(1) "Access contract" means a contract for electronic access to, or for electronic information from, a separate electronic information processing system.resource or facility containing information. The term does not include a contract for physical access to a physical location, such as a theater or the like.

(2) "Attribution procedure" means a commercially reasonable procedure established by law or, regulation, or established by agreement, or adopted by the parties, for the purpose of verifying that an electronic authentication, record, message, or performance is that of the respective party, or for detecting changes or errors in content.

(3) (A) "Authenticate" means to sign, or to execute or adopt a symbol or sound, or to encrypt or process a record in whole or in part, with intent by the authenticating party to

(A) identify that party;

(B) adopt or accept a record or term that contains the authentication or to which a record containing the authentication refers; or

(C) assert attest to the integrity genuineness of a record or term that contains the authentication or to which a record containing the authentication refers.

(4) "Automated transaction" means a contract formed by electronic means or electronic messages in which the acts or messages of one or both parties will not be reviewed by an individual as an ordinary step in forming the contract.

(5) "Cancellation" means ending an act that ends a contract because of breach by the other party. "Cancel" has a corresponding meaning.

(6) "Computer program" means a set of statements or instructions to be used directly or indirectly in an information processing system in order to bring about a certain result. The term does not include informational content created or communicated as a result of the operation of the system.

(7) "Consequential damages" (A) include means compensation for any provable losses resulting in the ordinary course from the breach or from a party's general or particular circumstances, requirements and needs of which the other party at the time of contracting had reason to know effective under Section 1-201(27), and which losses could not reasonably be prevented by the aggrieved party, by mitigation or otherwise, and from injury to person or property proximately resulting from any breach of warranty. , but (B) tThe term does not include direct or incidental damages.

(8) "Conspicuous", with reference to a term or clause, means so written, displayed or presented that a reasonable person against whom which it is to operate ought to have noticed it. or, iIn the case of an electronic record intended to evoke a response by an electronic agent, a term or clause is conspicuous if it is presented in a form that would enable a reasonably configured electronic agent to take it into account or react without review of the record by an individual. Conspicuous terms or clauses include but are not limited to the following:

(i) a heading in capitals (as: Non-Negotiable Bill of Lading) equal or greater in size to the surrounding text;

(ii) language in a record or display in larger or other contrasting type or color than other language or set off from other language by symbols or other marks that call attention to the language (as: ** Disclaimer **); or

(iii) a term or a clause prominently referenced in the body or text of an electronic record or display and is can be readily accessible ed and reviewable ed from the record or display; and

(B) A term or a clause is conspicuous with respect to a person or an electronic agent, a term or clause that if it is: (i) so positioned in a record or display that the person or electronic agent cannot proceed without some additional action taken with respect to the term.it; or (ii) language that in any other manner is conspicuous.

(9) "Consumer" means an individual who is a licensee of information or informational property rights that at the time of the contracting, was intended by the individual to be used primarily for personal, family, or household purposes.use. The term does not include an individual who that is a licensee of information primarily for profit-making, professional, or commercial purposes, including agricultural use, business management, and investment management, other than management of the individual's personal or family investments.

(110) "Contract fee" means the price, fee, rent, or royalty payable under a contract under this article.

(121) "Contractual use restrictions" means a limitations created by the contract on use of information or informational property rights, including an obligations of nondisclosure and confidentiality and a limitations on scope, manner, method, or location of use, that are created by the contract.

(132) "Copy" means information that is fixed on a temporary or permanent basis in a medium from which the information can be perceived, reproduced, used, or communicated, either directly or with the aid of a device.machine. The term includes a phonorecord..

(143) "Court" includes an arbitration or or other dispute-resolution tribunal.

(154) "Delivery", as to a contractual performance, means the voluntary physical or electronic transfer of possession or control of a copy. to a recipient, a facility, or a bailee if the recipient party to receive the delivery has a right of access to the copy in the bailee's possession.

(165) "[Direct] [general] damages" means compensation for losses consisting of the difference between the value of the required performance, as measured by the contract or by the market value of the performance, and the value of the performance actually received, or in an appropriate case, compensation for losses in the nature of reliance or restitution. The term does not include consequential or incidental damages.

(176) "Electronic" means of or relating to electrical, digital, magnetic, wireless, optical, or electromagnetic technology, or any other form of technology that entails similar capabilities.

(187) "Electronic agent" means a computer program or other electronic or automated means used, selected, or programmed by a person to initiate or respond on behalf of that person to electronic messages or performances without review by an individual.

(198) "Electronic message" means an electronic record or display that is stored, generated, or transmitted by electronic means for purposes of communication to a nother person or an electronic agent.

(20) "Financier" means a person that provides a financial accommodation to a licensor or licensee under a security agreement or lease and obtains an interest in athe license or related contract rights of the party to which the financial accommodation is provided.

(21) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing.

(22) (A) "Incidental damages:"

(i) in inspection, receipt, transportation, care, or custody of rightfully refused copies or information;

(ii) in stopping delivery, shipment, or transmission;

(iii) in effecting cover, mitigation, return or retransfer of copies or information; or

(iv) otherwise incident to the breach; and.

(B) The term does not include compensation for consequential or [direct] [general] damages.

(23) "Information" means data, text, images, sounds, mask works, or and works of authorship, along with any related informational property rights in such information.

(25) "Informational content" means information that in its ordinary use is intended to be communicated to or perceived by an individual person in the ordinary use of the information, or the equivalent of such information. The term does not include data used merely to control the interaction of a computer program with other devices or other computer programs.

(26) "Informational property rights" include all rights in information created under laws [governing patents, copyrights, mask works, trade secrets, trademarks, publicity rights, or any other law] which that permits a party independently of contract to control or preclude another party's use or disclosure of information on the basis of the owner's interest in the information.

(A) an unconditional transfer of ownership of all informational property rights;, or

(B) a reservation or creation of a financier's interest or a security interest., or (C) a transfer by will or operation of law.

(28) "Licensee" means a person authorized to exercise rights or permissions in information or informational property rights in an agreement contract under this article, whether or not the agreement is contract constitutes a license.

(29) "Licensor" means a transferor in an agreement contract under this article whether or not the agreement is contract constitutes a license. The term includes a provider of services. In an access contract, as between a provider of access and a customer, the provider is the licensor, and as between the provider of access and a provider of the content to be accessed, the provider of content is the licensor. If performance consists of an exchange of information, each party is a licensor with respect to the information or access it provides.

(30) "Mass-market license" means a standard form that is prepared for and used in a mass-market transaction.

(31) "Mass-market transaction" means a consumer transaction, or and any other transaction in information or informational property rights directed to the general public as a whole under substantially the same terms for the same information with an end-user licensee. To qualify constitute as a mass-market transaction if the licensee is not a consumer, the licensee must acquire the information or rights in a retail transaction under terms and in a quantity consistent with an ordinary transaction in that marketplace. The term does not include:

(A) a contract for redistribution;

(B) a contract for public performance or public display of a copyrighted work;

(C) a transaction in which the information is or becomes customized or otherwise specially prepared by the licensor for the licensee;

(D) a site license;, or

(E) an access contract not involving a consumer.

(32) "Merchant" means a person that deals in information or informational property rights of the kind or otherwise by the person's occupation holds itself out as having knowledge or skill peculiar to the practices or information involved in the transaction, [whether or not the person previously engaged in such transactions], or to which such knowledge or skill may be attributed by the person's employment of an agent or broker or other intermediary that by its occupation holds itself out as having such knowledge or skill.

(33) "Nonexclusive license" means a license that does not preclude the licensor from offering under which the same rights or permissions within the same scope may be offered by the licensor to other licensees. The term includes a consignment of copies.

(34) "Present value" means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties in their agreement unless that rate was manifestly unreasonable when the transaction was entered into. Otherwise, the discount is determined by a commercially reasonable rate that takes into account the circumstances of each case when at the time the transaction was entered into.

(35) "Published informational content" means informational content prepared for or made available to recipients generally or a class of recipients in substantially the same form and not customized for a particular recipient by an individual or group of individuals acting on behalf of the licensor and using judgment and expertise. The term does not include informational content provided in a special relationship of reliance between the provider and the recipient.

(36) "Receive," means that

(A) comes to athe person's attention; or

(CB) a notice or notification is delivered to a location designated by agreement for that purpose or, in the absence of an agreed location:

(i) is delivered at the individual's residence or the person' place of business through which the contract was made, or at any other place held out by the person as a place for receipt of such communications, or

(ii) in the case of an electronic notification, comes into existence in an information processing system in a form capable of being processed by or perceived from a system of that type, and the recipient uses, or otherwise has designated and or holds out that system as a place for the receipt of such notices or notifications.

(37) "Record" means information inscribed on a tangible medium or stored in an electronic or other medium and retrievable in perceivable form.

(38) "Refund", with respect to a refused rejected record or term, means:

(A) reimbursement of any contract fee paid and a right to stop any payment already initiated but not yet completed, on on proof of purchase and return of the product and all copies to which the record applies within a reasonable time after delivery; or

(B) with respect to multiple products integrated into a bundled whole and transferred for one bundled price:

(i) if the record is material to the bundled product and is rejected refused before or during the initial use of the bundled product and the bundled product is returned without further use, reimbursement of the entire bundled price on proof of purchase and return of the entire bundled product and all copies within a reasonable time after delivery; or

(ii) in all other cases, reimbursement of the fee paid for the rejected record or, if no fee is separately stated, an allocation of the fee attributable to information to which the rejected record applies that is reasonable with respect to the licensor and the rejecting party in light of the circumstances on proof of purchase and return of all copies to which the rejectedrefused record applies within a reasonable time after delivery.

(39) "Release" means an agreement not to object to, or exercise legal or equitable remedies against, the use of information or of informational property rights, if which the agreement requires no affirmative acts by the party giving the release to enable or support the other party's use of the information. The term includes a waiver of informational property rights.

(401) "Scope"," with respect to a license, means terms of the license that define:

(A) the licensed copies or information, subject matter and the informational property rights involved;

(B) the uses authorized, prohibited, or controlled;

(C) the geographic area, market, or location in which the license applies; and

(D) the duration of the license.

(412) "Send" means to deposit in the mail or with an other commercially reasonable carrier or to otherwise to deliver for, or take all necessary steps that initiate, transmission to or creation within another location or system by any usual means of communication with any costs provided for and properly addressed or directed as reasonable under the circumstances or as otherwise agreed. With respect to an electronic message, the term means to initiate operations that in the ordinary course will cause the record to come into existence in an information processing system in a form capable of being processed by or perceived from a system of that type, and the recipient uses or by agreement or otherwise has designated or held out that system as a place for the receipt of such communications. Actual receipt within the time in which it would have arrived if properly sent has the effect of a proper sending.

(423) "Software" means a computer program , and any informational content included in the program, and any supporting information material provided by a licensor as part of the transaction.

(434) "Software contract" means a sale of a copy of software, a license of software, or a transfer of ownership of informational property rights in software, whether the software exists or is to be developed or created pursuant to the contract. The term includes a contract to develop software as a work for hire.

(445) "Standard form" means a record, or a group of linked records, containing contractual terms that were prepared for general and repeated use in transactions and are so used without negotiation of or changes in most of the terms. Negotiation or customization of price, quantity, method of payment, standard performance options, or time or method of delivery does not preclude a record from being a standard form.

(456) "Substantial performance" means performance that does not constitute a material breach of contract under Section 2B-109.

(47) "Termination" means ending an act by either party which puts an end to a contract under a power created by agreement or law for a reason other than its breach. "Terminate" has a corresponding meaning.

(b) Article 1 contains general definitions and principles of construction which that apply throughout this article. In addition, the following definitions in other articles of [the Uniform Commercial Code] apply to this article:

"Financial asset" Section 8-102(a)(9)

"Funds transfer" Section 4A-104 as applied to credit orders

"Identification" to the contract Section 2-501

"Instrument" Section 3-305

"Item" Section 4-104

"Letter of credit" Section 5-102

"Negotiable instrument" Section 3-104

"Payment order" Section 4A-103 as applied to credit orders

"Investment property" Section 9-115(f)

"Sale" Section 2-106

a. Adopted the term "authentication" to replace "signed" by a consensus without a formal vote.

b. Voted to retain the use of "authentication." Vote: 5 - 3 (November, 1997)

a. Voted to move references to particular types of damages from definition of consequential damages to the comments except for personal injury. Vote: 8-5 (Feb. 1997)

b. In Article 2, NCCUSL Annual Meeting defeated a motion to delete the disproportionate loss test.

c. Consensus to move speculative damage issue to substantive section. (Feb. 1998)

3. Information.

a. Rejected a motion to delete "intellectual property rights" from the definition of "information." Vote: 3-5 (Feb. 1997)

b. Adopted a motion to delete informational property rights from this definition and add that term to the definition of "license." Vote: 12-0 (Feb. 1998)

4. Consequential damages.

a. Deleted reference to mitigation or otherwise without substantive change. Vote: 7 - 4 (Feb. 1998).

a. NCCUSL sense of the house that the terminology conspicuous should be the same in the three articles and that definition should retain safe harbor language. (Annual Meeting 1997)

b. Sense of the house that conspicuousness should be a decision by court. (Annual Meeting 1997)

c. Committee reviewed without a motion on safe harbor use. (Nov. 1997)

a. Adopted the term "direct" rather than "general" damages. Vote: 8 - 1 (Feb. 1998).

a. NCCUSL voted to expand concept to cover consumer obligations of fair dealing. (July, 1997)

a. Adopted a motion to retain the limitation to retail transactions. Vote: 7 - 4 (Feb. 1998)

b. Rejected a motion to delete "in a quantity consistent". Vote: 4 - 8 (Feb. 1998)

c. Voted to retain the concept of "mass market" licenses, subject to consideration of use in specific sections as contrasted to use of the term "consumer." Vote: 13-0 (September, 1996)

d. Voted that definition of "mass market license" should refer to a market involving the general public and small retail transactions, excluding special business transactions. (December, 1996)

e. Voted 10-2 to retain the mass market concept pending consideration of its application. (Feb. 1997)

f. Voted to delete explicit coverage of all consumer transactions. Vote: 8-4 (Feb. 1997)

g. Voted to use a dollar limitation to cap the risk under definition of mass market. Vote: 10-3. (Feb. 1997)

h. Rejected a motion to delete any reference to "consumer" in the act. Vote: 4 - 8 (Nov. 1997)

i. Deleted one reference to "retail market" but retained another reference. Vote: 7 - 5

j. Agreed to retain current approach and not an adhesion contract definition. Vote: 11 - 0 (Nov. 1997)

k. Rejected a motion to rely solely on a dollar limitation. Vote: 3 - 10 (Nov. 1997)

l. Rejected a motion to delete the reference to "the general public as a whole." Vote: 2- 10. (Nov. 1997)

m. Rejected a motion to delete the language of "as a whole". Vote: 5 - 5. (Nov. 1997)

n. Deleted the dollar cap on the understanding that applications of the concept would be reviewed in light of this change. Vote: 6 - 3. (Nov. 1997)

o. Rejected a motion to delete the concept. Vote: 1 - 8. (Nov. 1997)

a. Adopted language that merchant need not previously have engaged in the type of transaction. Vote: 6-4 (Feb. 1998)

a. Rejected a motion to require that it be more than transitory. Vote: 0 - 10 (Feb. 1998).

1. "Access contract." Access contracts are contracts that authorize electronic access to a facility or that allow obtaining information from a facility controlled by the licensor or another party. The contract does not depend on informational property rights, but on control of an information processing system. A party's right to preclude unauthorized access to a computer is recognized in most states and in federal law. The system may be an Internet web site, a computer containing a database, or any other electronic information processing system. The term also includes contracts for the use of remote data processing, including third party E-mail systems, as well as situations where a database in the licensee's information processing system is automatically updated either by an aspect of the program in the licensee's system automatically accessing the remote system, or the remote system automatically accessing the local database and adding updated material to it.

Access contracts are a major method of information distribution. Digital technology enables a shift from distribution in physical copies to merely making information available at a remote location. The contracts often entail what some describe a "pull technology" whereby a licensee reaches into the information processing system to obtain or use relevant information or processing. An access contract requires electronic access. The term does not cover grants of a right physically to enter, for example, a building in which information is displayed or made available in books.

The definition also does not refer to chips or systems enabling access within a product such as a smart card or programs resident in the same computer. It applies to arrangements that grant permission to access remote data, processing or similar resources. This is made explicit in the reference to "separate" information processing systems.

Often, the provider of access also provides contractual rights in the information systems that are accessed by the licensee. In some cases, the information is that of the access licensor, while in others, the transaction involves a three party framework. In the three-party relationship, one person provides access, while another party (the information provider) licenses information to the customer. This three party transaction involves two and, in some cases, three separate contracts. The first is between the content provider and the access provider. This may be an ordinary license to the information or an access contract itself. The second is between the access provider and the end user. This is an access contract. The third occurs if the content provider contracts directly with the end user or client. Typically, the contracts are independent.

2. "Attribution procedure." The concept and legal significance of use of a commercially reasonable attribution procedure derives from Article 4A and the use in that article of automated systems described as a "security procedure." To be an attribution procedure, the procedure must be adopted by the parties or imposed by law in reference to the type of use involved. Further description of the effect of the concept is in Sections 2B-114 to 2B-117. The definition of "attribution procedure" is neutral as to commercial reasonableness, but the benefits provided in this article resulting from use of an attribution procedure only pertain to procedures that are commercially reasonable.

3. "Authenticate." Authenticate replaces "signature" or "signed" in this article. It expands on the traditional concept of signature. The adoption or execution of any symbol with the intent to sign or authenticate that which would have been a signature under prior law, is an authentication under Article 2B. This would include, for example, the use of identifiers such as a PIN number, if their use is with the requisite intent. In addition, the definition expands prior law and expressly includes actions and sounds. Both of these are potentially important in electronic commerce and can be used to achieve the purposes historically associated with a signatures, encryption and other technologically enabled activities can and will be used to achieve the effects that a traditional, written signature would achieve. The critical factor in meeting the concept of authentication lies in the objective intent with which the party acts. The idea of authentication encompasses not only the adoption of symbol intended to authenticate a record, but other processing of the record intended to achieve the same effect.

The definition is technologically neutral. Statutes in some states give special recognition to "digital signatures" that rely on a specific encryption technology and a certification or licensing system. The procedures established under that type of legislation qualify as an authentication for purposes of Article 2B. The Article 2B concept is broader, however, and recognizes that technology and commercial practice are constantly changing and provide many different ways of achieving an authentication. This technology neutral approach is endorsed by federal government reports on electronic commerce.

Authentication can be intended to have various effects. Which effect is intended relates to a party's intent as expressed or inferred from the circumstances of use of the authentication. Absent circumstances indicating a different intent, an authentication contemplates all three of the effects listed (see Section 2B-119).

4. "Automated transaction" refers to transactions formed and effective as a contract even though one of the parties or both are represented by automated devices, such as electronic agents used for the purpose of engaging in a contractual relationship. This type of contracting, which became common with the advent of automated ordering devices using voice systems, is widely used in electronic commerce as sophisticated computer systems seek out resources and make transactions with other systems holding those resources, all without the direct guidance of an individual reviewing the choice made by the automated entities. While law could adopt a fiction that attributes to these automated activities the intent of the person selecting and using them, this Article directly recognizes that these interactions involve operations of automated systems and that they can create binding legal obligations for those who use them.

5. "Cancellation" corresponds to existing Section 2-106.

6. "Computer program" parallels the U.S. Copyright Act (17 U.S.C. § 101) and adds language to implement the distinction in this Article between programs as operating instructions on the one hand, and "informational content" as information communicated to people on the other hand.

For purposes of this article, "computer program" refers to the functional aspects of software, while informational content refers to output intended to communicate to a human being. In essence, the term refers to how the program operates, while the term "informational content" refers to the information it produces in the ordinary course for perception by a human being. That there is overlap in the terms is inevitable. However, in cases where questions arise about what aspect of a software system provides the basic qualitative and other conditions for performance of the program, the answer lies in whether the issue address functional operations and the effect of any malfunction in those operations (program) or errors or inadequacies in communicated content (informational content). In situations where a program is provided in source code form, the fact that the source code can be read by a human does not change the fact that the transaction involves a computer program and applicable merchantability or other warranties pertaining to the functioning of that program apply.

7. "Consequential damages" corresponds to existing Article 2 but provides that consequential damages may be recovered by either party. This follows common law and acknowledges the mutuality of risk characteristic of many transactions in information and informational property rights.

The losses suffered must be an ordinary (predictable) result of the breach. See Restatement (Second) of Contracts § 351(2). The losses must be foreseeable or, in the case of personal injury or property damage, must proximately result from the breach. This means that for losses resulting from the special circumstances of the other party to be awarded against the party in breach, there must be actual notice of those circumstances. If losses result from particular needs or circumstances of the aggrieved party, those particular needs and circumstances must be made known at the time of contracting. Losses resulting from ordinary general requirements can often be presumed to have been within the contemplation of the other party.

The burden of proving loss is on the party claiming damages. The Article does not require proof with absolute certainty or mathematical precision. Consistent with the underlying principle of Article 1 that there be a liberal administration of the remedies of this Act, the remedies must be administered in a reasonable manner. However, this does not permit recovery of losses that are speculative or highly uncertain and therefore unproven. See Section 2B-707 and Restatement (Second) of Contracts 352 ("Damages are not recoverable for loss beyond the amount that the evidence permits to be established with reasonable certainty."). No change in law on this issue is intended. See Freund v. Washington Square Press, Inc., 34 N.Y.2d 379, 357 N.Y.S.2d 857, 314 N.E.2d 419 (1974) ("[Plaintiff's] expectancy interest in the royalties ... was speculative. [He] provided no stable foundation for a reasonable estimate of royalties he would have earned had defendant not breached his promise to publish. [The] claim for royalties fails for uncertainty.").

Consequential damages do not include "direct" or "incidental" damages. While the boundaries among these terms are not precise, the terms are used both by courts and by parties drafting agreements and this Article provides guidance on what damages fall within the various categories. The realm of consequential loss lies in those damages that go beyond the difference in value of the performance received and the performance promised. They deal with either losses of the benefits that were anticipated as a result of the performance or detriments or costs incurred as a result of non-performance and not incident to the breach itself. Thus, consequential damages include damages in the form of lost profit or opportunity that could occur from use of delivered information, damages to reputation, damages in the form of lost value of trade secret information associated with a contract breach of wrongful disclosure, damages for loss of privacy interests associated with a contract breach, and damages from loss of data as a result of an operational defect.

Recovery of consequential damages, of course, is limited by other principles in this Article, in common law, and by contract limits. Section 2B-707 provides that consequential damages that are disproportionate to the risk assumed should not be awarded and that speculative damages are not recoverable. This Article does not specifically refer to concepts of mitigation in the definition of consequential damages, but of course that concept applies under Section 2B-707(c). No change in law is intended by the deletion.

8. "Conspicuous" follows existing law, but adds new concepts related to electronic commerce, while deleting a reference in existing law to terms in a telegram. The basic test is whether a term in a record is so positioned or presented that attention can reasonably be expected to be called to it. Whether a term of a contract is conspicuous is to be determined by the court. See Section 2B-106.

Current UCC § 1-201(10) contains four illustrations of conspicuous terms. These play a critical role in commercial practice. The purpose of requiring that a term be conspicuous and defining that concept blends a notice function (it ought to be noticed by a party) and a planning function (giving certainty to the party relying on the term). The illustrative methods create "safe harbors" that, over the years, have provided a way to avoid uncertainty and litigation. Absent exceptional (unconscionable) circumstances, a term that conforms to a safe harbor provision is conspicuous.

In modern commerce, many transactions are automated. The use of "electronic agents" requires a different concept of what is conspicuous: programs and devices do not "notice" in-puts, but respond operationally. In this automated environment, presentation in a form calculated to allow that reaction suffices. The record must be designed to invoke a response from a "reasonably configured" electronic agent, a concept analogous to the reasonable person standard of the general concept.

The illustrative terms in subsection (A) generally carry forward existing law without change and add additional themes relevant to modern commerce. However, Article 2B does not provide that all terms in a "telegram" are conspicuous. A "telegram" includes "any mechanical method of transmission, or the like" and could include E-Mail, facsimile, and similar communications. No per se rule is justified.

The provisions listed in (A) and (B) are illustrative, not exclusive. In situations outside their terms, a court should apply the general standard in subsection (A).

Subsection (A)(ii) contemplates setting the term or its label off by symbols which can be reliably transferred in electronic commerce. Thus, for example, a term that provides *** Disclaimer *** is conspicuous, as is a term that provides <<< Disclaimer >>>.

Subsection (A)(iii) deals with hyperlink and related technologies that are important in Internet commerce. It contemplates a situation in which a computer screen displays a term or image and the party using the display, by taking an action with reference to that term or image, is transferred to a different file or location wherein the relevant contract term is available. To be conspicuous, the image must be prominent and its use must readily enable review of the contract term itself. The access must be from the screen or display itself and not through other actions such as a telephone call or physically going to another location. When the term is accessed, it must be in a form that can be readily reviewed. The term must be referenced, not simply the contract.

Subsection (B) recognizes a procedure by which, without taking action with respect to the term, the party cannot proceed further in reference to the file or location. Thus, for example, a screen which states: "There are no warranties of accuracy with respect to the information on this site" that is displayed in a form that precludes the user from moving further in the system without expressing assent to this condition, suffices under this concept.

9. "Consumer." This definition adapts language from existing Article 9 defining "consumer goods." A "consumer" transaction is one involving subject matter obtained for personal, household, or family purposes; this principle is used in various areas of law. Whether a party is a consumer is determined at the time of contracting. While Article 2B deals with many on-going relationships, changes in purpose or use after a contract becomes enforceable do not retroactively alter the standards applicable to the contract.

In information transactions, many "personal" uses are not consumer uses (e.g., a stock broker using database software to personally monitor billion dollar client investments). Distinguishing business uses and true consumer uses has great importance in Article 2B and other law. The definition distinguishes between profit making, professional or business uses by anyone (business or consumer), and personal or family uses more akin to ordinary consumer activities, but including ordinary asset management for a family. In the modern economy where individuals personally engage in serious commercial enterprises without a corporate structure, the personal use idea must continue to distinguish between consumer activities and business or other profit-making activities.

This resolves an issue that has arisen in many areas of law outside of Article 9 where making a distinction between consumer and non-consumer "personal" use has proven to be difficult and subject to litigation. This is true in lending, bankruptcy and other contexts. For example, a number of decisions focus on whether or when a purchase of stocks or limited partnership assets for investment purposes would be considered a consumer purchase since it might fall within the general reference to "personal" purposes. See, e.g., Thomas v. Sundance Properties, 726 F.2d 1417 (9^th Cir. 1984); In re Manning, 126 B.R. 984 (M. D. Tenn. 1991) (UCC definition "not especially helpful on its face"). Some courts emphasize the difference between acquisition for consumption (consumer) and acquisition or use "for profit-making." The Truth in Lending Act, for example, uses a definition of consumer debt much like the definition in Article 9 of consumer but contains an express exemption for business transactions. The "profit-making" test has been applied in bankruptcy cases. For example, the Fifth Circuit commented that "[The] test for determining whether a debt should be classified as a business debt, rather than a debt acquired for personal, family or household purposes is whether it was incurred with an eye toward profit." In re Booth, 858 F.2d 1051 (5^th Cir. 1988). See also In re Circle Five, Inc., 75 B.R. 686 (Bankr. D. Idaho 1987) ("Debt used to produce income is not consumer debt primarily for a personal, family or household purposes."). Article 2B thus resolves criticism that the UCC definition is not illuminating by making it clear that profit-making activities are not personal or consumer activities.

10. "Contract fee" recognizes the various forms and methods of monetary compensation encountered in information transactions. The term refers to essentially any money payment under a contract.

11. "Contractual use restriction." This term encompasses any enforceable restriction on use or disclosure of information or informational property rights created by contract. It does not include limitations imposed by other law, such as copyright or patent law, without contract terms. Similarly, it does not cover terms that are invalid under this Article or under other law.

12. "Copy." The definition corresponds to copyright law but does not seek to answer issues under that law about whether a brief reproduction in a computer memory creates a copy for purposes of that law. 17 U.S.C. 101. See MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993); Lewis Galoob Toys, Inc. v. Nintendo of America, 964 F.2d 965 (9th Cir. 1992). The term copy in this Article is not used in reference to infringement liability or to exclusive rights. Rather, in Article 2B, the term refers to particular types of manifestations of information and to performance questions associated with contractual events such as delivery, tender, and enabling use. For these purposes, the manifestation of the information can be either on a temporary or permanent basis.

13. "Court" includes officers of non-judicial forums such as arbitration.

14. "Delivery" in electronic technology can occur either through a change of possession of a tangible copy or through electronic transfer. For purposes of whether delivery of a performance has occurred, the methodology does not alter the result.

15. "Direct damages." Direct damages are losses associated with a loss of value as to the contracted for performance itself, as contrasted to losses caused by intended uses of the performance or use of the results of the performance by the recipient outside the contract. Direct damages are measured by the damages formulae in this Article, including Section 2B-707(a) which allows the court to determine these damages in any reasonable manner.

The definition rejects cases that treat as direct damages losses that relate to anticipated advantages expected from the use of the information. These are consequential damages. Thus, if software is purchased for $1,000 and, if perfect, would yield profits of $10,000, but it is totally defective, "direct" damages are $1,000.

The definition also includes reliance and restitution damages in an appropriate case. When damages of this type are appropriate is determined by general law. However, to be direct damages, the recoveries must fall within the general concept of direct, as contrasted to consequential or incidental damages.

16. "Electronic." While most modern information systems entail electrical technologies, the term here is open-ended. It encompasses other forms of information processing technology as may be developed in the future.

17. "Electronic agent." This includes a computer program used for the stated purposes, but is not limited to that particular technology. The term recognizes that many aspects of commerce are characterized by automated responses. The agency created here, however, is not equivalent to common law agency concepts since the "agent" is not a human actor, but an automated system. To qualify as an electronic agent, the automated system must have been affirmatively selected, used or programmed for that purpose. This is important because, under other provisions of Article 2B, a party may be bound by the operations of its agent.

18. "Electronic Message." This term parallels the UNCITRAL Model Law on Electronic Commerce. A message is distinguished from the broader term "record" by the fact that it is to be communicated to another. In many systems, communication to another person does not require that the message be transmitted or sent to any new location; the recipient and the person creating the message may share a common E-mail system or other resource and the message can be "stored" for purposes of communicating to another as indicated in the definition.

19. "Financier." This term includes both secured parties and lessors. This Article does not deal with financing informational property rights. That topic is governed under Article 9 and federal or state law pertaining to those rights. The financing arrangements here involve financing of contractual rights.

20. "Good Faith." The definition extends the duty of good faith and fair dealing to consumers. It follows revised Article 3.

21. "Incidental damages." This definition integrates the two definitions of incidental damages found in current Article 2. Incidental damages include costs of seeking or arranging cover or other mitigation, but do not extend to the actual expenditure for the mitigation itself. Thus, if a licensee must obtain a different computer program because of a breach in the contractual delivery, the telephone calls and related expenses in arranging for the cover are incidental damages. The cost of the new program license is considered in computing direct damages.

22. "Information." This definition establishes a broad construction of information. The term, "work of authorship" comes from the Copyright Act and is used here as used in that statute. It includes literary works, computer programs, motion pictures, compilations, and the like. Transactions within Article 2B often involve licensing intellectual property rights as indicated in the definition of "license." In this Article, information is the broad term and in appropriate situations more specific reference is made to particular types of aspects of information, such as computer programs and informational content.

23. "Informational content." This term refers to information whose ordinary use entails communicating the information to a human being. For example, in an electronic database of images the entire information package may include the images and a program enabling display or access to the images. The functional aspects of the program constitute information, but not informational content. The images are informational content. Similarly, when a licensee accesses Westlaw and uses its search program to obtain a case, the program is not informational content, but the text is within the definition.

24. "Information processing system." This definition corresponds to the UNCITRAL Model Law on Electronic Commerce.

25. "Informational property rights." This term includes, but is not limited to "intellectual property" rights. It refers to any law that gives a person a right to control another's use of information independent of contract. The rights referenced here are property rights in the sense of their being established in law with respect to a particular subject matter, but the definition does not require that the rights be comprehensive or exclusive as to all other persons. The term includes the areas of law in which new forms of property are being created by legislatures and courts, but does not of course create any property rights itself. Informational property rights do not include the right to sue for defamation.

26. "License." A license is a limited or conditional transfer of information or rights in information. The limitations must be express in the contract and not merely implied in law. Most transactions involving the acquisition of a copy of a copyrighted work are subject to retained property rights held by the copyright owner, but a license exists only if the limitations (e.g., on use or copying of the work) are express in the contract itself. In an unrestricted sale of a copy, the transferee receives ownership of the copy, but if intellectual property rights apply to the information, is subject to implicit restrictions on use of the information derived from intellectual property law. These implicit restrictions do not constitute a license under Article 2B - they are not express contract restrictions.

The definition does not cover "implied licenses." Under current law, an implied license might arise, for example, if a court holds that, to make the transaction reasonable in light of the parties' expectations, some rights or limitations not express in the contract should be implied. Many such transactions are within this Article because the implied terms are part of an actual license, but if the implied terms are the only limitations on the use of the information, the transaction is not an Article 2B license.

On the other hand, the presence or absence of a license is not affected by whether or not there has been a sale of a copy of a work such as a computer program. A license pertains to rights to use information and, if it involves the tangible copy, that tangible copy is the conduit, not the focus. A license deals with control of the information, while title to the goods deals simply with that - title to the goods.

27. "Licensor" and "Licensee." These terms refer to the transferee and transferor in any contract covered by this article, whether or not the contract is a license.

28. "Mass-market license" and "Mass-market transaction." "Mass market" implements an expansion of protections for consumers into a consumer marketplace standard even though a particular transaction does not involve a consumer licensee. As a new framework, the definition must be applied in light of its intended function. That function is to identify relatively small dollar value, routine or anonymous transactions that occur in a retail market available to the general public. The term includes all consumer transactions and some transactions involving businesses. It does not apply to ordinary commercial transactions that occur in a marketplace characterized primarily by transactions between business entities that deal directly with each other or through ordinary commercial methods of ordering and transferring commercial information.

The definition contemplates a retail marketplace where information is made available in pre-packaged form under generally similar terms to the general public. It applies only to information that is aimed at the general public as a whole, including consumers, and does not cover products directed at a limited subgroup of the general public or to information products restricted to members of an organization or to persons with a separate relationship to the information provider. Where the line will be drawn in determining the size or scope of subgroup that would qualify as a distribution directed to the general public cannot be answered in the abstract, but courts making that judgment should do so in light of the purpose of the definition itself. The intent is that the products covered here do not include specialty software, information directed to specially targeted limited audiences, purely commercial software distributed in non-retail transactions, or professional use software, but to materials that are acquired by consumers or that appeal and intend to appeal to a general public audience as a whole, including consumers, where the identity of the eventual licensee is irrelevant to the licensor.

The prototypical retail market is a department store, grocery store, gas station, shopping center, or the like. These locations are open to, and in fact attract the general public as a whole. They are also characterized by the fact that, while the retail merchants may make sales or other transactions to other businesses, the predominant transaction involves consumers. In a retail market, the vast majority of the transactions also involve relatively small quantities of particular products, non-negotiated contractual terms, and transactions to an end user rather than a purchaser who intends to resell the acquired product. The products are available to anyone who enters the retail location and can pay the applicable price.

The definition contains several exclusion that do not apply to consumer licensees, but to transactions in a retail market where the person acquiring the information is a commercial entity. A transaction for redistribution or a license for public display or performance of a copyrighted work are never mass market transactions because they involve none of the attributes of the retail marketplace. Similarly, where the information product is customized for the licensee and that licensee is not a consumer, the transaction lacks the anonymous, non-negotiated character of the mass market.

The definition adopts a bifurcated treatment of access (Internet) transactions. Consumer transactions here fall within the definition. However, the definition excludes online transactions not involving a consumer. It is especially important in this new transactional environment to not regulate transactions outside the consumer context. This gives the online industry room to develop not subject to unintentional regulations, while preserving consumer protections. It is consistent with the position on non-regulation in the 1997 White House paper on electronic commerce and in positions adopted internationally.

29. "Merchant." This term comes from existing Article 2-104. The definition clarifies that a person that holds itself out as experienced in particular subject matter need not have actually engaged in prior transactions of the type involved to qualify as a merchant.

30. "Non-exclusive license." This is the most common commercial license. It is characterized by the fact that the licensor grants very limited rights and does not foreclose itself from making additional licenses involving the same subject matter and general scope.

31. "Present value." This term corresponds to Article 2A-103.

32. "Published informational content." This definition identifies a sub-category of informational content that has great importance in the information economy. It is the type of information most closely associated with First Amendment and related public policy concerns. This is the material of newspapers, books, motions pictures and the like, which is distributed to the public and intended to communicate knowledge, sounds, or other experiences to a human being, rather than simply to operate a machine. Of course, Article 2B does not apply to this subject matter unless the transaction involves a license or a software contract. As used here, however, the term includes many modern information distribution systems and includes interactive content products since in those products, all of the information is generally available and the end user selects, perhaps interactively, from the available information. This is like the reader of a newspaper focusing on part, but not all of the newspaper.

33. "Receive." This definition, as to performances, corresponds to Article 2-103. As to notices, it updates Section 1-201(26) to reflect issues in electronic commerce and the use of electronic systems to give and receive notice.

34. "Record." This definition broadens the traditional term, "writing", and incorporates electronic records. It does not require permanent storage or anything beyond temporary recordation. The analogy is to the idea of a copy under copyright law. Fixation can be fleeting and perception can be either directly or indirectly with the aid of a machine.

35. "Refund." For purposes of this Article, a refund consists of a reimbursement of fees paid on return of all copies of the information. Whether or when a refund right exists depends on the contract and the provisions of this Article. Refund as defined here is not a remedy for breach or a right of rescission. It is a right that arises when a party refuses a proffered license and has previously committed to, or paid, the contract fee. Making a refund available in such cases is essentially to allow the party presented with the license a true opportunity to accept or reject that license.

A refund must be offered in some cases in order to obtain a manifestation of assent under this article. See Sections 2B-111 and 2B-112. The right to refund expires if the party accepts the license, including by manifesting assent to it. Of course, if a party accepts a license and the information or informational property rights to which it pertains, but the information is defective, the aggrieved party may have a right to restitution of the contract fee as a form of direct damages in an appropriate case.

Refund must be sought within a reasonable time after delivery. If a party fails to seek refund within a reasonable time, it will not be entitled to refund under this Article, but expiration of a refund right does not result in assent to the license. Affirmative agreement or assent is still required for that. What constitutes a reasonable time depends on the facts of the transaction. However, a purchaser cannot wait several years before seeking a refund under this Article.

The definition deals with the difficult problem of administering a refund right in the context of so-called "bundled" products, that is products which include numerous separate information of other products transferred as a unitary whole for a single fee. Where the products are subject to separate licenses, the difficulty arises in administering a refund right where one license is refused. The definition provides that a refund in such situations consists of the entire bundled product in return for the entire price if the refund is sought early. Otherwise, a refund consists of an allocated portion of the overall price as is fairly or contractually attributable to the particular, returned product.

36. "Release." A release is a waiver or permission not accompanied by other commercial attributes, such as an on-going obligation to pay or an obligation to provide the means to implement use of the information.

37. "Scope." This term refers to contract provisions that define an integral part of a license. Scope provisions in a license are equivalent to defining the product. In sales or leases of goods, products are self-defining: an offered car is either a Ford or Chevrolet, it is not necessary to read use and other provisions of a contract to determine that. That is not the case for the information and services industries: In many situations in the information industries, the license and its scope is the product. The same information has entirely different characteristics as a commercial subject matter depending on what scope of rights are granted with reference to that information. For example, a license that allows use of a motion picture in a single theatre is not the same product as a license to distribute the motion picture throughout the United States. Neither license transfers the same product as a license to use a copy of the motion picture for three days in one's home. The license scope provisions define the product.

38. "Send." This definition adapts Article 2-201(38) by providing criteria relevant to electronic notices.

39. "Standard form." The definition refers to forms, not standard terms. See Restatement (Second) of Contracts 211 (referring to but not defining standard forms). A form consists of a group of terms prepared for frequent use as a contract. Use of standard forms in modern commerce is not only widespread, but virtually ubiquitous. The definition does not cover a tailored contract comprised of "terms" selected from many different prior agreements. The record, which is a composite of terms, must itself have been prepared for repeated use. Further, the record must have been so used: if a standard form is offered but then heavily negotiated or changed, the resulting contract is not a standard form contract.

40. "Terminate." This definition conforms to Article 2-106.