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Introduction
Summary of Issues
The Correspondence
UCITA has precipitated much controversy. So did the Uniform Commercial Code, recognized today as the backbone of commercial law in the U.S.
Strong resistance appears to accompany all important and groundbreaking legislation. . .
Many criticized the UCC as too dramatic a change from contemporary law, but by the time it was widely adopted, it was viewed as obvious.
Holly Towle, The Politics of Licensing Law, 36 Houston Law Review No. 1 (Spring 1999),
Carlyle (Connie) C. Ring, Jr., the chair of NCCUSL's UCITA drafting committee, has responded to a letter jointly signed by state attorneys general.
The following presents a brief summary of the issues raised in this correspondence, a summary of the reponse and links to the original documents.
Summary of Issues
In brief:
By and large, the concerns of the attorneys general
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relate to common practices which have long been accepted under the UCC ,
represent a misreading of the Act, or
overlook protections included in UCITA.
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1. Conspicuous. The state attorneys general (AG's) express concern that requirements in
consumer protection laws relating to disclosure (place & manner, readibility, etc.) will be displaced by UCITA's definition of "conspicuous."
Response:
- the identified requirements are not encompassed within the definition of conspicuous and would not be displaced, and
- except for terms necessary for ecommerce, consumer protection statutes govern over conflicting terms in UCITA.
2. Safe harbors in the definition of conspicuous. The AG's oppose safe harbors.
Response:
- the UCC uses such safe harbors, and
- guidance is needed for e-commerce.
3. Terms presented after payment. The AG's argue that consumers do not expect to be presented with terms "after a sale" and material terms should be disclosed prior to purchase.
Response:
- it has been a common business practice for 50 years under the UCC,
- UCITA requires that parties know terms will be presented later,
- the terms must be presented in a manner that ought to call it to the attention of a reasonable person and permit review,
- consumers are also entitled to return the product cost-free.
4. Unilateral contract modification. The AG's take issue with what is claimed to be "minimal" notice requirements to make changes in ongoing performance contracts.
Response:
- the relevant section applies only if the parties have agreed to a procedure for making changes to the contract,
- the UCC has allowed parties to agree on such reasonable procedures for 50 years,
- the procedure must reasonably notify the other party of changes, and the notice must be given in good faith, and
- UCITA gives consumers the right to terminate a contract if the unilateral change is material.
5. Consumer access contracts should not be excluded from the definition of mass market transactions.
Response:
- Consumer access contracts are mass market transactions.
The Correspondence
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