(a) In this section, "electronic error" means an error created by an information processing system, by electronic transmission of a record, or by an error of the a consumer in an electronic system that did not reasonably allow for correction or avoidance of such errors.

(b) In an automated transaction for providing information to with a consumer, the consumer is not responsible for an electronic message that that the consumer did not intend and which that was caused by an electronic error if the consumer:

(1) promptly on learning of the other party's reliance on the message, the consumer:

(A) in good faith notifies the other party of the electronic error and that the consumer it did not intend the message received; and

(B) delivers all copies of any information it receivesd to the other party or, delivers or destroys all copies pursuant to any reasonable instructions received from the other party; and

(2) the consumer has not used or received a benefit value from the information or informational property rights or caused the information or benefit value to be made available to a third party.

Prior Uniform Law: None.

Adopted the section. Vote: 10 - 0 (Feb. 1998).

"Copy". Section 2B-102. "Electronic agent". Section 2B-102. "Good Faith": Section 2B-102. "Information". Section 2B-102. "Notify": Section 2B-201. "Party": Section 1-201. "Record". Section 2B-102.

1. Nature of the Issue. Some observers of developing electronic commerce express concern about the capability of errors occurring in the automated systems to impose unexpected losses on persons who are not sophisticated in their operation. In contract creation and performance, common law principles about mistakes provide the basic framework and fundamental principles against which such problems will be resolved. This Section provides a specific application of those principles to establish a major new protection for consumers tailored for automated transactions. The defense to contract formation created here provides a simple method for a consumer to contest errors in his or her transmissions to a third party. Under common law, in many instances, in a unilateral mistake, the party making that error is liable for its consequences. This Section enables a consumer to avoid the consequences of a unilateral mistake by acting promptly to return copies and correct the mistake without receiving value from the other party's reliance on the error.

2. Policy of the Defense. The defense is grounded in equity principles that allow a party to avoid the adverse consequences of its error if the error causes no detrimental effect on another party and does not produce a benefit for the person making the mistake. Of course, there will be unavoidable detrimental effects on the party who receives an erroneous message (e.g., costs of filling, handling and delivering erroneous orders), so courts should apply this rule with care even though the consumer pays the costs of returning the mistakenly ordered product. The basic assumption that there is no detrimental effect on the person who did not cause the error is particularly suspect if manufacturing, production, or other costs are significant. Also, a vendor who fills erroneous orders in a just-in-time inventory system can incur considerable costs for products such as computers or cars; where the product is information, the premise is that the lesser cost of manufacturing justifies the rule.

This section does not create a right to rescind a contract after agreed to performance is received because a consumer changes its mind regarding whether it desires that performance. The section deals solely with errors in the creation of a contract. It is not sufficient to establish the defense that the consumer reconsidered its order. Rather, the standard requires that there was no intent to make the order or, at least, to order under the terms transmitted in error, and that an electronic error be the cause of the problem.

The Section creates an error resolution system, allowing immediate return to place the other party in the position of having to establish that there was no electronic error.

Illustration 1: Consumer intends to order ten copies of a video game from Jones. In fact, the information processing system records 110. The electronic agent maintaining Jones' site disburses 110 copies. The next morning, Consumer notices the mistake. He sends an E-Mail to Jones describing the problem, offering to immediately return or destroy copies; he does not use the games. Under this section, performing on these offers means that there is no presumption that the contract was for 110 copies. If it desires to enforce the apparent contract, Jones must prove that there was no error.

Illustration 2: Same facts, except that Jones' system before shipping sends a confirmation, asking Consumer to confirm that it ordered 110 games. Consumer confirms 110 copies. This section no longer applies. If Consumer sees the confirmation request and does not respond, the section also does not apply. In either case, the system reasonably allowed for correction of the error.