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Two states OK e-commerce standards bill

A hotly contested bill that aims at unifying e-commerce standards across the country gains momentum as two states adopt it despite stiff criticism from consumer groups.

A hotly contested bill aimed at unifying e-commerce standards across the country gained some momentum recently as two states adopted it despite stiff criticism from consumer groups.

With the state victories secured, the legal body that drafted the Uniform Computer and Information Transaction Act (UCITA) will push for approval in several other states during the next few months.

The bill would control the licensing of everything from word processing software to stock quotes--a measure some say is sorely needed to update current commercial laws that don't address many Net transactions. But players in the world of e-commerce remain sharply divided over whether the bill is the cure.

"This is something that is so new it predictably has everybody unsettled," said John McCabe, legislative director of the National Conference of Commissioners on Uniform State Laws, the legal body of about 300 law professors, retired judges and attorneys that drafted the bill. "I'm not going to deny this is controversial, because it is. But getting two states to sign on is not bad, actually."

Virginia and Maryland were the states to adopt the bill, and Delaware, Hawaii, Illinois and Oklahoma have introduced it in their legislatures.

Commissioners generally draft model uniform commercial laws that states can either embrace or ignore. The purpose is to come up with a single standard to avoid legal confusion when transactions are made across state lines. But the 350-page UCITA document, passed by the commissioners in July, drew a rash of criticism.

First, the American Law Institute withdrew support of an early version of the law. Then, nearly half of the nation's attorneys general--including those from California, Washington and Connecticut--announced that they firmly opposed the effort.

Consumer groups also have balked at the bill, saying that it introduces radically new rules that would be harmful to Internet commerce.

UCITA is a sweeping measure that would set uniform guidelines for everything from shrink-wrap to license agreements, which software and Net users must acknowledge before they can legally use a product. The statute makes those contracts enforceable even when they limit the rights people are guaranteed under copyright and other laws. It also limits liability for software makers when their products don't perform as promised.

"For the first time, we're addressing contract law in the Internet economy," said Raymond Nimmer, a law professor at the University of Houston Law Center, who helped draft UCITA. "Some groups would have preferred a different outcome with more protections for consumers. But actually, it's a fairly traditional statute, and the way we have drafted it, it doesn't change consumer protection statutes in any state."

Nimmer said that the commissioners will over the next few months lobby those states that have introduced the legislation and then take a break before making another push in the fall.