Understanding Open Source and Free Software Licensing

Statutory Developments Related to Software Contracts

The Uniform Electronic Transactions Act (UETA), a model law adopted by at least 22 states and under consideration in others, provides as a general matter that a contract may not be denied legal effect simply because the contract is recorded in an electronic medium and not on paper.

E-Sign, a federal law passed on October 1, 2000, operates to a similar effect, in holding that digital signatures on documents are as effective as ordinary written signatures on paper in memorializing an agreement.

Neither UETA nor E-Sign purports to alter ordinary state law governing interpretation of contracts.

Another model law, the Uniform Computer Information Transaction Act (UCITA), does modify ordinary state contract laws relating to transactions in software. Although it is intended to facilitate transactions in information and provide for uniform interpretation of contracts governing such transactions, the UCITA has not been widely adopted. Only two states, Maryland and Virginia, have adopted UCITA; a number of states, however, have adopted anti-UCITA statutes. Because UCITA's effect is currently very limited and does not seem likely to spread in the near future, it is not further addressed here.