates to information in the copy:

65-22     (a) A breach of warranty against third-party claims for:

65-23         (1) Infringement or misappropriation; or

65-24         (2) Libel, slander, or the like;

65-25     (b) A breach of contract involving a party’s disclosure or

65-26  misuse of confidential information; or

65-27     (c) A failure to provide an indemnity or to perform another

65-28  obligation to protect or defend against a third-party claim.

65-29     5.  If an action commenced within the period of limitation is

65-30  so concluded as to leave available a remedy by another action for

65-31  the same breach of contract, the other action may be commenced

65-32  after expiration of the period of limitation if the action is

65-33  commenced within six months after conclusion of the first action,

65-34  unless the action was concluded as a result of voluntary

65-35  discontinuance or dismissal for failure or neglect to prosecute.

65-36     6.  This section does not alter the law on tolling of the statute

65-37  of limitations and does not apply to a right of action that accrued

65-38  before October 1, 2003.

65-39     Sec. 174.  Remedies for material misrepresentation or fraud

65-40  include all remedies available under this chapter for

65-41  nonfraudulent breach of contract.

65-42     Sec. 175.  1.  Except as otherwise provided in the contract,

65-43  an aggrieved party may not recover compensation for that part of

65-44  a loss which could have been avoided by taking measures

65-45  reasonable under the circumstances to avoid or reduce loss. The

66-1  burden of establishing a failure of the aggrieved party to take

66-2  measures reasonable under the circumstances is on the party in

66-3  breach of contract.

66-4      2.  A party may not recover:

66-5      (a) Consequential damages for losses resulting from the

66-6  content of published informational content unless the agreement

66-7  expressly so provides; or

66-8      (b) Damages that are speculative.

66-9      3.  The remedy for breach of contract for disclosure or misuse

66-10  of information that is a trade secret or in which the aggrieved

66-11  party has a right of confidentiality includes as consequential

66-12  damages compensation for the benefit obtained as a result of the

66-13  breach.

66-14     4.  For purposes of this chapter, market value is determined as

66-15  of the date of breach of contract and the place for performance.

66-16     5.  Damages or expenses that relate to events after the date of

66-17  entry of judgment must be reduced to their present value as of that

66-18  date. In this subsection, “present value” means the amount, as of

66-19  a date certain, of one or more sums payable in the future or the

66-20  value of one or more performances due in the future, discounted

66-21  to the date certain. The discount is determined by the interest rate

66-22  specified by the parties in their agreement unless that rate was

66-23  manifestly unreasonable when the agreement was entered into.

66-24  Otherwise, the discount is determined by a commercially

66-25  reasonable rate that takes into account the circumstances of each

66-26  case when the agreement was entered into.

66-27     Sec. 176.  1.  As used in this section, “substitute

66-28  transaction” means a transaction by the licensor which would not

66-29  have been possible except for the licensee’s breach and which

66-30  transaction is for the same information or informational rights

66-31  with the same contractual use terms as the transaction to which

66-32  the licensee’s breach applies.

66-33     2.  Except as otherwise provided in section 175 of this act, a

66-34  breach of contract by a licensee entitles the licensor to recover the

66-35  following compensation for losses resulting in the ordinary course

66-36  from the breach, less expenses avoided as a result of the breach, to

66-37  the extent not otherwise accounted for under this subsection:

66-38     (a) Damages measured in any combination of the following

66-39  ways but not to exceed the contract fee and the market value of

66-40  other consideration required under the contract for the

66-41  performance that was the subject of the breach:

66-42         (1) The amount of accrued and unpaid contract fees and

66-43  the market value of other consideration earned but not received

66-44  for:

66-45             (I) Any performance accepted by the licensee; and

67-1              (II) Any performance to which section 144 of this act

67-2  applies;

67-3          (2) For performances not governed by subparagraph (1), if

67-4  the licensee repudiated or wrongfully refused the performance or

67-5  the licensor rightfully cancelled and the breach makes possible a

67-6  substitute transaction, the amount of loss as determined by

67-7  contract fees and the market value of other consideration required

67-8  under the contract for the performance less:

67-9              (I) The contract fees and market value of other

67-10  consideration received from an actual and commercially

67-11  reasonable substitute transaction entered into by the licensor in

67-12  good faith and without unreasonable delay; or

67-13             (II) The market value of a commercially reasonable

67-14  hypothetical substitute transaction;

67-15         (3) For performances not governed by subparagraph (1), if

67-16  the breach does not make possible a substitute transaction, lost

67-17  profit, including reasonable overhead, that the licensor would

67-18  have realized on acceptance and full payment for performance

67-19  that was not delivered to the licensee because of the licensee’s

67-20  breach; or

67-21         (4) Damages calculated in any reasonable manner; and

67-22     (b) Consequential and incidental damages.

67-23     Sec. 177.  1.  Subject to subsection 2 and except as otherwise

67-24  provided in section 175 of this act, a breach of contract by a

67-25  licensor entitles the licensee to recover the following compensation

67-26  for losses resulting in the ordinary course from the breach or, if

67-27  appropriate, as to the whole contract, less expenses avoided as a

67-28  result of the breach to the extent not otherwise accounted for

67-29  under this section:

67-30     (a) Damages measured in any combination of the following

67-31  ways, but not to exceed the market value of the performance that

67-32  was the subject of the breach plus restitution of any amounts paid

67-33  for performance not received and not accounted for within the

67-34  indicated recovery:

67-35         (1) With respect to performance that has been accepted and

67-36  the acceptance not rightfully revoked, the value of the

67-37  performance required less the value of the performance accepted

67-38  as of the time and place of acceptance;

67-39         (2) With respect to performance that has not been rendered

67-40  or that was rightfully refused or acceptance of which was

67-41  rightfully revoked:

67-42             (I) The amount of any payments made and the value of

67-43  other consideration given to the licensor with respect to that

67-44  performance and not previously returned to the licensee;

68-1              (II) The market value of the performance less the

68-2  contract fee for that performance; or

68-3              (III) The cost of a commercially reasonable substitute

68-4  transaction less the contract fee under the breached contract, if

68-5  the substitute transaction was entered into by the licensee in good

68-6  faith and without unreasonable delay for substantially similar

68-7  information with the same contractual use terms; or

68-8          (3) Damages calculated in any reasonable manner; and

68-9      (b) Incidental and consequential damages.

68-10     2.  The amount of damages must be reduced by any unpaid

68-11  contract fees for performance by the licensor which has been

68-12  accepted by the licensee and as to which the acceptance has not

68-13  been rightfully revoked.

68-14     Sec. 178.  1.  Except as otherwise provided in subsection 2,

68-15  an aggrieved party, upon notifying the party in breach of contract

68-16  of its intention to do so, may deduct all or any part of the damages

68-17  resulting from the breach from any payments still due under the

68-18  same contract.

68-19     2.  If a breach of contract is not material with reference to the

68-20  particular performance, an aggrieved party may exercise its rights

68-21  under subsection 1 only if the agreement does not require further

68-22  affirmative performance by the other party and the amount of

68-23  damages deducted can be readily liquidated under the agreement.

68-24     Sec. 179.  1.  Specific performance may be ordered:

68-25     (a) If the agreement provides for that remedy, other than an

68-26  obligation for the payment of money;

68-27     (b) If the contract was not for personal services and the agreed

68-28  performance is unique; or

68-29     (c) In other proper circumstances.

68-30     2.  An order for specific performance may contain any

68-31  conditions considered just and must provide adequate safeguards

68-32  consistent with the contract to protect the confidentiality of

68-33  information, information, and informational rights of both parties.

68-34     Sec. 180.  1.  On breach of contract by a licensee, the

68-35  licensor may:

68-36     (a) Identify to the contract any conforming copy not already

68-37  identified if, at the time the licensor learned of the breach, the

68-38  copy was in its possession;

68-39     (b) In the exercise of reasonable commercial judgment for

68-40  purposes of avoiding loss and effective realization on effort or

68-41  investment, complete the information and identify it to the

68-42  contract, cease work on it, relicense or dispose of it, or proceed in

68-43  any other commercially reasonable manner; and

68-44     (c) Pursue any remedy for breach that has not been waived.

69-1      2.  On breach by a licensee, both parties remain bound by all

69-2  restrictions in contractual use terms, but the contractual use terms

69-3  do not apply to information or copies properly received or obtained

69-4  from another source.

69-5      Sec. 181.  On breach of contract by a licensor, the following

69-6  rules apply:

69-7      1.  A licensee that has not cancelled the contract may

69-8  continue to use the information and informational rights under

69-9  the contract. If the licensee continues to use the information or

69-10  informational rights, the licensee is bound by all terms of the

69-11  contract, including contractual use terms, obligations not to

69-12  compete, and obligations to pay contract fees.

69-13     2.  The licensee may pursue any remedy for breach which has

69-14  not been waived.

69-15     3.  The licensor’s rights remain in effect but are subject to the

69-16  licensee’s remedy for breach, including any right of recoupment

69-17  or setoff.

69-18     Sec. 182.  On material breach of an access contract or if the

69-19  agreement so provides, a party may discontinue all contractual

69-20  rights of access of the party in breach and direct any person that is

69-21  assisting the performance of the contract to discontinue its

69-22  performance.

69-23     Sec. 183.  1.  On cancellation of a license, the licensor has

69-24  the right:

69-25     (a) To possession of all copies of the licensed information in

69-26  the possession or control of the licensee and any other materials

69-27  pertaining to that information which by contract are to be

69-28  returned or delivered by the licensee to the licensor; and

69-29     (b) To prevent the continued exercise of contractual and

69-30  informational rights in the licensed information under the license.

69-31     2.  Except as otherwise provided in sections 182 and 184 of

69-32  this act, a licensor may exercise its rights under subsection 1

69-33  without judicial process only if this can be done by taking

69-34  possession of a tangible copy without a breach of the peace. In

69-35  that event, the licensor may take further steps with respect to the

69-36  copy, including erasing the copy by electronic means, subject to

69-37  the same obligations that arise under subsection 1 of section 158

69-38  of this act relating to return of the licensee’s information and a

69-39  licensor shall exercise reasonable care in the custody and

69-40  preservation of the licensee’s property in the licensor’s possession.

69-41     3.  In a judicial proceeding, the court may enjoin a licensee in

69-42  breach of contract from continued use of the information and

69-43  informational rights and may order the licensor or a judicial

69-44  officer to take the steps described in section 158 of this act.

70-1      4.  A party has a right to an expedited judicial hearing on a

70-2  request for prejudgment relief to enforce or protect its rights under

70-3  this section.

70-4      5.  The right to possession under this section is not available

70-5  to the extent that the information, before breach of the license and

70-6  in the ordinary course of performance under the license, was so

70-7  altered or commingled that the information is no longer

70-8  identifiable or separable.

70-9      6.  A licensee that provides information to a licensor subject to

70-10  contractual use terms has the rights and is subject to the

70-11  limitations of a licensor under this section with respect to the

70-12  information it provides.

70-13     Sec. 184.  1.  As used in this section, “electronic self-help”

70-14  means the electronic exercise without court order of a licensor’s

70-15  rights in the event of cancellation of a license because of a the

70-16  licensee’s breach of contract, but does not include actions

70-17  expressly permitted under section 182 and subsection 2 of section

70-18  183 of this act.

70-19     2.  Electronic self-help is prohibited.

70-20     3.  In an application by a licensor in which the licensor seeks

70-21  prejudgment relief pursuant to contractual rights to prevent

70-22  continued use of the information by a licensee, a court may award

70-23  the prevailing party in that proceeding reasonable attorneys fees

70-24  with respect to the proceeding notwithstanding any term of a

70-25  license.

70-26     4.  The limitations under this section may not be waived or

70-27  varied by an agreement before breach of contract.

70-28     5.  This section does not affect rights or obligations under

70-29  laws other than those in this chapter, including Title 17 of the

70-30  United States Code.

70-31     Sec. 185.  Contracts that are enforceable and rights of action

70-32  that accrue before October 1, 2003, are governed by the law then

70-33  in effect unless the parties agree to be governed by the provisions

70-34  of this chapter.

70-35     Sec. 186.  The provisions of this chapter modify, limit and

70-36  supersede the federal Electronic Signatures in Global and

70-37  National Commerce Act, 15 U.S.C. §§ 7001 et seq., but do not

70-38  modify, limit or supersede section 101(c) of that act, 15 U.S.C. §

70-39  7001(c), or authorize electronic delivery of any of the notices

70-40  described in section 103(b) of that act, 15 U.S.C. § 7003(b).

 

70-41  H