Consequential Damages Exclusions Under UCITA, 19 J. Marshall J. Computer & Info. L. 295 (2001)

Authors

Douglas E. Phillips

Abstract

The Uniform Computer Information Transactions Act ("UCITA") elicits both love and hate, but decision time is here. Two states have enacted UCITA, several others are considering it, and UCITA choice-of-law clauses are already beginning to appear in software license agreements and other computer information contracts. This article focuses on how UCITA affects a pivotal issue: enforceability of contract clauses that exclude consequential damages. Losses from software development gone awry often far exceed the customer's investment and the developer's return. Under the Uniform Commercial Code, questions remain about the enforceability in certain circumstances of consequential damages exclusions. UCITA answers these questions by providing that such exclusions survive the failure of essential purpose of a limited remedy, so long as the agreement expressly provides that the exclusion is independent of the agreed remedy. Does UCITA's answer honor or depart from U.S. commercial law's longstanding focus on the parties' "bargain in fact" ? Only a close comparison of UCITA with existing law can reveal its true philosophical and practical effects.

Recommended Citation

Douglas E. Phillips, Consequential Damages Exclusions Under UCITA, 19 J. Marshall J. Computer & Info. L. 295 (2001)