See also UCITA Online's Frequently Asked Questions

Introduction   Myths   More material on myths

This page is out of date. It has not been updated to reflect the revisions proposed to UCITA in 2002. Some brief notes are included below.

UCITA has been the subject of much uninformed commentary. Its provisions have been mischaracterized so often in the press, that many of the claims have risen to the status of urban legends ("UCITA bans reverse engineering!" (no it doesn't, see below)).

The unfortunate consequence is that consumers, licensees and small software developers are not being educated about UCITA.

Equally unfortunate is that many are being led to expect dire consequences for software users in cases where UCITA either follows current law or adds more licensee protections.

Linux supporters oppose UCITA because they've been told it will allow licensors to disclaim warranties which will lead to "defective" products being distributed. However, the law is no different today - the general rule is that products are not required to come with a warranty - they may be sold "as is."1

Linux, an open-source operating system (currently seen as the only potential competitor to Microsoft's Windows) is available without charge, and without a warranty.2 Had it been required to carry a warranty, its creator could not have afforded to make it available for free to the world at large.3

Warranty disclaimers play a much more critical role in the software industry than in industries which manufacture and distribute traditional goods. Beta version software is distributed for the purpose of being tested for bugs. Ironically, requiring a warranty would likely result in the disappearance of this common bug finding technique.

The ability to disclaim warranties has given rise to the tremendous growth and development of free software, a market segment that is so important a new word was coined for it - "freeware." The products are unwarranted, because they are free.4 Initially, this was software created by individuals and distributed for non-commercial purposes. Today, free programs plays a critically vital role in the distribution of commercial software (examples).

Some myths:

  1. UCITA was written by the software industry. No, it wasn't.
    See UCITA Online's Who Wrote UCITA.

  2. UCITA prohibits, bans, outlaws or criminalizes reverse engineering. No, it doesn't. UCITA does not change the law in this area. In fact, the text of UCITA does not mention reverse engineering. The Comments5 indicate that a reverse engineering ban might be challenged under the public policy provisions if needed for interoperability purposes. [N.B. This answer is out of date.The current version of UCITA affirmatively allows reverse engineering in some circumstances. Cak 7/26/02]
    For more information see FAQs - Does UCITA prevent reverse engineering?

  3. The default rules can only be overidden by a shrinkwrap license. This is simply wrong. The default rules can be overridden by any type of sales or license agreement. [N.B. The issue here is whether there is a legally binding agreement under UCITA. Licenses that are buired in files, such as open source/free software licenses tend to be, and which do not purport to be agreements, will likely not be effective to disclaim a warranty. Cak 7/26/02]

  4. UCITA transforms a sale into a license. UCITA does not change the law in this area. A transaction that is structured as a sale before UCITA will still be a sale after UCITA.
    For more information see The Need for a More Objective Look at the Myths of [UCITA] - Sale versus License, Donald A. Cohn & Mary Jo Dively, ABA Advisors to the UCITA drafting committee.

  5. UCITA prevents the transfer of licenses. Wrong again. The parties decide if the license is transferable. If they don't address the issue the default rule is that the license can be transferred, unless it would make a material difference to the other party.
    For more information see FAQs - Transferability of license.

  6. UCITA allows licensors to prohibit negative reviews of a product. Still wrong. UCITA does not change the law in this area, except that it provides a new legal principle that might be used to challenge such a restriction, the violation of fundamental public policy provision. The Comments to this provision acknowledge the validity of confidentiality clauses, but indicate that in a mass market context, such a restriction might be challenged.
    For more information see FAQs - Does UCITA really make enforceable "sweeping contract restrictions on quotation and fair comment?" (No)

  7. UCITA would let a licensor require that you sue in Paraguay. Nope. UCITA will not uphold a choice of forum that is unreasonable and unjust. In any event, parties cannot force a foreign court to hear a contract dispute over which it has no jurisdiction.
    For more information see FAQs - But doesn't this really mean that the licensor can force me to go sue in any place it wants, like China or Iran? (No)

  8. Licensors could impose outrageous restrictions. UCITA does not change the law in this area. The common law doctrine of unconscionability allows courts to invalidate such terms. UCITA adopts and codifies this doctrine.
    See (click on the link and then use the "Find" funtion) UCITA, Section 111 Unconscionable Contract or Term and Official Comments to Section 111.

  9. UCITA exempts the software industry from consumer rights. In fact, the opposite is true. UCITA provides that consumer protection laws trump. What’s more, UCITA also provides that consumer protection law trumps an otherwise enforceable choice of the law clause.
    For more information see FAQs - Consumer Issues and FAQs - What limitations does UCITA place on contract choice of law?

More material on the myths about UCITA:

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1 The Uniform Commercial Code Article 2, which governs sales of goods, allows warranties to be entirely disclaimed. Some states have a different rule for sales of goods to consumers. If this rule were to be applied to software, consumers in these states might find suppliers reluctant to offer them freeware.

UCITA actually expands warranty law. See FAQs - Warranties.

2 See e.g., the GNU General Public License ("there is no warranty for this free software"), a typical license used for products built with a Linux core.

3Linux was initially created by Linus Torvald from Finland (and more recently, Silicon Valley), with later additions from many other programmers. Application software is now being written for Linux by public corporations, including IBM, as well as by various open-source software developers. Much of this software is also distributed without a warranty. Some recently successful IPOs have been companies which write software for the Linux operating platform.

Open-source software is so named because the source code, usually a jealously guarded secret, is publicly available so that any programmer can modify and further develop the program. The consequence is that the identify of all the people who have contributed to the source code may be unknown. Anyone is free to distribute it, subject to certain restrictions such as passing on the information that it was received without a warranty. See the GNU General Public License

4 Free software, almost by definition, needs a warranty disclaimer. There is no income stream to fund the administration of a warranty system, let alone a defense (even a successful one) against a warranty claim. It is a return to the time when companies relied solely on their reputation for quality.

Examples: Some of the most famous free software are the web browsers distributed by Netscape and Microsoft. Take a look at Netscape's Communicator browser software license (go to Help menu, click on "About Communicator"). It says "THE PRODUCT IS PROVIDED FREE OF CHARGE, AND, THEREFORE, ON AN "AS IS" BASIS, WITHOUT WARRANTY OF ANY KIND . . . ."

Some companies distribute simpler versions of their software without charge, such as Eudora Light which is the free version of the popular Eudora email software.

Other companies offer free 30-day trial versions of their software.

It is standard distribution practice for a company which distributes software to convert an item into a web product to distribute the software to access those products for free. Witness Adobe's free Acrobat Reader, and all the audio and video plug-ins that one never has to pay for.

The computer used to create UCITA Online has a free browser, a free HTML editor used to create these web pages, a free FTP program used to transfer the pages to the web host's computer, a free email program, two free programs for reading electronic faxes, Acrobat Reader, free software for video, free software for audio, a free screen saver program, a free program to make animated graphics, and more.

5 The Comments are explanatory text which accompanies each section of UCITA. They explain the origin of the legal principle set forth and provide information intended to assist in interpreting the section. A link to the Comments is found in UCITA Online's What is UCITA.



Page created 3/14/00, revised 7/26/02. Copyright © 2000 Kunze. All rights reserved.