By Turner of Harris H.B. No. 1785
77R3307 DWS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the Uniform Computer Information Transactions Act.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The Business & Commerce Code is amended by adding
1-5 Title 5 to read as follows:
1-6 TITLE 5. UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT
1-7 CHAPTER 101. GENERAL PROVISIONS
1-8 SUBCHAPTER A. SHORT TITLE AND DEFINITIONS
1-9 Sec. 101.01. SHORT TITLE. This title may be cited as the
1-10 Uniform Computer Information Transactions Act.
1-11 Sec. 101.02. DEFINITIONS. (a) In this title:
1-12 (1) "Access contract" means a contract to obtain by
1-13 electronic means access to, or information from, an information
1-14 processing system of another person, or the equivalent of such
1-15 access.
1-16 (2) "Access material" means any information or
1-17 material, such as a document, address, or access code, that is
1-18 necessary to obtain authorized access to information or control or
1-19 possession of a copy.
1-20 (3) "Aggrieved party" means a party entitled to a
1-21 remedy for breach of contract.
1-22 (4) "Agreement" means the bargain of the parties in
1-23 fact as found in their language or by implication from other
1-24 circumstances, including course of performance, course of dealing,
2-1 and usage of trade as provided in this title.
2-2 (5) "Attribution procedure" means a procedure to
2-3 verify that an electronic authentication, display, message, record,
2-4 or performance is that of a particular person or to detect changes
2-5 or errors in information. The term includes a procedure that
2-6 requires the use of algorithms or other codes, identifying words or
2-7 numbers, encryption, or callback or other acknowledgment.
2-8 (6) "Authenticate" means:
2-9 (A) to sign; or
2-10 (B) with the intent to sign a record, otherwise
2-11 to execute or adopt an electronic symbol, sound, message, or
2-12 process referring to, attached to, included in, or logically
2-13 associated or linked with, that record.
2-14 (7) "Automated transaction" means a transaction in
2-15 which a contract is formed in whole or part by electronic actions
2-16 of one or both parties which are not previously reviewed by an
2-17 individual in the ordinary course.
2-18 (8) "Cancellation" means the ending of a contract by a
2-19 party because of breach of contract by another party.
2-20 (9) "Computer" means an electronic device that accepts
2-21 information in digital or similar form and manipulates it for a
2-22 result based on a sequence of instructions.
2-23 (10) "Computer information" means information in
2-24 electronic form which is obtained from or through the use of a
2-25 computer or which is in a form capable of being processed by a
2-26 computer. The term includes a copy of the information and any
2-27 documentation or packaging associated with the copy.
3-1 (11) "Computer information transaction" means an
3-2 agreement or the performance of it to create, modify, transfer, or
3-3 license computer information or informational rights in computer
3-4 information. The term includes a support contract under Section
3-5 106.12. The term does not include a transaction merely because the
3-6 parties' agreement provides that their communications about the
3-7 transaction will be in the form of computer information.
3-8 (12) "Computer program" means a set of statements or
3-9 instructions to be used directly or indirectly in a computer to
3-10 bring about a certain result. The term does not include separately
3-11 identifiable informational content.
3-12 (13) "Consequential damages" resulting from breach of
3-13 contract includes (i) any loss resulting from general or particular
3-14 requirements and needs of which the breaching party at the time of
3-15 contracting had reason to know and which could not reasonably be
3-16 prevented and (ii) any injury to an individual or damage to
3-17 property other than the subject matter of the transaction
3-18 proximately resulting from breach of warranty. The term does not
3-19 include direct damages or incidental damages.
3-20 (14) "Conspicuous," with reference to a term, means so
3-21 written, displayed, or presented that a reasonable person against
3-22 which it is to operate ought to have noticed it. A term in an
3-23 electronic record intended to evoke a response by an electronic
3-24 agent is conspicuous if it is presented in a form that would enable
3-25 a reasonably configured electronic agent to take it into account or
3-26 react to it without review of the record by an individual.
3-27 Conspicuous terms include the following:
4-1 (A) with respect to a person:
4-2 (i) a heading in capitals in a size equal
4-3 to or greater than, or in contrasting type, font, or color to, the
4-4 surrounding text;
4-5 (ii) language in the body of a record or
4-6 display in larger or other contrasting type, font, or color or set
4-7 off from the surrounding text by symbols or other marks that draw
4-8 attention to the language; and
4-9 (iii) a term prominently referenced in an
4-10 electronic record or display which is readily accessible or
4-11 reviewable from the record or display; and
4-12 (B) with respect to a person or an electronic
4-13 agent, a term or reference to a term that is so placed in a record
4-14 or display that the person or electronic agent cannot proceed
4-15 without taking action with respect to the particular term or
4-16 reference.
4-17 (15) "Consumer" means an individual who is a licensee
4-18 of information or informational rights that the individual at the
4-19 time of contracting intended to be used primarily for personal,
4-20 family, or household purposes. The term does not include an
4-21 individual who is a licensee primarily for professional or
4-22 commercial purposes, including agriculture, business management,
4-23 and investment management other than management of the individual's
4-24 personal or family investments.
4-25 (16) "Consumer contract" means a contract between a
4-26 merchant licensor and a consumer.
4-27 (17) "Contract" means the total legal obligation
5-1 resulting from the parties' agreement as affected by this title and
5-2 other applicable law.
5-3 (18) "Contract fee" means the price, fee, rent, or
5-4 royalty payable in a contract under this title or any part of the
5-5 amount payable.
5-6 (19) "Contractual use term" means an enforceable term
5-7 that defines or limits the use of, disclosure of, or access to
5-8 licensed information or informational rights, including a term that
5-9 defines the scope of a license.
5-10 (20) "Copy" means the medium on which information is
5-11 fixed on a temporary or permanent basis and from which it can be
5-12 perceived, reproduced, used, or communicated, either directly or
5-13 with the aid of a machine or device.
5-14 (21) "Course of dealing" means a sequence of previous
5-15 conduct between the parties to a particular transaction which
5-16 establishes a common basis of understanding for interpreting their
5-17 expressions and other conduct.
5-18 (22) "Course of performance" means repeated
5-19 performances, under a contract that involves repeated occasions for
5-20 performance, which are accepted or acquiesced in without objection
5-21 by a party having knowledge of the nature of the performance and an
5-22 opportunity to object to it.
5-23 (23) "Court" includes an arbitration or other
5-24 dispute-resolution forum if the parties have agreed to use of that
5-25 forum or its use is required by law.
5-26 (24) "Delivery," with respect to a copy, means the
5-27 voluntary physical or electronic transfer of possession or control.
6-1 (25) "Direct damages" means compensation for losses
6-2 measured by Section 108.08(b)(1) or 108.09(a)(1). The term does
6-3 not include consequential damages or incidental damages.
6-4 (26) "Electronic" means relating to technology having
6-5 electrical, digital, magnetic, wireless, optical, electromagnetic,
6-6 or similar capabilities.
6-7 (27) "Electronic agent" means a computer program, or
6-8 electronic or other automated means, used independently to initiate
6-9 an action, or to respond to electronic messages or performances, on
6-10 the person's behalf without review or action by an individual at
6-11 the time of the action or response to the message or performance.
6-12 (28) "Electronic message" means a record or display
6-13 that is stored, generated, or transmitted by electronic means for
6-14 the purpose of communication to another person or electronic agent.
6-15 (29) "Financial accommodation contract" means an
6-16 agreement under which a person extends a financial accommodation to
6-17 a licensee and which does not create a security interest governed
6-18 by Chapter 9. The agreement may be in any form, including a
6-19 license or lease.
6-20 (30) "Financial services transaction" means an
6-21 agreement that provides for, or a transaction that is, or entails
6-22 access to, use, transfer, clearance, settlement, or processing of:
6-23 (A) a deposit, loan, funds, or monetary value
6-24 represented in electronic form and stored or capable of storage by
6-25 electronic means and retrievable and transferable by electronic
6-26 means, or other right to payment to or from a person;
6-27 (B) an instrument or other item;
7-1 (C) a payment order, credit card transaction,
7-2 debit card transaction, funds transfer, automated clearinghouse
7-3 transfer, or similar wholesale or retail transfer of funds;
7-4 (D) a letter of credit, document of title,
7-5 financial asset, investment property, or similar asset held in a
7-6 fiduciary or agency capacity; or
7-7 (E) related identifying, verifying,
7-8 access-enabling, authorizing, or monitoring information.
7-9 (31) "Financier" means a person that provides a
7-10 financial accommodation to a licensee under a financial
7-11 accommodation contract and either (i) becomes a licensee for the
7-12 purpose of transferring or sublicensing the license to the party to
7-13 which the financial accommodation is provided or (ii) obtains a
7-14 contractual right under the financial accommodation contract to
7-15 preclude the licensee's use of the information or informational
7-16 rights under a license in the event of breach of the financial
7-17 accommodation contract. The term does not include a person that
7-18 selects, creates, or supplies the information that is the subject
7-19 of the license, owns the informational rights in the information,
7-20 or provides support for, modifications to, or maintenance of the
7-21 information.
7-22 (32) "Good faith" means honesty in fact and the
7-23 observance of reasonable commercial standards of fair dealing.
7-24 (33) "Goods" means all things that are movable at the
7-25 time relevant to the computer information transaction. The term
7-26 includes the unborn young of animals, growing crops, and other
7-27 identified things to be severed from realty which are covered by
8-1 Section 2.107. The term does not include computer information,
8-2 money, the subject matter of foreign exchange transactions,
8-3 documents, letters of credit, letter-of-credit rights, instruments,
8-4 investment property, accounts, chattel paper, deposit accounts, or
8-5 general intangibles.
8-6 (34) "Incidental damages" resulting from breach of
8-7 contract:
8-8 (A) means compensation for any commercially
8-9 reasonable charges, expenses, or commissions reasonably incurred by
8-10 an aggrieved party with respect to:
8-11 (i) inspection, receipt, transmission,
8-12 transportation, care, or custody of identified copies or
8-13 information that is the subject of the breach;
8-14 (ii) stopping delivery, shipment, or
8-15 transmission;
8-16 (iii) effecting cover or retransfer of
8-17 copies or information after the breach;
8-18 (iv) other efforts after the breach to
8-19 minimize or avoid loss resulting from the breach; and
8-20 (v) matters otherwise incident to the
8-21 breach; and
8-22 (B) does not include consequential damages or
8-23 direct damages.
8-24 (35) "Information" means data, text, images, sounds,
8-25 mask works, or computer programs, including collections and
8-26 compilations of them.
8-27 (36) "Information processing system" means an
9-1 electronic system for creating, generating, sending, receiving,
9-2 storing, displaying, or processing information.
9-3 (37) "Informational content" means information that is
9-4 intended to be communicated to or perceived by an individual in the
9-5 ordinary use of the information, or the equivalent of that
9-6 information.
9-7 (38) "Informational rights" includes all rights in
9-8 information created under laws governing patents, copyrights, mask
9-9 works, trade secrets, trademarks, publicity rights, or any other
9-10 law that gives a person, independently of contract, a right to
9-11 control or preclude another person's use of or access to the
9-12 information on the basis of the rights holder's interest in the
9-13 information.
9-14 (39) "Insurance services transaction" means an
9-15 agreement between an insurer and an insured which provides for, or
9-16 a transaction that is, or entails access to, use, transfer,
9-17 clearance, settlement, or processing of:
9-18 (A) an insurance policy, contract, or
9-19 certificate; or
9-20 (B) a right to payment under an insurance
9-21 policy, contract, or certificate.
9-22 (40) "Knowledge," with respect to a fact, means actual
9-23 knowledge of the fact.
9-24 (41) "License" means a contract that authorizes access
9-25 to, or use, distribution, performance, modification, or
9-26 reproduction of, information or informational rights, but that
9-27 expressly limits the access or uses authorized or expressly grants
10-1 fewer than all rights in the information, whether or not the
10-2 transferee has title to a licensed copy. The term includes an
10-3 access contract, a lease of a computer program, and a consignment
10-4 of a copy. The term does not include a reservation or creation of
10-5 a security interest to the extent the interest is governed by
10-6 Chapter 9.
10-7 (42) "Licensee" means a person entitled by agreement
10-8 to acquire or exercise rights in, or to have access to or use of,
10-9 computer information under an agreement to which this title
10-10 applies. A licensor is not a licensee with respect to rights
10-11 reserved to it under the agreement.
10-12 (43) "Licensor" means a person obligated by agreement
10-13 to transfer or create rights in, or to give access to or use of,
10-14 computer information or informational rights in it under an
10-15 agreement to which this title applies. Between the provider of
10-16 access and a provider of the informational content to be accessed,
10-17 the provider of content is the licensor. In an exchange of
10-18 information or informational rights, each party is a licensor with
10-19 respect to the information, informational rights, or access it
10-20 gives.
10-21 (44) "Mass-market license" means a standard form used
10-22 in a mass-market transaction.
10-23 (45) "Mass-market transaction" means a transaction
10-24 that is:
10-25 (A) a consumer contract; or
10-26 (B) any other transaction with an end-user
10-27 licensee if:
11-1 (i) the transaction is for information or
11-2 informational rights directed to the general public as a whole,
11-3 including consumers, under substantially the same terms for the
11-4 same information;
11-5 (ii) the licensee acquires the information
11-6 or informational rights in a retail transaction under terms and in
11-7 a quantity consistent with an ordinary transaction in a retail
11-8 market; and
11-9 (iii) the transaction is not:
11-10 (I) a contract for redistribution or
11-11 for public performance or public display of a copyrighted work;
11-12 (II) a transaction in which the
11-13 information is customized or otherwise specially prepared by the
11-14 licensor for the licensee, other than minor customization using a
11-15 capability of the information intended for that purpose;
11-16 (III) a site license; or
11-17 (IV) an access contract.
11-18 (46) "Merchant" means a person:
11-19 (A) that deals in information or informational
11-20 rights of the kind involved in the transaction;
11-21 (B) that by the person's occupation holds itself
11-22 out as having knowledge or skill peculiar to the relevant aspect of
11-23 the business practices or information involved in the transaction;
11-24 or
11-25 (C) to which the knowledge or skill peculiar to
11-26 the practices or information involved in the transaction may be
11-27 attributed by the person's employment of an agent or broker or
12-1 other intermediary that by its occupation holds itself out as
12-2 having the knowledge or skill.
12-3 (47) "Nonexclusive license" means a license that does
12-4 not preclude the licensor from transferring to other licensees the
12-5 same information, informational rights, or contractual rights
12-6 within the same scope. The term includes a consignment of a copy.
12-7 (48) "Notice" of a fact means knowledge of the fact,
12-8 receipt of notification of the fact, or reason to know the fact
12-9 exists.
12-10 (49) "Notify," or "give notice," means to take such
12-11 steps as may be reasonably required to inform the other person in
12-12 the ordinary course, whether or not the other person actually comes
12-13 to know of it.
12-14 (50) "Party" means a person that engages in a
12-15 transaction or makes an agreement under this title.
12-16 (51) "Person" means an individual, corporation,
12-17 business trust, estate, trust, partnership, limited liability
12-18 company, association, joint venture, governmental subdivision,
12-19 instrumentality, or agency, public corporation, or any other legal
12-20 or commercial entity.
12-21 (52) "Published informational content" means
12-22 informational content prepared for or made available to recipients
12-23 generally, or to a class of recipients, in substantially the same
12-24 form. The term does not include informational content that is:
12-25 (A) customized for a particular recipient by one
12-26 or more individuals acting as or on behalf of the licensor, using
12-27 judgment or expertise; or
13-1 (B) provided in a special relationship of
13-2 reliance between the provider and the recipient.
13-3 (53) "Receipt" means:
13-4 (A) with respect to a copy, taking delivery; or
13-5 (B) with respect to a notice:
13-6 (i) coming to a person's attention; or
13-7 (ii) being delivered to and available at a
13-8 location or system designated by agreement for that purpose or, in
13-9 the absence of an agreed location or system:
13-10 (I) being delivered at the person's
13-11 residence, or the person's place of business through which the
13-12 contract was made, or at any other place held out by the person as
13-13 a place for receipt of communications of the kind; or
13-14 (II) in the case of an electronic
13-15 notice, coming into existence in an information processing system
13-16 or at an address in that system in a form capable of being
13-17 processed by or perceived from a system of that type by a
13-18 recipient, if the recipient uses, or otherwise has designated or
13-19 holds out, that place or system for receipt of notices of the kind
13-20 to be given and the sender does not know that the notice cannot be
13-21 accessed from that place.
13-22 (54) "Receive" means to take receipt.
13-23 (55) "Record" means information that is inscribed on a
13-24 tangible medium or that is stored in an electronic or other medium
13-25 and is retrievable in perceivable form.
13-26 (56) "Release" means an agreement by a party not to
13-27 object to, or exercise any rights or pursue any remedies to limit,
14-1 the use of information or informational rights which agreement does
14-2 not require an affirmative act by the party to enable or support
14-3 the other party's use of the information or informational rights.
14-4 The term includes a waiver of informational rights.
14-5 (57) "Return," with respect to a record containing
14-6 contractual terms that were rejected, refers only to the computer
14-7 information and means:
14-8 (A) in the case of a licensee that rejects a
14-9 record regarding a single information product transferred for a
14-10 single contract fee, a right to reimbursement of the contract fee
14-11 paid from the person to which it was paid or from another person
14-12 that offers to reimburse that fee, on:
14-13 (i) submission of proof of purchase; and
14-14 (ii) proper redelivery of the computer
14-15 information and all copies within a reasonable time after initial
14-16 delivery of the information to the licensee;
14-17 (B) in the case of a licensee that rejects a
14-18 record regarding an information product provided as part of
14-19 multiple information products integrated into and transferred as a
14-20 bundled whole but retaining their separate identity:
14-21 (i) a right to reimbursement of any
14-22 portion of the aggregate contract fee identified by the licensor in
14-23 the initial transaction as charged to the licensee for all bundled
14-24 information products which was actually paid, on:
14-25 (I) rejection of the record before
14-26 or during the initial use of the bundled product;
14-27 (II) proper redelivery of all
15-1 computer information products in the bundled whole and all copies
15-2 of them within a reasonable time after initial delivery of the
15-3 information to the licensee; and
15-4 (III) submission of proof of
15-5 purchase; or
15-6 (ii) a right to reimbursement of any
15-7 separate contract fee identified by the licensor in the initial
15-8 transaction as charged to the licensee for the separate information
15-9 product to which the rejected record applies, on:
15-10 (I) submission of proof of purchase;
15-11 and
15-12 (II) proper redelivery of that
15-13 computer information product and all copies within a reasonable
15-14 time after initial delivery of the information to the licensee; or
15-15 (C) in the case of a licensor that rejects a
15-16 record proposed by the licensee, a right to proper redelivery of
15-17 the computer information and all copies from the licensee, to stop
15-18 delivery or access to the information by the licensee, and to
15-19 reimbursement from the licensee of amounts paid by the licensor
15-20 with respect to the rejected record, on reimbursement to the
15-21 licensee of contract fees that it paid with respect to the rejected
15-22 record, subject to recoupment and setoff.
15-23 (58) "Scope," with respect to terms of a license,
15-24 means:
15-25 (A) the licensed copies, information, or
15-26 informational rights involved;
15-27 (B) the use or access authorized, prohibited, or
16-1 controlled;
16-2 (C) the geographic area, market, or location; or
16-3 (D) the duration of the license.
16-4 (59) "Seasonable," with respect to an act, means taken
16-5 within the time agreed or, if no time is agreed, within a
16-6 reasonable time.
16-7 (60) "Send" means, with any costs provided for and
16-8 properly addressed or directed as reasonable under the
16-9 circumstances or as otherwise agreed, to deposit a record in the
16-10 mail or with a commercially reasonable carrier, to deliver a record
16-11 for transmission to or re-creation in another location or
16-12 information processing system, or to take the steps necessary to
16-13 initiate transmission to or re-creation of a record in another
16-14 location or information processing system. In addition, with
16-15 respect to an electronic message, the message must be in a form
16-16 capable of being processed by or perceived from a system of the
16-17 type the recipient uses or otherwise has designated or held out as
16-18 a place for the receipt of communications of the kind sent.
16-19 Receipt within the time in which it would have arrived if properly
16-20 sent has the effect of a proper sending.
16-21 (61) "Standard form" means a record or a group of
16-22 related records containing terms prepared for repeated use in
16-23 transactions and so used in a transaction in which there was no
16-24 negotiated change of terms by individuals except to set the price,
16-25 quantity, method of payment, selection among standard options, or
16-26 time or method of delivery.
16-27 (62) "State" means a state of the United States, the
17-1 District of Columbia, Puerto Rico, the United States Virgin
17-2 Islands, or any territory or insular possession subject to the
17-3 jurisdiction of the United States.
17-4 (63) "Term," with respect to an agreement, means that
17-5 portion of the agreement which relates to a particular matter.
17-6 (64) "Termination" means the ending of a contract by a
17-7 party pursuant to a power created by agreement or law otherwise
17-8 than because of breach of contract.
17-9 (65) "Transfer":
17-10 (A) with respect to a contractual interest,
17-11 includes an assignment of the contract, but does not include an
17-12 agreement merely to perform a contractual obligation or to exercise
17-13 contractual rights through a delegate or sublicensee; and
17-14 (B) with respect to computer information,
17-15 includes a sale, license, or lease of a copy of the computer
17-16 information and a license or assignment of informational rights in
17-17 computer information.
17-18 (66) "Usage of trade" means any practice or method of
17-19 dealing that has such regularity of observance in a place,
17-20 vocation, or trade as to justify an expectation that it will be
17-21 observed with respect to the transaction in question.
17-22 (b) The following definitions apply to this title:
17-23 (1) "Burden of establishing" (Section 1.201);
17-24 (2) "Document of title" (Section 1.201);
17-25 (3) "Financial asset" (Section 8.102);
17-26 (4) "Funds transfer" (Section 4A.104);
17-27 (5) "Identification" to the contract (Section 2.501);
18-1 (6) "Instrument" (Section 9.105);
18-2 (7) "Investment property" (Section 9.115);
18-3 (8) "Item" (Section 4.104);
18-4 (9) "Letter of credit" (Section 5.102);
18-5 (10) "Payment order" (Section 4A.103); and
18-6 (11) "Sale" (Section 2.106).
18-7 SUBCHAPTER B. GENERAL SCOPE AND TERMS
18-8 Sec. 101.03. SCOPE; EXCLUSIONS. (a) This title applies to
18-9 computer information transactions.
18-10 (b) Except for subject matter excluded in Subsection (d) and
18-11 as otherwise provided in Section 101.04, if a computer information
18-12 transaction includes subject matter other than computer information
18-13 or subject matter excluded under Subsection (d), the following
18-14 rules apply:
18-15 (1) If a transaction includes computer information and
18-16 goods, this title applies to the part of the transaction involving
18-17 computer information, informational rights in it, and creation or
18-18 modification of it. However, if a copy of a computer program is
18-19 contained in and sold or leased as part of goods, this title
18-20 applies to the copy and the computer program only if:
18-21 (A) the goods are a computer or computer
18-22 peripheral; or
18-23 (B) giving the buyer or lessee of the goods
18-24 access to or use of the program is ordinarily a material purpose of
18-25 transactions in goods of the type sold or leased.
18-26 (2) Subject to Subsection (d)(3)(A), if a transaction
18-27 includes an agreement for creating, or for obtaining rights to
19-1 create, computer information and a motion picture, this title does
19-2 not apply to the agreement if the dominant character of the
19-3 agreement is to create or obtain rights to create a motion picture.
19-4 In all other such agreements, this title does not apply to the part
19-5 of the agreement that involves a motion picture excluded under
19-6 Subsection (d)(3), but does apply to the computer information.
19-7 (3) In all other cases, this title applies to the
19-8 entire transaction if the computer information and informational
19-9 rights, or access to them, is the primary subject matter, but
19-10 otherwise applies only to the part of the transaction involving
19-11 computer information, informational rights in it, and creation or
19-12 modification of it.
19-13 (c) To the extent of a conflict between this title and
19-14 Chapter 9, Chapter 9 governs.
19-15 (d) This title does not apply to:
19-16 (1) a financial services transaction;
19-17 (2) an insurance services transaction;
19-18 (3) an agreement to create, perform or perform in,
19-19 include information in, acquire, use, distribute, modify,
19-20 reproduce, have access to, adapt, make available, transmit,
19-21 license, or display:
19-22 (A) a motion picture or audio or visual
19-23 programming, other than in (i) a mass-market transaction or (ii) a
19-24 submission of an idea or information or release of informational
19-25 rights that may result in making a motion picture or similar
19-26 information product; or
19-27 (B) a sound recording, musical work, or
20-1 phonorecord as defined or used in Title 17 of the United States
20-2 Code as of July 1, 1999, or an enhanced sound recording, other than
20-3 in the submission of an idea or information or release of
20-4 informational rights that may result in the creation of such
20-5 material or a similar information product;
20-6 (4) a compulsory license;
20-7 (5) a contract of employment of an individual, other
20-8 than an individual hired as an independent contractor to create or
20-9 modify computer information, unless the independent contractor is a
20-10 freelancer in the news reporting industry as that term is commonly
20-11 understood in that industry;
20-12 (6) a contract that does not require that information
20-13 be furnished as computer information or a contract in which, under
20-14 the agreement, the form of the information as computer information
20-15 is otherwise insignificant with respect to the primary subject
20-16 matter of the part of the transaction pertaining to the
20-17 information;
20-18 (7) unless otherwise agreed between the parties in a
20-19 record:
20-20 (A) telecommunications products or services
20-21 provided pursuant to federal or state tariffs; or
20-22 (B) telecommunications products or services
20-23 provided pursuant to agreements required or permitted to be filed
20-24 by the service provider with a federal or state authority
20-25 regulating those services or under pricing subject to approval by a
20-26 federal or state regulatory authority; or
20-27 (8) subject matter within the scope of Chapter 3, 4,
21-1 4A, 5, 7, or 8.
21-2 (e) As used in Subsection (d)(3)(B), "enhanced sound
21-3 recording" means a separately identifiable product or service the
21-4 dominant character of which consists of recorded sounds, but which
21-5 includes (i) statements or instructions whose purpose is to allow
21-6 or control the perception, reproduction, or communication of those
21-7 sounds or (ii) other information, as long as recorded sounds
21-8 constitute the dominant character of the product or service.
21-9 (f) In this section:
21-10 (1) "Audio or visual programming" means audio or
21-11 visual programming that is provided by broadcast, satellite, or
21-12 cable, as defined or used in the Communications Act of 1934 (47
21-13 U.S.C. Section 151 et seq.) and related regulations as they existed
21-14 on July 1, 1999, or by similar methods of delivery.
21-15 (2) "Motion picture" means:
21-16 (A) "motion picture" as defined in Title 17 of
21-17 the United States Code as of July 1, 1999; or
21-18 (B) a separately identifiable product or service
21-19 the dominant character of which consists of a linear motion
21-20 picture, but which includes (i) statements or instructions whose
21-21 purpose is to allow or control the perception, reproduction, or
21-22 communication of the motion picture or (ii) other information, as
21-23 long as the motion picture constitutes the dominant character of
21-24 the product or service.
21-25 Sec. 101.04. MIXED TRANSACTIONS: AGREEMENT TO OPT-IN OR
21-26 OPT-OUT. The parties may agree that this title, including
21-27 contract-formation rules, governs the transaction, in whole or
22-1 part, or that other law governs the transaction and this title does
22-2 not apply, if a material part of the subject matter to which the
22-3 agreement applies is computer information or informational rights
22-4 in it that are within the scope of this title, or is subject matter
22-5 within this title under Section 101.03(b), or is subject matter
22-6 excluded by Section 101.03(d)(1) or (3). However, any agreement to
22-7 do so is subject to the following rules:
22-8 (1) An agreement that this title governs a transaction
22-9 does not alter the applicability of any statute, rule, or procedure
22-10 that may not be varied by agreement of the parties or that may be
22-11 varied only in a manner specified by the statute, rule, or
22-12 procedure, including a consumer protection statute or rule. In
22-13 addition, in a mass-market transaction, the agreement does not
22-14 alter the applicability of a law applicable to a copy of
22-15 information in printed form.
22-16 (2) An agreement that this title does not govern a
22-17 transaction:
22-18 (A) does not alter the applicability of Section
22-19 102.14 or 108.16; and
22-20 (B) in a mass-market transaction, does not alter
22-21 the applicability under this title of the doctrine of
22-22 unconscionability or fundamental public policy or the obligation of
22-23 good faith.
22-24 (3) In a mass-market transaction, any term under this
22-25 section which changes the extent to which this title governs the
22-26 transaction must be conspicuous.
22-27 (4) A copy of a computer program contained in and sold
23-1 or leased as part of goods and which is excluded from this title by
23-2 Section 101.03(b)(1) cannot provide the basis for an agreement
23-3 under this section that this title governs the transaction.
23-4 Sec. 101.05. RELATION TO FEDERAL LAW; FUNDAMENTAL PUBLIC
23-5 POLICY; TRANSACTIONS SUBJECT TO OTHER STATE LAW. (a) A provision
23-6 of this title which is preempted by federal law is unenforceable to
23-7 the extent of the preemption.
23-8 (b) If a term of a contract violates a fundamental public
23-9 policy, the court may refuse to enforce the contract, enforce the
23-10 remainder of the contract without the impermissible term, or limit
23-11 the application of the impermissible term so as to avoid a result
23-12 contrary to public policy, in each case to the extent that the
23-13 interest in enforcement is clearly outweighed by a public policy
23-14 against enforcement of the term.
23-15 (c) Except as otherwise provided in Subsection (d), if this
23-16 title or a term of a contract under this title conflicts with a
23-17 consumer protection statute or rule, the consumer protection
23-18 statute or rule governs.
23-19 (d) If a law of this state in effect on the effective date
23-20 of this title applies to a transaction governed by this title, the
23-21 following rules apply:
23-22 (1) A requirement that a term, waiver, notice, or
23-23 disclaimer be in a writing is satisfied by a record.
23-24 (2) A requirement that a record, writing, or term be
23-25 signed is satisfied by an authentication.
23-26 (3) A requirement that a term be conspicuous, or the
23-27 like, is satisfied by a term that is conspicuous under this title.
24-1 (4) A requirement of consent or agreement to a term is
24-2 satisfied by a manifestation of assent to the term in accordance
24-3 with this title.
24-4 (e) In the case of a conflict between this title and other
24-5 law establishing a digital signature or similar form of attribution
24-6 procedure, the other law prevails.
24-7 Sec. 101.06. RULES OF CONSTRUCTION. (a) This title must be
24-8 liberally construed and applied to promote its underlying purposes
24-9 and policies to:
24-10 (1) support and facilitate the realization of the full
24-11 potential of computer information transactions;
24-12 (2) clarify the law governing computer information
24-13 transactions;
24-14 (3) enable expanding commercial practice in computer
24-15 information transactions by commercial usage and agreement of the
24-16 parties;
24-17 (4) promote uniformity of the law with respect to the
24-18 subject matter of this title among states that enact it; and
24-19 (5) permit the continued expansion of commercial
24-20 practices in the excluded transactions through custom, usage, and
24-21 agreement of the parties.
24-22 (b) Except as otherwise provided in Section 101.13(a), the
24-23 use of mandatory language or the absence of a phrase such as
24-24 "unless otherwise agreed" in a provision of this title does not
24-25 preclude the parties from varying the effect of the provision by
24-26 agreement.
24-27 (c) The fact that a provision of this title imposes a
25-1 condition for a result does not by itself mean that the absence of
25-2 that condition yields a different result.
25-3 (d) To be enforceable, a term need not be conspicuous,
25-4 negotiated, or expressly assented or agreed to, unless this title
25-5 expressly so requires.
25-6 Sec. 101.07. LEGAL RECOGNITION OF ELECTRONIC RECORD AND
25-7 AUTHENTICATION; USE OF ELECTRONIC AGENTS. (a) A record or
25-8 authentication may not be denied legal effect or enforceability
25-9 solely because it is in electronic form.
25-10 (b) This title does not require that a record or
25-11 authentication be generated, stored, sent, received, or otherwise
25-12 processed by electronic means or in electronic form.
25-13 (c) In any transaction, a person may establish requirements
25-14 regarding the type of authentication or record acceptable to it.
25-15 (d) A person that uses an electronic agent that it has
25-16 selected for making an authentication, performance, or agreement,
25-17 including manifestation of assent, is bound by the operations of
25-18 the electronic agent, even if no individual was aware of or
25-19 reviewed the agent's operations or the results of the operations.
25-20 Sec. 101.08. PROOF AND EFFECT OF AUTHENTICATION. (a)
25-21 Authentication may be proven in any manner, including a showing
25-22 that a party made use of information or access that could have been
25-23 available only if it engaged in conduct or operations that
25-24 authenticated the record or term.
25-25 (b) Compliance with a commercially reasonable attribution
25-26 procedure agreed to or adopted by the parties or established by law
25-27 for authenticating a record authenticates the record as a matter of
26-1 law.
26-2 Sec. 101.09. CHOICE OF LAW. (a) The parties in their
26-3 agreement may choose the applicable law. However, the choice is
26-4 not enforceable in a consumer contract to the extent it would vary
26-5 a rule that may not be varied by agreement under the law of the
26-6 jurisdiction whose law would apply under Subsections (b) and (c) in
26-7 the absence of the agreement.
26-8 (b) In the absence of an enforceable agreement on choice of
26-9 law, the following rules determine which jurisdiction's law governs
26-10 in all respects for purposes of contract law:
26-11 (1) An access contract or a contract providing for
26-12 electronic delivery of a copy is governed by the law of the
26-13 jurisdiction in which the licensor was located when the agreement
26-14 was entered into.
26-15 (2) A consumer contract that requires delivery of a
26-16 copy on a tangible medium is governed by the law of the
26-17 jurisdiction in which the copy is or should have been delivered to
26-18 the consumer.
26-19 (3) In all other cases, the contract is governed by
26-20 the law of the jurisdiction having the most significant
26-21 relationship to the transaction.
26-22 (c) In cases governed by Subsection (b), if the jurisdiction
26-23 whose law governs is outside the United States, the law of that
26-24 jurisdiction governs only if it provides substantially similar
26-25 protections and rights to a party not located in that jurisdiction
26-26 as are provided under this title. Otherwise, the law of the state
26-27 that has the most significant relationship to the transaction
27-1 governs.
27-2 (d) For purposes of this section, a party is located at its
27-3 place of business if it has one place of business, at its chief
27-4 executive office if it has more than one place of business, or at
27-5 its place of incorporation or primary registration if it does not
27-6 have a physical place of business. Otherwise, a party is located
27-7 at its primary residence.
27-8 Sec. 101.10. CONTRACTUAL CHOICE OF FORUM. (a) The parties
27-9 in their agreement may choose an exclusive judicial forum unless
27-10 the choice is unreasonable and unjust.
27-11 (b) A judicial forum specified in an agreement is not
27-12 exclusive unless the agreement expressly so provides.
27-13 Sec. 101.11. UNCONSCIONABLE CONTRACT OR TERM. (a) If a
27-14 court as a matter of law finds a contract or a term thereof to have
27-15 been unconscionable at the time it was made, the court may refuse
27-16 to enforce the contract, enforce the remainder of the contract
27-17 without the unconscionable term, or limit the application of the
27-18 unconscionable term so as to avoid an unconscionable result.
27-19 (b) If it is claimed or appears to the court that a contract
27-20 or term thereof may be unconscionable, the parties must be afforded
27-21 a reasonable opportunity to present evidence as to its commercial
27-22 setting, purpose, and effect to aid the court in making the
27-23 determination.
27-24 Sec. 101.12. MANIFESTING ASSENT; OPPORTUNITY TO REVIEW. (a)
27-25 A person manifests assent to a record or term if the person, acting
27-26 with knowledge of, or after having an opportunity to review the
27-27 record or term or a copy of it:
28-1 (1) authenticates the record or term with intent to
28-2 adopt or accept it; or
28-3 (2) intentionally engages in conduct or makes
28-4 statements with reason to know that the other party or its
28-5 electronic agent may infer from the conduct or statement that the
28-6 person assents to the record or term.
28-7 (b) An electronic agent manifests assent to a record or term
28-8 if, after having an opportunity to review it, the electronic agent:
28-9 (1) authenticates the record or term; or
28-10 (2) engages in operations that in the circumstances
28-11 indicate acceptance of the record or term.
28-12 (c) If this title or other law requires assent to a specific
28-13 term, a manifestation of assent must relate specifically to the
28-14 term.
28-15 (d) Conduct or operations manifesting assent may be proved
28-16 in any manner, including a showing that a person or an electronic
28-17 agent obtained or used the information or informational rights and
28-18 that a procedure existed by which a person or an electronic agent
28-19 must have engaged in the conduct or operations in order to do so.
28-20 Proof of compliance with Subsection (a)(2) is sufficient if there
28-21 is conduct that assents and subsequent conduct that reaffirms
28-22 assent by electronic means.
28-23 (e) With respect to an opportunity to review, the following
28-24 rules apply:
28-25 (1) A person has an opportunity to review a record or
28-26 term only if the record or term is made available in a manner that
28-27 ought to call it to the attention of a reasonable person and permit
29-1 review.
29-2 (2) An electronic agent has an opportunity to review a
29-3 record or term only if the record or term is made available in a
29-4 manner that would enable a reasonably configured electronic agent
29-5 to react to the record or term.
29-6 (3) If a record or term is available for review only
29-7 after a person becomes obligated to pay or begins its performance,
29-8 the person has an opportunity to review only if it has a right to a
29-9 return if it rejects the record. However, a right to a return is
29-10 not required if:
29-11 (A) the record proposes a modification of
29-12 contract or provides particulars of performance under Section
29-13 103.05; or
29-14 (B) the primary performance is other than
29-15 delivery or acceptance of a copy, the agreement is not a
29-16 mass-market transaction, and the parties at the time of contracting
29-17 had reason to know that a record or term would be presented after
29-18 performance, use, or access to the information began.
29-19 (4) The right to a return under Subdivision (3) may
29-20 arise by law or by agreement.
29-21 (f) The effect of provisions of this section may be modified
29-22 by an agreement setting out standards applicable to future
29-23 transactions between the parties.
29-24 (g) Providers of online services, network access, and
29-25 telecommunications services, or the operators of facilities
29-26 thereof, do not manifest assent to a contractual relationship
29-27 simply by their provision of those services to other parties,
30-1 including, without limitation, transmission, routing, or providing
30-2 connections, linking, caching, hosting, information location tools,
30-3 or storage of materials, at the request or initiation of a person
30-4 other than the service provider.
30-5 Sec. 101.13. VARIATION BY AGREEMENT; COMMERCIAL PRACTICE.
30-6 (a) The effect of any provision of this title, including an
30-7 allocation of risk or imposition of a burden, may be varied by
30-8 agreement of the parties. However, the following rules apply:
30-9 (1) Obligations of good faith, diligence,
30-10 reasonableness, and care imposed by this title may not be
30-11 disclaimed by agreement, but the parties by agreement may determine
30-12 the standards by which the performance of the obligation is to be
30-13 measured if the standards are not manifestly unreasonable.
30-14 (2) The limitations on enforceability imposed by
30-15 unconscionability under Section 101.11 and fundamental public
30-16 policy under Section 101.05(b) may not be varied by agreement.
30-17 (3) Limitations on enforceability of, or agreement to,
30-18 a contract, term, or right expressly stated in the sections listed
30-19 in the following paragraphs may not be varied by agreement except
30-20 to the extent provided in each section:
30-21 (A) the limitations on agreed choice of law in
30-22 Section 101.09(a);
30-23 (B) the limitations on agreed choice of forum in
30-24 Section 101.10;
30-25 (C) the requirements for manifesting assent and
30-26 opportunity for review in Section 101.12;
30-27 (D) the limitations on enforceability in Section
31-1 102.01;
31-2 (E) the limitations on a mass-market license in
31-3 Section 102.09;
31-4 (F) the consumer defense arising from an
31-5 electronic error in Section 102.14;
31-6 (G) the requirements for an enforceable term in
31-7 Sections 103.03(b), 103.07(g), 104.06(b) and (c), and 108.04(a);
31-8 (H) the limitations on a financier in Sections
31-9 105.07 through 105.11;
31-10 (I) the restrictions on altering the period of
31-11 limitations in Sections 108.05(a) and (b); and
31-12 (J) the limitations on self-help repossession in
31-13 Sections 108.15(b) and 108.16.
31-14 (b) Any usage of trade of which the parties are or should be
31-15 aware and any course of dealing or course of performance between
31-16 the parties are relevant to determining the existence or meaning of
31-17 an agreement.
31-18 Sec. 101.14. SUPPLEMENTAL PRINCIPLES; GOOD FAITH; DECISION
31-19 FOR COURT; REASONABLE TIME; REASON TO KNOW. (a) Unless displaced
31-20 by this title, principles of law and equity, including the law
31-21 merchant and the common law of this state relative to capacity to
31-22 contract, principal and agent, estoppel, fraud, misrepresentation,
31-23 duress, coercion, mistake, and other validating or invalidating
31-24 cause, supplement this title. Among the laws supplementing and not
31-25 displaced by this title are trade secret laws and unfair
31-26 competition laws.
31-27 (b) Every contract or duty within the scope of this title
32-1 imposes an obligation of good faith in its performance or
32-2 enforcement.
32-3 (c) Whether a term is conspicuous or is unenforceable under
32-4 Section 101.05(a) or (b), 101.11, or 102.09(a) and whether an
32-5 attribution procedure is commercially reasonable or effective under
32-6 Section 101.08, 102.12, or 102.13 are questions to be determined by
32-7 the court.
32-8 (d) Whether an agreement has legal consequences is
32-9 determined by this title.
32-10 (e) Whenever this title requires any action to be taken
32-11 within a reasonable time, the following rules apply:
32-12 (1) What is a reasonable time for taking the action
32-13 depends on the nature, purpose, and circumstances of the action.
32-14 (2) Any time that is not manifestly unreasonable may
32-15 be fixed by agreement.
32-16 (f) A person has reason to know a fact if the person has
32-17 knowledge of the fact or, from all the facts and circumstances
32-18 known to the person without investigation, the person should be
32-19 aware that the fact exists.
32-20 CHAPTER 102. FORMATION AND TERMS
32-21 SUBCHAPTER A. FORMATION OF CONTRACT
32-22 Sec. 102.01. FORMAL REQUIREMENTS. (a) Except as otherwise
32-23 provided in this section, a contract requiring payment of a
32-24 contract fee of $5,000 or more is not enforceable by way of action
32-25 or defense unless:
32-26 (1) the party against which enforcement is sought
32-27 authenticated a record sufficient to indicate that a contract has
33-1 been formed and which reasonably identifies the copy or subject
33-2 matter to which the contract refers; or
33-3 (2) the agreement is a license for an agreed duration
33-4 of one year or less or which may be terminated at will by the party
33-5 against which the contract is asserted.
33-6 (b) A record is sufficient under Subsection (a) even if it
33-7 omits or incorrectly states a term, but the contract is not
33-8 enforceable under that subsection beyond the number of copies or
33-9 subject matter shown in the record.
33-10 (c) A contract that does not satisfy the requirements of
33-11 Subsection (a) is nevertheless enforceable under that subsection
33-12 if:
33-13 (1) a performance was tendered or the information was
33-14 made available by one party and the tender was accepted or the
33-15 information accessed by the other; or
33-16 (2) the party against which enforcement is sought
33-17 admits in court, by pleading or by testimony or otherwise under
33-18 oath, facts sufficient to indicate a contract has been made, but
33-19 the agreement is not enforceable under this subdivision beyond the
33-20 number of copies or the subject matter admitted.
33-21 (d) Between merchants, if, within a reasonable time, a
33-22 record in confirmation of the contract and sufficient against the
33-23 sender is received and the party receiving it has reason to know
33-24 its contents, the record satisfies Subsection (a) against the
33-25 party receiving it unless notice of objection to its contents is
33-26 given in a record within a reasonable time after the confirming
33-27 record is received.
34-1 (e) An agreement that the requirements of this section need
34-2 not be satisfied as to future transactions is effective if
34-3 evidenced in a record authenticated by the person against which
34-4 enforcement is sought.
34-5 (f) A transaction within the scope of this title is not
34-6 subject to a statute of frauds contained in another law of this
34-7 state.
34-8 Sec. 102.02. FORMATION IN GENERAL. (a) A contract may be
34-9 formed in any manner sufficient to show agreement, including offer
34-10 and acceptance or conduct of both parties or operations of
34-11 electronic agents which recognize the existence of a contract.
34-12 (b) If the parties so intend, an agreement sufficient to
34-13 constitute a contract may be found even if the time of its making
34-14 is undetermined, one or more terms are left open or to be agreed
34-15 on, the records of the parties do not otherwise establish a
34-16 contract, or one party reserves the right to modify terms.
34-17 (c) Even if one or more terms are left open or to be agreed
34-18 upon, a contract does not fail for indefiniteness if the parties
34-19 intended to make a contract and there is a reasonably certain basis
34-20 for giving an appropriate remedy.
34-21 (d) In the absence of conduct or performance by both parties
34-22 to the contrary, a contract is not formed if there is a material
34-23 disagreement about a material term, including a term concerning
34-24 scope.
34-25 (e) If a term is to be adopted by later agreement and the
34-26 parties intend not to be bound unless the term is so adopted, a
34-27 contract is not formed if the parties do not agree to the term. In
35-1 that case, each party shall deliver to the other party, or with the
35-2 consent of the other party destroy, all copies of information,
35-3 access materials, and other materials received or made, and each
35-4 party is entitled to a return with respect to any contract fee paid
35-5 for which performance has not been received, has not been accepted,
35-6 or has been redelivered without any benefit being retained. The
35-7 parties remain bound by any restriction in a contractual use term
35-8 with respect to information or copies received or made from copies
35-9 received pursuant to the agreement, but the contractual use term
35-10 does not apply to information or copies properly received or
35-11 obtained from another source.
35-12 Sec. 102.03. OFFER AND ACCEPTANCE IN GENERAL. Unless
35-13 otherwise unambiguously indicated by the language or the
35-14 circumstances:
35-15 (1) An offer to make a contract invites acceptance in
35-16 any manner and by any medium reasonable under the circumstances.
35-17 (2) An order or other offer to acquire a copy for
35-18 prompt or current delivery invites acceptance by either a prompt
35-19 promise to ship or a prompt or current shipment of a conforming or
35-20 nonconforming copy. However, a shipment of a nonconforming copy is
35-21 not an acceptance if the licensor seasonably notifies the licensee
35-22 that the shipment is offered only as an accommodation to the
35-23 licensee.
35-24 (3) If the beginning of a requested performance is a
35-25 reasonable mode of acceptance, an offeror that is not notified of
35-26 acceptance or performance within a reasonable time may treat the
35-27 offer as having lapsed before acceptance.
36-1 (4) If an offer in an electronic message evokes an
36-2 electronic message accepting the offer, a contract is formed:
36-3 (A) when an electronic acceptance is received;
36-4 or
36-5 (B) if the response consists of beginning
36-6 performance, full performance, or giving access to information,
36-7 when the performance is received or the access is enabled and
36-8 necessary access materials are received.
36-9 Sec. 102.04. ACCEPTANCE WITH VARYING TERMS. (a) In this
36-10 section, an acceptance materially alters an offer if it contains a
36-11 term that materially conflicts with or varies a term of the offer
36-12 or that adds a material term not contained in the offer.
36-13 (b) Except as otherwise provided in Section 102.05, a
36-14 definite and seasonable expression of acceptance operates as an
36-15 acceptance, even if the acceptance contains terms that vary from
36-16 the terms of the offer, unless the acceptance materially alters the
36-17 offer.
36-18 (c) If an acceptance materially alters the offer, the
36-19 following rules apply:
36-20 (1) A contract is not formed unless:
36-21 (A) a party agrees, such as by manifesting
36-22 assent, to the other party's offer or acceptance; or
36-23 (B) all the other circumstances, including the
36-24 conduct of the parties, establish a contract.
36-25 (2) If a contract is formed by the conduct of both
36-26 parties, the terms of the contract are determined under Section
36-27 102.10.
37-1 (d) If an acceptance varies from but does not materially
37-2 alter the offer, a contract is formed based on the terms of the
37-3 offer. In addition, the following rules apply:
37-4 (1) Terms in the acceptance which conflict with terms
37-5 in the offer are not part of the contract.
37-6 (2) An additional nonmaterial term in the acceptance
37-7 is a proposal for an additional term. Between merchants, the
37-8 proposed additional term becomes part of the contract unless the
37-9 offeror gives notice of objection before, or within a reasonable
37-10 time after, it receives the proposed terms.
37-11 Sec. 102.05. CONDITIONAL OFFER OR ACCEPTANCE. (a) In this
37-12 section, an offer or acceptance is conditional if it is conditioned
37-13 on agreement by the other party to all the terms of the offer or
37-14 acceptance.
37-15 (b) Except as otherwise provided in Subsection (c), a
37-16 conditional offer or acceptance precludes formation of a contract
37-17 unless the other party agrees to its terms, such as by manifesting
37-18 assent.
37-19 (c) If an offer and acceptance are in standard forms and at
37-20 least one form is conditional, the following rules apply:
37-21 (1) Conditional language in a standard term precludes
37-22 formation of a contract only if the actions of the party proposing
37-23 the form are consistent with the conditional language, such as by
37-24 refusing to perform, refusing to permit performance, or refusing to
37-25 accept the benefits of the agreement, until its proposed terms are
37-26 accepted.
37-27 (2) A party that agrees, such as by manifesting
38-1 assent, to a conditional offer that is effective under Subdivision
38-2 (1) adopts the terms of the offer under Section 102.08 or 102.09,
38-3 except a term that conflicts with an expressly agreed term
38-4 regarding price or quantity.
38-5 Sec. 102.06. OFFER AND ACCEPTANCE: ELECTRONIC AGENTS. (a) A
38-6 contract may be formed by the interaction of electronic agents. If
38-7 the interaction results in the electronic agents' engaging in
38-8 operations that under the circumstances indicate acceptance of an
38-9 offer, a contract is formed, but a court may grant appropriate
38-10 relief if the operations resulted from fraud, electronic mistake,
38-11 or the like.
38-12 (b) A contract may be formed by the interaction of an
38-13 electronic agent and an individual acting on the individual's own
38-14 behalf or for another person. A contract is formed if the
38-15 individual takes an action or makes a statement that the individual
38-16 can refuse to take or say and that the individual has reason to
38-17 know will:
38-18 (1) cause the electronic agent to perform, provide
38-19 benefits, or allow the use or access that is the subject of the
38-20 contract, or send instructions to do so; or
38-21 (2) indicate acceptance, regardless of other
38-22 expressions or actions by the individual to which the individual
38-23 has reason to know the electronic agent cannot react.
38-24 (c) The terms of a contract formed under Subsection (b) are
38-25 determined under Section 102.08 or 102.09 but do not include a term
38-26 provided by the individual if the individual had reason to know
38-27 that the electronic agent could not react to the term.
39-1 Sec. 102.07. FORMATION: RELEASES OF INFORMATIONAL RIGHTS.
39-2 (a) A release is effective without consideration if it is:
39-3 (1) in a record to which the releasing party agrees,
39-4 such as by manifesting assent, and which identifies the
39-5 informational rights released; or
39-6 (2) enforceable under estoppel, implied license, or
39-7 other law.
39-8 (b) A release continues for the duration of the
39-9 informational rights released if the release does not specify its
39-10 duration and does not require affirmative performance after the
39-11 grant of the release by:
39-12 (1) the party granting the release; or
39-13 (2) the party receiving the release, except for
39-14 relatively insignificant acts.
39-15 (c) In cases not governed by Subsection (b), the duration of
39-16 a release is governed by Section 103.08.
39-17 SUBCHAPTER B. TERMS OF RECORDS
39-18 Sec. 102.08. ADOPTING TERMS OF RECORDS. Except as otherwise
39-19 provided in Section 102.09, the following rules apply:
39-20 (1) A party adopts the terms of a record, including a
39-21 standard form, as the terms of the contract if the party agrees to
39-22 the record, such as by manifesting assent.
39-23 (2) The terms of a record may be adopted pursuant to
39-24 Subdivision (1) after beginning performance or use if the parties
39-25 had reason to know that their agreement would be represented in
39-26 whole or part by a later record to be agreed on and there would not
39-27 be an opportunity to review the record or a copy of it before
40-1 performance or use begins. If the parties fail to agree to the
40-2 later terms and did not intend to form a contract unless they so
40-3 agreed, Section 102.02(e) applies.
40-4 (3) If a party adopts the terms of a record, the terms
40-5 become part of the contract without regard to the party's knowledge
40-6 or understanding of individual terms in the record, except for a
40-7 term that is unenforceable because it fails to satisfy another
40-8 requirement of this title.
40-9 Sec. 102.09. MASS-MARKET LICENSE. (a) A party adopts the
40-10 terms of a mass-market license for purposes of Section 102.08 only
40-11 if the party agrees to the license, such as by manifesting assent,
40-12 before or during the party's initial performance or use of or
40-13 access to the information. A term is not part of the license if:
40-14 (1) the term is unconscionable or is unenforceable
40-15 under Section 101.05(a) or (b); or
40-16 (2) subject to Section 103.01, the term conflicts with
40-17 a term to which the parties to the license have expressly agreed.
40-18 (b) If a mass-market license or a copy of the license is not
40-19 available in a manner permitting an opportunity to review by the
40-20 licensee before the licensee becomes obligated to pay and the
40-21 licensee does not agree, such as by manifesting assent, to the
40-22 license after having an opportunity to review, the licensee is
40-23 entitled to a return under Section 101.12 and, in addition, to:
40-24 (1) reimbursement of any reasonable expenses incurred
40-25 in complying with the licensor's instructions for returning or
40-26 destroying the computer information or, in the absence of
40-27 instructions, expenses incurred for return postage or similar
41-1 reasonable expense in returning the computer information; and
41-2 (2) compensation for any reasonable and foreseeable
41-3 costs of restoring the licensee's information processing system to
41-4 reverse changes in the system caused by the installation, if:
41-5 (A) the installation occurs because information
41-6 must be installed to enable review of the license; and
41-7 (B) the installation alters the system or
41-8 information in it but does not restore the system or information
41-9 after removal of the installed information because the licensee
41-10 rejected the license.
41-11 (c) In a mass-market transaction, if the licensor does not
41-12 have an opportunity to review a record containing proposed terms
41-13 from the licensee before the licensor delivers or becomes obligated
41-14 to deliver the information, and if the licensor does not agree,
41-15 such as by manifesting assent, to those terms after having that
41-16 opportunity, the licensor is entitled to a return.
41-17 Sec. 102.10. TERMS OF CONTRACT FORMED BY CONDUCT. (a)
41-18 Except as otherwise provided in Subsection (b) and subject to
41-19 Section 103.01, if a contract is formed by conduct of the parties,
41-20 the terms of the contract are determined by consideration of the
41-21 terms and conditions to which the parties expressly agreed, course
41-22 of performance, course of dealing, usage of trade, the nature of
41-23 the parties' conduct, the records exchanged, the information or
41-24 informational rights involved, and all other relevant
41-25 circumstances. If a court cannot determine the terms of the
41-26 contract from the foregoing factors, the supplementary principles
41-27 of this title apply.
42-1 (b) This section does not apply if the parties authenticate
42-2 a record of the contract or a party agrees, such as by manifesting
42-3 assent, to the record containing the terms of the other party.
42-4 Sec. 102.11. PRETRANSACTION DISCLOSURES IN INTERNET-TYPE
42-5 TRANSACTIONS. This section applies to a licensor that makes its
42-6 computer information available to a licensee by electronic means
42-7 from its Internet or similar electronic site. In such a case, the
42-8 licensor affords an opportunity to review the terms of a standard
42-9 form license which opportunity satisfies Section 101.12(e) with
42-10 respect to a licensee that acquires the information from that site,
42-11 if the licensor:
42-12 (1) makes the standard terms of the license readily
42-13 available for review by the licensee before the information is
42-14 delivered or the licensee becomes obligated to pay, whichever
42-15 occurs first, by:
42-16 (A) displaying prominently and in close
42-17 proximity to a description of the computer information, or to
42-18 instructions or steps for acquiring it, the standard terms or a
42-19 reference to an electronic location from which they can be readily
42-20 obtained; or
42-21 (B) disclosing the availability of the standard
42-22 terms in a prominent place on the site from which the computer
42-23 information is offered and promptly furnishing a copy of the
42-24 standard terms on request before the transfer of the computer
42-25 information; and
42-26 (2) does not take affirmative acts to prevent printing
42-27 or storage of the standard terms for archival or review purposes by
43-1 the licensee.
43-2 SUBCHAPTER C. ELECTRONIC CONTRACTS: GENERALLY
43-3 Sec. 102.12. EFFICACY AND COMMERCIAL REASONABLENESS OF
43-4 ATTRIBUTION PROCEDURE. The efficacy, including the commercial
43-5 reasonableness, of an attribution procedure is determined by the
43-6 court. In making this determination, the following rules apply:
43-7 (1) An attribution procedure established by law is
43-8 effective for transactions within the coverage of the statute or
43-9 rule.
43-10 (2) Except as otherwise provided in Subdivision (1),
43-11 commercial reasonableness and effectiveness is determined in light
43-12 of the purposes of the procedure and the commercial circumstances
43-13 at the time the parties agreed to or adopted the procedure.
43-14 (3) An attribution procedure may use any security
43-15 device or method that is commercially reasonable under the
43-16 circumstances.
43-17 Sec. 102.13. DETERMINING ATTRIBUTION. (a) An electronic
43-18 authentication, display, message, record, or performance is
43-19 attributed to a person if it was the act of the person or its
43-20 electronic agent, or if the person is bound by it under agency or
43-21 other law. The party relying on attribution of an electronic
43-22 authentication, display, message, record, or performance to another
43-23 person has the burden of establishing attribution.
43-24 (b) The act of a person may be shown in any manner,
43-25 including a showing of the efficacy of an attribution procedure
43-26 that was agreed to or adopted by the parties or established by law.
43-27 (c) The effect of an electronic act attributed to a person
44-1 under Subsection (a) is determined from the context at the time of
44-2 its creation, execution, or adoption, including the parties'
44-3 agreement, if any, or otherwise as provided by law.
44-4 (d) If an attribution procedure exists to detect errors or
44-5 changes in an electronic authentication, display, message, record,
44-6 or performance, and was agreed to or adopted by the parties or
44-7 established by law, and one party conformed to the procedure but
44-8 the other party did not, and the nonconforming party would have
44-9 detected the change or error had that party also conformed, the
44-10 effect of noncompliance is determined by the agreement but, in the
44-11 absence of agreement, the conforming party may avoid the effect of
44-12 the error or change.
44-13 Sec. 102.14. ELECTRONIC ERROR: CONSUMER DEFENSES. (a) In
44-14 this section, "electronic error" means an error in an electronic
44-15 message created by a consumer using an information processing
44-16 system if a reasonable method to detect and correct or avoid the
44-17 error was not provided.
44-18 (b) In an automated transaction, a consumer is not bound by
44-19 an electronic message that the consumer did not intend and which
44-20 was caused by an electronic error, if the consumer:
44-21 (1) promptly on learning of the error:
44-22 (A) notifies the other party of the error; and
44-23 (B) causes delivery to the other party or,
44-24 pursuant to reasonable instructions received from the other party,
44-25 delivers to another person or destroys all copies of the
44-26 information; and
44-27 (2) has not used, or received any benefit or value
45-1 from, the information or caused the information or benefit to be
45-2 made available to a third party.
45-3 (c) If Subsection (b) does not apply, the effect of an
45-4 electronic error is determined by other law.
45-5 Sec. 102.15. ELECTRONIC MESSAGE: WHEN EFFECTIVE; EFFECT OF
45-6 ACKNOWLEDGMENT. (a) Receipt of an electronic message is effective
45-7 when received even if no individual is aware of its receipt.
45-8 (b) Receipt of an electronic acknowledgment of an electronic
45-9 message establishes that the message was received but by itself
45-10 does not establish that the content sent corresponds to the content
45-11 received.
45-12 SUBCHAPTER D. IDEA AND INFORMATION SUBMISSIONS
45-13 Sec. 102.16. IDEA OR INFORMATION SUBMISSION. (a) The
45-14 following rules apply to a submission of an idea or information for
45-15 the creation, development, or enhancement of computer information
45-16 which is not made pursuant to an existing agreement requiring the
45-17 submission:
45-18 (1) A contract is not formed and is not implied from
45-19 the mere receipt of an unsolicited submission.
45-20 (2) Engaging in a business, trade, or industry that by
45-21 custom or practice regularly acquires ideas is not in itself an
45-22 express or implied solicitation of the information.
45-23 (3) If the recipient seasonably notifies the person
45-24 making the submission that the recipient maintains a procedure to
45-25 receive and review submissions, a contract is formed only if:
45-26 (A) the submission is made and a contract
45-27 accepted pursuant to that procedure; or
46-1 (B) the recipient expressly agrees to terms
46-2 concerning the submission.
46-3 (b) An agreement to disclose an idea creates a contract
46-4 enforceable against the receiving party only if the idea as
46-5 disclosed is confidential, concrete, and novel to the business,
46-6 trade, or industry or the party receiving the disclosure otherwise
46-7 expressly agreed.
46-8 CHAPTER 103. CONSTRUCTION
46-9 SUBCHAPTER A. GENERAL
46-10 Sec. 103.01. PAROL OR EXTRINSIC EVIDENCE. Terms with respect
46-11 to which confirmatory records of the parties agree or which are
46-12 otherwise set forth in a record intended by the parties as a final
46-13 expression of their agreement with respect to terms included
46-14 therein may not be contradicted by evidence of any previous
46-15 agreement or of a contemporaneous oral agreement but may be
46-16 explained or supplemented by:
46-17 (1) course of performance, course of dealing, or usage
46-18 of trade; and
46-19 (2) evidence of consistent additional terms, unless
46-20 the court finds the record to have been intended as a complete and
46-21 exclusive statement of the terms of the agreement.
46-22 Sec. 103.02. PRACTICAL CONSTRUCTION. (a) The express terms
46-23 of an agreement and any course of performance, course of dealing,
46-24 or usage of trade must be construed whenever reasonable as
46-25 consistent with each other. However, if that construction is
46-26 unreasonable:
46-27 (1) express terms prevail over course of performance,
47-1 course of dealing, and usage of trade;
47-2 (2) course of performance prevails over course of
47-3 dealing and usage of trade; and
47-4 (3) course of dealing prevails over usage of trade.
47-5 (b) An applicable usage of trade in the place where any part
47-6 of performance is to occur must be used in interpreting the
47-7 agreement as to that part of the performance.
47-8 (c) Evidence of a relevant course of performance, course of
47-9 dealing, or usage of trade offered by one party in a proceeding is
47-10 not admissible unless and until the party offering the evidence has
47-11 given the other party notice that the court finds sufficient to
47-12 prevent unfair surprise.
47-13 (d) The existence and scope of a usage of trade must be
47-14 proved as facts.
47-15 Sec. 103.03. MODIFICATION AND RESCISSION. (a) An agreement
47-16 modifying a contract subject to this title needs no consideration
47-17 to be binding.
47-18 (b) An authenticated record that precludes modification or
47-19 rescission except by an authenticated record may not otherwise be
47-20 modified or rescinded. In a standard form supplied by a merchant
47-21 to a consumer, a term requiring an authenticated record for
47-22 modification of the contract is not enforceable unless the consumer
47-23 manifests assent to the term.
47-24 (c) A modification of a contract and the contract as
47-25 modified must satisfy the requirements of Sections 102.01(a) and
47-26 103.07(g) if the contract as modified is within those provisions.
47-27 (d) An attempt at modification or rescission which does not
48-1 satisfy Subsection (b) or (c) may operate as a waiver if Section
48-2 107.02 is satisfied.
48-3 Sec. 103.04. CONTINUING CONTRACTUAL TERMS. (a) Terms of an
48-4 agreement involving successive performances apply to all
48-5 performances, even if the terms are not displayed or otherwise
48-6 brought to the attention of a party with respect to each successive
48-7 performance, unless the terms are modified in accordance with this
48-8 title or the contract.
48-9 (b) If a contract provides that terms may be changed as to
48-10 future performances by compliance with a described procedure, a
48-11 change proposed in good faith pursuant to that procedure becomes
48-12 part of the contract if the procedure:
48-13 (1) reasonably notifies the other party of the change;
48-14 and
48-15 (2) in a mass-market transaction, permits the other
48-16 party to terminate the contract as to future performance if the
48-17 change alters a material term and the party in good faith
48-18 determines that the modification is unacceptable.
48-19 (c) The parties by agreement may determine the standards for
48-20 reasonable notice unless the agreed standards are manifestly
48-21 unreasonable in light of the commercial circumstances.
48-22 (d) The enforceability of changes made pursuant to a
48-23 procedure that does not comply with Subsection (b) is determined by
48-24 the other provisions of this title or other law.
48-25 Sec. 103.05. TERMS TO BE SPECIFIED. An agreement that is
48-26 otherwise sufficiently definite to be a contract is not invalid
48-27 because it leaves particulars of performance to be specified by one
49-1 of the parties. If particulars of performance are to be specified
49-2 by a party, the following rules apply:
49-3 (1) Specification must be made in good faith and
49-4 within limits set by commercial reasonableness.
49-5 (2) If a specification materially affects the other
49-6 party's performance but is not seasonably made, the other party:
49-7 (A) is excused for any resulting delay in its
49-8 performance; and
49-9 (B) may perform, suspend performance, or treat
49-10 the failure to specify as a breach of contract.
49-11 Sec. 103.06. PERFORMANCE UNDER OPEN TERMS. A performance
49-12 obligation of a party that cannot be determined from the agreement
49-13 or from other provisions of this title requires the party to
49-14 perform in a manner and in a time that is reasonable in light of
49-15 the commercial circumstances existing at the time of agreement.
49-16 SUBCHAPTER B. INTERPRETATION
49-17 Sec. 103.07. INTERPRETATION AND REQUIREMENTS FOR GRANT. (a)
49-18 A license grants:
49-19 (1) the contractual rights that are expressly
49-20 described; and
49-21 (2) a contractual right to use any informational
49-22 rights within the licensor's control at the time of contracting
49-23 which are necessary in the ordinary course to exercise the
49-24 expressly described rights.
49-25 (b) If a license expressly limits use of the information or
49-26 informational rights, use in any other manner is a breach of
49-27 contract. In all other cases, a license contains an implied
50-1 limitation that the licensee will not use the information or
50-2 informational rights otherwise than as described in Subsection (a).
50-3 However, use inconsistent with this implied limitation is not a
50-4 breach if it is permitted under applicable law in the absence of
50-5 the implied limitation.
50-6 (c) An agreement that does not specify the number of
50-7 permitted users permits a number of users which is reasonable in
50-8 light of the informational rights involved and the commercial
50-9 circumstances existing at the time of the agreement.
50-10 (d) A party is not entitled to any rights in new versions
50-11 of, or improvements or modifications to, information made by the
50-12 other party. A licensor's agreement to provide new versions,
50-13 improvements, or modifications requires that the licensor provide
50-14 them as developed and made generally commercially available from
50-15 time to time by the licensor.
50-16 (e) Neither party is entitled to receive copies of source
50-17 code, schematics, master copy, design material, or other
50-18 information used by the other party in creating, developing, or
50-19 implementing the information.
50-20 (f) Terms concerning scope must be construed under ordinary
50-21 principles of contract interpretation in light of the informational
50-22 rights and the commercial context. In addition, the following
50-23 rules apply:
50-24 (1) A grant of "all possible rights and for all media"
50-25 or "all rights and for all media now known or later developed," or
50-26 a grant in similar terms, includes all rights then existing or
50-27 later created by law and all uses, media, and methods of
51-1 distribution or exhibition, whether then existing or developed in
51-2 the future and whether or not anticipated at the time of the grant.
51-3 (2) A grant of an "exclusive license," or a grant in
51-4 similar terms, means that:
51-5 (A) for the duration of the license, the
51-6 licensor will not exercise, and will not grant to any other person,
51-7 rights in the same information or informational rights within the
51-8 scope of the exclusive grant; and
51-9 (B) the licensor affirms that it has not
51-10 previously granted those rights in a contract in effect when the
51-11 licensee's rights may be exercised.
51-12 (g) The rules in this section may be varied only by a record
51-13 that is sufficient to indicate that a contract has been made and
51-14 which is:
51-15 (1) authenticated by the party against which
51-16 enforcement is sought; or
51-17 (2) prepared and delivered by one party and adopted by
51-18 the other under Section 102.08 or 102.09.
51-19 Sec. 103.08. DURATION OF CONTRACT. If an agreement does not
51-20 specify its duration, to the extent allowed by other law, the
51-21 following rules apply:
51-22 (1) Except as otherwise provided in Subdivision (2),
51-23 the agreement is enforceable for a time reasonable in light of the
51-24 licensed subject matter and commercial circumstances but may be
51-25 terminated as to future performances at will by either party during
51-26 that time on giving seasonable notice to the other party.
51-27 (2) The duration of contractual rights to use licensed
52-1 subject matter is a time reasonable in light of the licensed
52-2 informational rights and the commercial circumstances. However,
52-3 subject to cancellation for breach of contract, the duration of the
52-4 license is perpetual as to the contractual rights and contractual
52-5 use terms if:
52-6 (A) the license is of a computer program that
52-7 does not include source code and the license:
52-8 (i) transfers ownership of a copy; or
52-9 (ii) delivers a copy for a contract fee
52-10 the total amount of which is fixed at or before the time of
52-11 delivery of the copy; or
52-12 (B) the license expressly grants the right to
52-13 incorporate or use the licensed information or informational rights
52-14 with information or informational rights from other sources in a
52-15 combined work for public distribution or public performance.
52-16 Sec. 103.09. AGREEMENT FOR PERFORMANCE TO PARTY'S
52-17 SATISFACTION. (a) Except as otherwise provided in Subsection (b),
52-18 an agreement that provides that the performance of one party is to
52-19 be to the satisfaction or approval of the other party requires
52-20 performance sufficient to satisfy a reasonable person in the
52-21 position of the party that must be satisfied.
52-22 (b) Performance must be to the subjective satisfaction of
52-23 the other party if:
52-24 (1) the agreement expressly so provides, such as by
52-25 stating that approval is in the "sole discretion" of the party, or
52-26 words of similar import; or
52-27 (2) the agreement is for informational content to be
53-1 evaluated in reference to subjective characteristics such as
53-2 aesthetics, appeal, suitability to taste, or subjective quality.
53-3 CHAPTER 104. WARRANTIES
53-4 Sec. 104.01. WARRANTY AND OBLIGATIONS CONCERNING
53-5 NONINTERFERENCE AND NONINFRINGEMENT. (a) A licensor of
53-6 information that is a merchant regularly dealing in information of
53-7 the kind warrants that the information will be delivered free of
53-8 the rightful claim of any third person by way of infringement or
53-9 misappropriation, but a licensee that furnishes detailed
53-10 specifications to the licensor and the method required for meeting
53-11 the specifications holds the licensor harmless against any such
53-12 claim that arises out of compliance with either the required
53-13 specification or the required method except for a claim that
53-14 results from the failure of the licensor to adopt, or notify the
53-15 licensee of, a noninfringing alternative of which the licensor had
53-16 reason to know.
53-17 (b) A licensor warrants:
53-18 (1) for the duration of the license, that no person
53-19 holds a rightful claim to, or interest in, the information which
53-20 arose from an act or omission of the licensor, other than a claim
53-21 by way of infringement or misappropriation, which will interfere
53-22 with the licensee's enjoyment of its interest; and
53-23 (2) as to rights granted exclusively to the licensee,
53-24 that within the scope of the license:
53-25 (A) to the knowledge of the licensor, any
53-26 licensed patent rights are valid and exclusive to the extent
53-27 exclusivity and validity are recognized by the law under which the
54-1 patent rights were created; and
54-2 (B) in all other cases, the licensed
54-3 informational rights are valid and exclusive for the information as
54-4 a whole to the extent exclusivity and validity are recognized by
54-5 the law applicable to the licensed rights in a jurisdiction to
54-6 which the license applies.
54-7 (c) The warranties in this section are subject to the
54-8 following rules:
54-9 (1) If the licensed informational rights are subject
54-10 to a right of privileged use, collective administration, or
54-11 compulsory licensing, the warranty is not made with respect to
54-12 those rights.
54-13 (2) The obligations under Subsections (a) and (b)(2)
54-14 apply solely to informational rights arising under the laws of the
54-15 United States or a state, unless the contract expressly provides
54-16 that the warranty obligations extend to rights under the laws of
54-17 other countries. Language is sufficient for this purpose if it
54-18 states "The licensor warrants 'exclusivity' 'noninfringement' 'in
54-19 specified countries' 'worldwide,'" or words of similar import. In
54-20 that case, the warranty extends to the specified country or, in the
54-21 case of a reference to "worldwide" or the like, to all countries
54-22 within the description, but only to the extent the rights are
54-23 recognized under a treaty or international convention to which the
54-24 country and the United States are signatories.
54-25 (3) The warranties under Subsections (a) and (b)(2)
54-26 are not made by a license that merely permits use, or covenants not
54-27 to claim infringement because of the use, of rights under a
55-1 licensed patent.
55-2 (d) Except as otherwise provided in Subsection (e), a
55-3 warranty under this section may be disclaimed or modified only by
55-4 specific language or by circumstances that give the licensee reason
55-5 to know that the licensor does not warrant that competing claims do
55-6 not exist or that the licensor purports to grant only the rights it
55-7 may have. In an automated transaction, language is sufficient if
55-8 it is conspicuous. Otherwise, language in a record is sufficient
55-9 if it states "There is no warranty against interference with your
55-10 enjoyment of the information or against infringement," or words of
55-11 similar import.
55-12 (e) Between merchants, a grant of a "quitclaim," or a grant
55-13 in similar terms, grants the information or informational rights
55-14 without an implied warranty as to infringement or misappropriation
55-15 or as to the rights actually possessed or transferred by the
55-16 licensor.
55-17 Sec. 104.02. EXPRESS WARRANTY. (a) Subject to Subsection
55-18 (c), an express warranty by a licensor is created as follows:
55-19 (1) An affirmation of fact or promise made by the
55-20 licensor to its licensee, including by advertising, which relates
55-21 to the information and becomes part of the basis of the bargain
55-22 creates an express warranty that the information to be furnished
55-23 under the agreement will conform to the affirmation or promise.
55-24 (2) Any description of the information which is made
55-25 part of the basis of the bargain creates an express warranty that
55-26 the information will conform to the description.
55-27 (3) Any sample, model, or demonstration of a final
56-1 product which is made part of the basis of the bargain creates an
56-2 express warranty that the performance of the information will
56-3 reasonably conform to the performance of the sample, model, or
56-4 demonstration, taking into account differences that would appear to
56-5 a reasonable person in the position of the licensee between the
56-6 sample, model, or demonstration and the information as it will be
56-7 used.
56-8 (b) It is not necessary to the creation of an express
56-9 warranty that the licensor use formal words, such as "warranty" or
56-10 "guaranty," or state a specific intention to make a warranty.
56-11 However, an express warranty is not created by:
56-12 (1) an affirmation or prediction merely of the value
56-13 of the information or informational rights;
56-14 (2) a display or description of a portion of the
56-15 information to illustrate the aesthetics, appeal, suitability to
56-16 taste, subjective quality, or the like, of informational content;
56-17 or
56-18 (3) a statement purporting to be merely opinion or
56-19 commendation of the information or informational rights.
56-20 (c) An express warranty or similar express contractual
56-21 obligation, if any, exists with respect to published informational
56-22 content covered by this title to the same extent that it would
56-23 exist if the published informational content had been published in
56-24 a form that placed it outside this title. However, if the warranty
56-25 or similar express contractual obligation is breached, the remedies
56-26 of the aggrieved party are those under this title and the
56-27 agreement.
57-1 Sec. 104.03. IMPLIED WARRANTY: MERCHANTABILITY OF COMPUTER
57-2 PROGRAM. (a) Unless the warranty is disclaimed or modified, a
57-3 licensor that is a merchant with respect to computer programs of
57-4 the kind warrants:
57-5 (1) to the end user that the computer program is fit
57-6 for the ordinary purposes for which such computer programs are
57-7 used;
57-8 (2) to the distributor that:
57-9 (A) the program is adequately packaged and
57-10 labeled as the agreement requires; and
57-11 (B) in the case of multiple copies, the copies
57-12 are within the variations permitted by the agreement, of even kind,
57-13 quality, and quantity within each unit and among all units
57-14 involved; and
57-15 (3) that the program conforms to any promises or
57-16 affirmations of fact made on the container or label.
57-17 (b) Unless disclaimed or modified, other implied warranties
57-18 with respect to computer programs may arise from course of dealing
57-19 or usage of trade.
57-20 (c) No warranty is created under this section with respect
57-21 to informational content, but an implied warranty may arise under
57-22 Section 104.04.
57-23 Sec. 104.04. IMPLIED WARRANTY: INFORMATIONAL CONTENT. (a)
57-24 Unless the warranty is disclaimed or modified, a merchant that, in
57-25 a special relationship of reliance with a licensee, collects,
57-26 compiles, processes, provides, or transmits informational content
57-27 warrants to that licensee that there is no inaccuracy in the
58-1 informational content caused by the merchant's failure to perform
58-2 with reasonable care.
58-3 (b) A warranty does not arise under Subsection (a) with
58-4 respect to:
58-5 (1) published informational content; or
58-6 (2) a person that acts as a conduit or provides no
58-7 more than editorial services in collecting, compiling,
58-8 distributing, processing, providing, or transmitting informational
58-9 content that under the circumstances can be identified as that of a
58-10 third person.
58-11 (c) The warranty under this section is not subject to the
58-12 preclusion in Section 101.13(a)(1) on disclaiming obligations of
58-13 diligence, reasonableness, or care.
58-14 Sec. 104.05. IMPLIED WARRANTY: LICENSEE'S PURPOSE; SYSTEM
58-15 INTEGRATION. (a) Unless the warranty is disclaimed or modified,
58-16 if a licensor at the time of contracting has reason to know any
58-17 particular purpose for which the computer information is required
58-18 and that the licensee is relying on the licensor's skill or
58-19 judgment to select, develop, or furnish suitable information, the
58-20 following rules apply:
58-21 (1) Except as otherwise provided in Subdivision (2),
58-22 there is an implied warranty that the information is fit for that
58-23 purpose.
58-24 (2) If from all the circumstances it appears that the
58-25 licensor was to be paid for the amount of its time or effort
58-26 regardless of the fitness of the resulting information, the
58-27 warranty under Subdivision (1) is that the information will not
59-1 fail to achieve the licensee's particular purpose as a result of
59-2 the licensor's lack of reasonable effort.
59-3 (b) There is no warranty under Subsection (a) with regard
59-4 to:
59-5 (1) the aesthetics, appeal, suitability to taste, or
59-6 subjective quality of informational content; or
59-7 (2) published informational content, but there may be
59-8 a warranty with regard to the licensor's selection among published
59-9 informational content from different providers if the selection is
59-10 made by an individual acting as or on behalf of the licensor.
59-11 (c) If an agreement requires a licensor to provide or select
59-12 a system consisting of computer programs and goods, and the
59-13 licensor has reason to know that the licensee is relying on the
59-14 skill or judgment of the licensor to select the components of the
59-15 system, there is an implied warranty that the components provided
59-16 or selected will function together as a system.
59-17 (d) The warranty under this section is not subject to the
59-18 preclusion in Section 101.13(a)(1) on disclaiming diligence,
59-19 reasonableness, or care.
59-20 Sec. 104.06. DISCLAIMER OR MODIFICATION OF WARRANTY. (a)
59-21 Words or conduct relevant to the creation of an express warranty
59-22 and words or conduct tending to disclaim or modify an express
59-23 warranty must be construed wherever reasonable as consistent with
59-24 each other. Subject to Section 103.01 with regard to parol or
59-25 extrinsic evidence, the disclaimer or modification is inoperative
59-26 to the extent that such construction is unreasonable.
59-27 (b) Except as otherwise provided in Subsections (c), (d),
60-1 and (e), to disclaim or modify an implied warranty or any part of
60-2 it, but not the warranty in Section 104.01, the following rules
60-3 apply:
60-4 (1) Except as otherwise provided in this subsection:
60-5 (A) To disclaim or modify the implied warranty
60-6 arising under Section 104.03, language must mention
60-7 "merchantability" or "quality" or use words of similar import and,
60-8 if in a record, must be conspicuous.
60-9 (B) To disclaim or modify the implied warranty
60-10 arising under Section 104.04, language in a record must mention
60-11 "accuracy" or use words of similar import.
60-12 (2) Language to disclaim or modify the implied
60-13 warranty arising under Section 104.05 must be in a record and be
60-14 conspicuous. It is sufficient to state "There is no warranty that
60-15 this information, our efforts, or the system will fulfill any of
60-16 your particular purposes or needs," or words of similar import.
60-17 (3) Language in a record is sufficient to disclaim all
60-18 implied warranties if it individually disclaims each implied
60-19 warranty or, except for the warranty in Section 104.01, if it is
60-20 conspicuous and states "Except for express warranties stated in
60-21 this contract, if any, this 'information' 'computer program' is
60-22 provided with all faults, and the entire risk as to satisfactory
60-23 quality, performance, accuracy, and effort is with the user," or
60-24 words of similar import.
60-25 (4) A disclaimer or modification sufficient under
60-26 Chapter 2 or 2A to disclaim or modify an implied warranty of
60-27 merchantability is sufficient to disclaim or modify the warranties
61-1 under Sections 104.03 and 104.04. A disclaimer or modification
61-2 sufficient under Chapter 2 or 2A to disclaim or modify an implied
61-3 warranty of fitness for a particular purpose is sufficient to
61-4 disclaim or modify the warranties under Section 104.05.
61-5 (c) Unless the circumstances indicate otherwise, all implied
61-6 warranties, but not the warranty under Section 104.01, are
61-7 disclaimed by expressions like "as is" or "with all faults" or
61-8 other language that in common understanding calls the licensee's
61-9 attention to the disclaimer of warranties and makes plain that
61-10 there are no implied warranties.
61-11 (d) If a licensee before entering into a contract has
61-12 examined the information or the sample or model as fully as it
61-13 desired or has refused to examine the information, there is no
61-14 implied warranty with regard to defects that an examination ought
61-15 in the circumstances to have revealed to the licensee.
61-16 (e) An implied warranty may also be disclaimed or modified
61-17 by course of performance, course of dealing, or usage of trade.
61-18 (f) If a contract requires ongoing performance or a series
61-19 of performances by the licensor, language of disclaimer or
61-20 modification which complies with this section is effective with
61-21 respect to all performances under the contract.
61-22 (g) Remedies for breach of warranty may be limited in
61-23 accordance with this title with respect to liquidation or
61-24 limitation of damages and contractual modification of remedy.
61-25 Sec. 104.07. MODIFICATION OF COMPUTER PROGRAM. A licensee
61-26 that modifies a computer program, other than by using a capability
61-27 of the program intended for that purpose in the ordinary course,
62-1 does not invalidate any warranty regarding performance of an
62-2 unmodified copy but does invalidate any warranties, express or
62-3 implied, regarding performance of the modified copy. A
62-4 modification occurs if a licensee alters code in, deletes code
62-5 from, or adds code to the computer program.
62-6 Sec. 104.08. CUMULATION AND CONFLICT OF WARRANTIES.
62-7 Warranties, whether express or implied, must be construed as
62-8 consistent with each other and as cumulative, but if that
62-9 construction is unreasonable, the intention of the parties
62-10 determines which warranty is dominant. In ascertaining that
62-11 intention, the following rules apply:
62-12 (1) Exact or technical specifications displace an
62-13 inconsistent sample or model or general language of description.
62-14 (2) A sample displaces inconsistent general language
62-15 of description.
62-16 (3) Express warranties displace inconsistent implied
62-17 warranties other than an implied warranty under Section 104.05(a).
62-18 Sec. 104.09. THIRD-PARTY BENEFICIARIES OF WARRANTY. (a)
62-19 Except for published informational content, a warranty to a
62-20 licensee extends to persons for whose benefit the licensor intends
62-21 to supply the information or informational rights and which
62-22 rightfully use the information in a transaction or application of a
62-23 kind in which the licensor intends the information to be used.
62-24 (b) A warranty to a consumer extends to each individual
62-25 consumer in the licensee's immediate family or household if the
62-26 individual's use would have been reasonably expected by the
62-27 licensor.
63-1 (c) A contractual term that excludes or limits the persons
63-2 to which a warranty extends is effective except as to individuals
63-3 described in Subsection (b).
63-4 (d) A disclaimer or modification of a warranty or remedy
63-5 which is effective against the licensee is also effective against
63-6 third persons to which a warranty extends under this section.
63-7 CHAPTER 105. TRANSFER OF INTERESTS AND RIGHTS
63-8 SUBCHAPTER A. OWNERSHIP AND TRANSFERS
63-9 Sec. 105.01. OWNERSHIP OF INFORMATIONAL RIGHTS. (a) If an
63-10 agreement provides for conveyance of ownership of informational
63-11 rights in a computer program, ownership passes at the time and
63-12 place specified by the agreement but does not pass until the
63-13 program is in existence and identified to the contract. If the
63-14 agreement does not specify a different time, ownership passes when
63-15 the program and the informational rights are in existence and
63-16 identified to the contract.
63-17 (b) Transfer of a copy does not transfer ownership of
63-18 informational rights.
63-19 Sec. 105.02. TITLE TO COPY. (a) In a license:
63-20 (1) title to a copy is determined by the license;
63-21 (2) a licensee's right under the license to possession
63-22 or control of a copy is governed by the license and does not depend
63-23 solely on title to the copy; and
63-24 (3) if a licensor reserves title to a copy, the
63-25 licensor retains title to that copy and any copies made of it,
63-26 unless the license grants the licensee a right to make and sell
63-27 copies to others, in which case the reservation of title applies
64-1 only to copies delivered to the licensee by the licensor.
64-2 (b) If an agreement provides for transfer of title to a
64-3 copy, title passes:
64-4 (1) at the time and place specified in the agreement;
64-5 or
64-6 (2) if the agreement does not specify a time and
64-7 place:
64-8 (A) with respect to delivery of a copy on a
64-9 tangible medium, at the time and place the licensor completed its
64-10 obligations with respect to tender of the copy; or
64-11 (B) with respect to electronic delivery of a
64-12 copy, if a first sale occurs under federal copyright law, at the
64-13 time and place at which the licensor completed its obligations with
64-14 respect to tender of the copy.
64-15 (c) If the party to which title passes under the contract
64-16 refuses delivery of the copy or rejects the terms of the agreement,
64-17 title revests in the licensor.
64-18 Sec. 105.03. TRANSFER OF CONTRACTUAL INTEREST. The following
64-19 rules apply to a transfer of a contractual interest:
64-20 (1) A party's contractual interest may be transferred
64-21 unless the transfer:
64-22 (A) is prohibited by other law; or
64-23 (B) except as otherwise provided in Subdivision
64-24 (3), would materially change the duty of the other party,
64-25 materially increase the burden or risk imposed on the other party,
64-26 or materially impair the other party's property or its likelihood
64-27 or expectation of obtaining return performance.
65-1 (2) Except as otherwise provided in Subdivision (3)
65-2 and Section 105.08(a)(1)(B), a term prohibiting transfer of a
65-3 party's contractual interest is enforceable, and a transfer made in
65-4 violation of that term is a breach of contract and is ineffective
65-5 to create contractual rights in the transferee against the
65-6 nontransferring party, except to the extent that:
65-7 (A) the contract is a license for incorporation
65-8 or use of the licensed information or informational rights with
65-9 information or informational rights from other sources in a
65-10 combined work for public distribution or public performance and the
65-11 transfer is of the completed, combined work; or
65-12 (B) the transfer is of a right to payment
65-13 arising out of the transferor's due performance of less than its
65-14 entire obligation and the transfer would be enforceable under
65-15 Subdivision (1) in the absence of the term prohibiting transfer.
65-16 (3) A right to damages for breach of the whole
65-17 contract or a right to payment arising out of the transferor's due
65-18 performance of its entire obligation may be transferred
65-19 notwithstanding an agreement otherwise.
65-20 (4) A term that prohibits transfer of a contractual
65-21 interest under a mass-market license by the licensee must be
65-22 conspicuous.
65-23 Sec. 105.04. EFFECT OF TRANSFER OF CONTRACTUAL INTEREST. (a)
65-24 A transfer of "the contract" or of "all my rights under the
65-25 contract," or a transfer in similar general terms, is a transfer of
65-26 all contractual interests under the contract. Whether the transfer
65-27 is effective is determined by Sections 105.03 and 105.08(a)(1)(B).
66-1 (b) The following rules apply to a transfer of a party's
66-2 contractual interests:
66-3 (1) The transferee is subject to all contractual use
66-4 terms.
66-5 (2) Unless the language or circumstances otherwise
66-6 indicate, as in a transfer as security, the transfer delegates the
66-7 duties of the transferor and transfers its rights.
66-8 (3) Acceptance of the transfer is a promise by the
66-9 transferee to perform the delegated duties. The promise is
66-10 enforceable by the transferor and any other party to the original
66-11 contract.
66-12 (4) The transfer does not relieve the transferor of
66-13 any duty to perform, or of liability for breach of contract, unless
66-14 the other party to the original contract agrees that the transfer
66-15 has that effect.
66-16 (c) A party to the original contract, other than the
66-17 transferor, may treat a transfer that conveys a right or duty of
66-18 performance without its consent as creating reasonable grounds for
66-19 insecurity and, without prejudice to the party's rights against the
66-20 transferor, may demand assurances from the transferee under Section
66-21 107.08.
66-22 Sec. 105.05. PERFORMANCE BY DELEGATE; SUBCONTRACT. (a) A
66-23 party may perform its contractual duties or exercise its
66-24 contractual rights through a delegate or a subcontract unless:
66-25 (1) the contract prohibits delegation or
66-26 subcontracting; or
66-27 (2) the other party has a substantial interest in
67-1 having the original promisor perform or control the performance.
67-2 (b) Delegating or subcontracting performance does not
67-3 relieve the delegating party of a duty to perform or of liability
67-4 for breach.
67-5 (c) An attempted delegation that violates a term prohibiting
67-6 delegation is not effective.
67-7 Sec. 105.06. TRANSFER BY LICENSEE. (a) If all or any part
67-8 of a licensee's interest in a license is transferred, voluntarily
67-9 or involuntarily, the transferee does not acquire an interest in
67-10 information, copies, or the contractual or informational rights of
67-11 the licensee unless the transfer is effective under Section 105.03
67-12 or 105.08(a)(1)(B). If the transfer is effective, the transferee
67-13 takes subject to the terms of the license.
67-14 (b) Except as otherwise provided under trade secret law, a
67-15 transferee acquires no more than the contractual interest or other
67-16 rights that the transferor was authorized to transfer.
67-17 SUBCHAPTER B. FINANCING ARRANGEMENTS
67-18 Sec. 105.07. FINANCING IF FINANCIER DOES NOT BECOME
67-19 LICENSEE. If a financier does not become a licensee in connection
67-20 with its financial accommodation contract, the following rules
67-21 apply:
67-22 (1) The financier does not receive the benefits or
67-23 burdens of the license.
67-24 (2) The licensee's rights and obligations with respect
67-25 to the information and informational rights are governed by:
67-26 (A) the license;
67-27 (B) any rights of the licensor under other law;
68-1 and
68-2 (C) to the extent not inconsistent with
68-3 Paragraphs (A) and (B), any financial accommodation contract
68-4 between the financier and the licensee, which may add additional
68-5 conditions to the licensee's right to use the licensed information
68-6 or informational rights.
68-7 Sec. 105.08. FINANCE LICENSES. (a) If a financier becomes a
68-8 licensee in connection with its financial accommodation contract
68-9 and then transfers its contractual interest under the license, or
68-10 sublicenses the licensed computer information or informational
68-11 rights, to a licensee receiving the financial accommodation, the
68-12 following rules apply:
68-13 (1) The transfer or sublicense to the accommodated
68-14 licensee is not effective unless:
68-15 (A) the transfer or sublicense is effective
68-16 under Section 105.03; or
68-17 (B) the following conditions are fulfilled:
68-18 (i) before the licensor delivered the
68-19 information or granted the license to the financier, the licensor
68-20 received notice in a record from the financier giving the name and
68-21 location of the accommodated licensee and clearly indicating that
68-22 the license was being obtained in order to transfer the contractual
68-23 interest or sublicense the licensed information or informational
68-24 rights to the accommodated licensee;
68-25 (ii) the financier became a licensee
68-26 solely to make the financial accommodation; and
68-27 (iii) the accommodated licensee adopts the
69-1 terms of the license, which terms may be supplemented by the
69-2 financial accommodation contract, to the extent the terms of the
69-3 financial accommodation contract are not inconsistent with the
69-4 license and any rights of the licensor under other law.
69-5 (2) A financier that makes a transfer that is
69-6 effective under Subdivision (1)(B) may make only the single
69-7 transfer or sublicense contemplated by the notice unless the
69-8 licensor consents to a later transfer.
69-9 (b) If a financier makes an effective transfer of its
69-10 contractual interest in a license, or an effective sublicense of
69-11 the licensed information or informational rights, to an
69-12 accommodated licensee, the following rules apply:
69-13 (1) The accommodated licensee's rights and obligations
69-14 are governed by:
69-15 (A) the license;
69-16 (B) any rights of the licensor under other law;
69-17 and
69-18 (C) to the extent not inconsistent with
69-19 Paragraphs (A) and (B), the financial accommodation contract, which
69-20 may impose additional conditions to the licensee's right to use the
69-21 licensed information or informational rights.
69-22 (2) The financier does not make warranties to the
69-23 accommodated licensee other than the warranty under Section
69-24 104.01(b)(1) and any express warranties in the financial
69-25 accommodation contract.
69-26 Sec. 105.09. FINANCING ARRANGEMENTS: OBLIGATIONS
69-27 IRREVOCABLE. Unless the accommodated licensee is a consumer, a term
70-1 in a financial accommodation contract providing that the
70-2 accommodated licensee's obligations to the financier are
70-3 irrevocable and independent is enforceable. The obligations become
70-4 irrevocable and independent upon the licensee's acceptance of the
70-5 license or the financier's giving of value, whichever occurs first.
70-6 Sec. 105.10. FINANCING ARRANGEMENTS: REMEDIES OR
70-7 ENFORCEMENT. (a) Except as otherwise provided in Subsection (b),
70-8 on material breach of a financial accommodation contract by the
70-9 accommodated licensee, the following rules apply:
70-10 (1) The financier may cancel the financial
70-11 accommodation contract.
70-12 (2) Subject to Subdivisions (3) and (4), the financier
70-13 may pursue its remedies against the accommodated licensee under the
70-14 financial accommodation contract.
70-15 (3) If the financier became a licensee and made a
70-16 transfer or sublicense that was effective under Section 105.08, it
70-17 may exercise the remedies of a licensor for breach, including the
70-18 rights of an aggrieved party under Section 108.15, subject to the
70-19 limitations of Section 108.16.
70-20 (4) If the financier did not become a licensee or did
70-21 not make a transfer that was effective under Section 105.08, it may
70-22 enforce a contractual right contained in the financial
70-23 accommodation contract to preclude the licensee's further use of
70-24 the information. However, the following rules apply:
70-25 (A) The financier has no right to take
70-26 possession of copies, use the information or informational rights,
70-27 or transfer any contractual interest in the license.
71-1 (B) If the accommodated licensee agreed to
71-2 transfer possession of copies to the financier in the event of
71-3 material breach of the financial accommodation contract, the
71-4 financier may enforce that contractual right only if permitted to
71-5 do so under Subsection (b)(1) and Section 105.03.
71-6 (b) The following additional limitations apply to a
71-7 financier's remedies under Subsection (a):
71-8 (1) A financier described in Subsection (a)(3) which
71-9 is entitled under the financial accommodation contract to take
71-10 possession or prevent use of information, copies, or related
71-11 materials may do so only if the licensor consents or if doing so
71-12 would not result in a material adverse change of the duty of the
71-13 licensor, materially increase the burden or risk imposed on the
71-14 licensor, disclose or threaten to disclose trade secrets or
71-15 confidential material of the licensor, or materially impair the
71-16 licensor's likelihood or expectation of obtaining return
71-17 performance.
71-18 (2) The financier may not otherwise exercise control
71-19 over, have access to, or sell, transfer, or otherwise use the
71-20 information or copies without the consent of the licensor unless
71-21 the financier or transferee is subject to the terms of the license
71-22 and:
71-23 (A) the licensee owns the licensed copy, the
71-24 license does not preclude transfer of the licensee's contractual
71-25 rights, and the transfer complies with federal copyright law for
71-26 the owner of a copy to make the transfer; or
71-27 (B) the license is transferable by its express
72-1 terms and the financier fulfills any conditions to, or complies
72-2 with any restrictions on, transfer.
72-3 (3) The financier's remedies under the financial
72-4 accommodation contract are subject to the licensor's rights and the
72-5 terms of the license.
72-6 Sec. 105.11. FINANCING ARRANGEMENTS: EFFECT ON LICENSOR'S
72-7 RIGHTS. (a) The creation of a financier's interest does not place
72-8 any obligations on or alter the rights of a licensor.
72-9 (b) A financier's interest does not attach to any
72-10 intellectual property rights of the licensor unless the licensor
72-11 expressly consents to such attachment in a license or another
72-12 record.
72-13 CHAPTER 106. PERFORMANCE
72-14 SUBCHAPTER A. GENERAL
72-15 Sec. 106.01. PERFORMANCE OF CONTRACT IN GENERAL. (a) A
72-16 party shall perform in a manner that conforms to the contract.
72-17 (b) If an uncured material breach of contract by one party
72-18 precedes the aggrieved party's performance, the aggrieved party
72-19 need not perform except with respect to restrictions in contractual
72-20 use terms, but the contractual use terms do not apply to
72-21 information or copies properly received or obtained from another
72-22 source. In addition, the following rules apply:
72-23 (1) The aggrieved party may refuse a performance that
72-24 is a material breach as to that performance or a performance that
72-25 may be refused under Section 107.04(b).
72-26 (2) The aggrieved party may cancel the contract only
72-27 if the breach is a material breach of the whole contract or the
73-1 agreement so provides.
73-2 (c) Except as otherwise provided in Subsection (b), tender
73-3 of performance by a party entitles the party to acceptance of that
73-4 performance. In addition, the following rules apply:
73-5 (1) A tender of performance occurs when the party,
73-6 with manifest present ability and willingness to perform, offers to
73-7 complete the performance.
73-8 (2) If a performance by the other party is due at the
73-9 time of the tendered performance, tender of the other party's
73-10 performance is a condition to the tendering party's obligation to
73-11 complete the tendered performance.
73-12 (3) A party shall pay or render the consideration
73-13 required by the agreement for a performance it accepts. A party
73-14 that accepts a performance has the burden of establishing a breach
73-15 of contract with respect to the accepted performance.
73-16 (d) Except as otherwise provided in Sections 106.03 and
73-17 106.04, in the case of a performance with respect to a copy, this
73-18 section is subject to Sections 106.06-106.10. and Sections
73-19 107.04-107.07.
73-20 Sec. 106.02. LICENSOR'S OBLIGATIONS TO ENABLE USE. (a) In
73-21 this section, "enable use" means to grant a contractual right or
73-22 permission with respect to information or informational rights and
73-23 to complete the acts, if any, required under the agreement to make
73-24 the information available to the licensee.
73-25 (b) A licensor shall enable use by the licensee pursuant to
73-26 the contract. The following rules apply to enabling use:
73-27 (1) If nothing other than the grant of a contractual
74-1 right or permission is required to enable use, the licensor enables
74-2 use when the contract becomes enforceable.
74-3 (2) If the agreement requires delivery of a copy,
74-4 enabling use occurs when the copy is tendered to the licensee.
74-5 (3) If the agreement requires delivery of a copy and
74-6 steps authorizing the licensee's use, enabling use occurs when the
74-7 last of those acts occurs.
74-8 (4) In an access contract, enabling use requires
74-9 tendering all access material necessary to enable the agreed
74-10 access.
74-11 (5) If the agreement requires a transfer of ownership
74-12 of informational rights and a filing or recording is allowed by law
74-13 to establish priority of the transferred ownership, on request by
74-14 the licensee, the licensor shall execute and tender a record
74-15 appropriate for that purpose.
74-16 Sec. 106.03. SUBMISSIONS OF INFORMATION TO SATISFACTION OF
74-17 PARTY. If an agreement requires that submitted information be to
74-18 the satisfaction of the recipient, the following rules apply:
74-19 (1) Sections 106.06-106.10 and Sections 107.04-107.07
74-20 do not apply to the submission.
74-21 (2) If the information is not satisfactory to the
74-22 recipient and the parties engage in efforts to correct the
74-23 deficiencies in a manner and over a time consistent with the
74-24 ordinary standards of the business, trade, or industry, neither the
74-25 efforts nor the passage of time required for the efforts is an
74-26 acceptance or a refusal of the submission.
74-27 (3) Except as otherwise provided in Subdivision (4),
75-1 neither refusal nor acceptance occurs unless the recipient
75-2 expressly refuses or accepts the submitted information, but the
75-3 recipient may not use the submitted information before acceptance.
75-4 (4) Silence and a failure to act in reference to a
75-5 submission beyond a commercially reasonable time to respond entitle
75-6 the submitting party to demand, in a record delivered to the
75-7 recipient, a decision on the submission. If the recipient fails to
75-8 respond within a reasonable time after receipt of the demand, the
75-9 submission is deemed to have been refused.
75-10 Sec. 106.04. IMMEDIATELY COMPLETED PERFORMANCE. If a
75-11 performance involves delivery of information or services which,
75-12 because of their nature, may provide a licensee, immediately on
75-13 performance or delivery, with substantially all the benefit of the
75-14 performance or with other significant benefit that cannot be
75-15 returned, the following rules apply:
75-16 (1) Sections 106.07-106.10 and Sections 107.04-107.07
75-17 do not apply.
75-18 (2) The rights of the parties are determined under
75-19 Section 106.01 and the ordinary standards of the business, trade,
75-20 or industry.
75-21 (3) Before tender of the performance, a party entitled
75-22 to receive the tender may inspect the media, labels, or packaging
75-23 but may not view the information or otherwise receive the
75-24 performance before completing any performance of its own that is
75-25 then due.
75-26 Sec. 106.05. ELECTRONIC REGULATION OF PERFORMANCE. (a) In
75-27 this section, "automatic restraint" means a program, code, device,
76-1 or similar electronic or physical limitation the intended purpose
76-2 of which is to restrict use of information.
76-3 (b) A party entitled to enforce a limitation on use of
76-4 information may include an automatic restraint in the information
76-5 or a copy of it and use that restraint if:
76-6 (1) a term of the agreement authorizes use of the
76-7 restraint;
76-8 (2) the restraint prevents a use that is inconsistent
76-9 with the agreement;
76-10 (3) the restraint prevents use after expiration of the
76-11 stated duration of the contract or a stated number of uses; or
76-12 (4) the restraint prevents use after the contract
76-13 terminates, other than on expiration of a stated duration or number
76-14 of uses, and the licensor gives reasonable notice to the licensee
76-15 before further use is prevented.
76-16 (c) This section does not authorize an automatic restraint
76-17 that affirmatively prevents or makes impracticable a licensee's
76-18 access to its own information or information of a third party,
76-19 other than the licensor, if that information is in the possession
76-20 of the licensee or a third party and accessed without use of the
76-21 licensor's information or informational rights.
76-22 (d) A party that includes or uses an automatic restraint
76-23 consistent with Subsection (b) or (c) is not liable for any loss
76-24 caused by the use of the restraint.
76-25 (e) This section does not preclude electronic replacement or
76-26 disabling of an earlier copy of information by the licensor in
76-27 connection with delivery of a new copy or version under an
77-1 agreement to replace or disable the earlier copy by electronic
77-2 means with an upgrade or other new information.
77-3 (f) This section does not authorize use of an automatic
77-4 restraint to enforce remedies in the event of breach of contract or
77-5 of cancellation for breach.
77-6 SUBCHAPTER B. PERFORMANCE IN DELIVERY OF COPIES
77-7 Sec. 106.06. COPY: DELIVERY; TENDER OF DELIVERY. (a)
77-8 Delivery of a copy must be at the location designated by agreement.
77-9 In the absence of a designation, the following rules apply:
77-10 (1) The place for delivery of a copy on a tangible
77-11 medium is the tendering party's place of business or, if it has
77-12 none, its residence. However, if the parties know at the time of
77-13 contracting that the copy is located in some other place, that
77-14 place is the place for delivery.
77-15 (2) The place for electronic delivery of a copy is an
77-16 information processing system designated or used by the licensor.
77-17 (3) Documents of title may be delivered through
77-18 customary banking channels.
77-19 (b) Tender of delivery of a copy requires the tendering
77-20 party to put and hold a conforming copy at the other party's
77-21 disposition and give the other party any notice reasonably
77-22 necessary to enable it to obtain access to, control of, or
77-23 possession of the copy. Tender must be at a reasonable hour and,
77-24 if applicable, requires tender of access material and other
77-25 documents required by the agreement. The party receiving tender
77-26 shall furnish facilities reasonably suited to receive tender. In
77-27 addition, the following rules apply:
78-1 (1) If the contract requires delivery of a copy held
78-2 by a third person without being moved, the tendering party shall
78-3 tender access material or documents required by the agreement.
78-4 (2) If the tendering party is required or authorized
78-5 to send a copy to the other party and the contract does not require
78-6 the tendering party to deliver the copy at a particular
78-7 destination, the following rules apply:
78-8 (A) In tendering delivery of a copy on a
78-9 tangible medium, the tendering party shall put the copy in the
78-10 possession of a carrier and make a contract for its transportation
78-11 that is reasonable in light of the nature of the information and
78-12 other circumstances, with expenses of transportation to be borne by
78-13 the receiving party.
78-14 (B) In tendering electronic delivery of a copy,
78-15 the tendering party shall initiate or cause to have initiated a
78-16 transmission that is reasonable in light of the nature of the
78-17 information and other circumstances, with expenses of transmission
78-18 to be borne by the receiving party.
78-19 (3) If the tendering party is required to deliver a
78-20 copy at a particular destination, the tendering party shall make a
78-21 copy available at that destination and bear the expenses of
78-22 transportation or transmission.
78-23 Sec. 106.07. COPY: PERFORMANCE RELATED TO DELIVERY; PAYMENT.
78-24 (a) If performance requires delivery of a copy, the following
78-25 rules apply:
78-26 (1) The party required to deliver need not complete a
78-27 tendered delivery until the receiving party tenders any performance
79-1 then due.
79-2 (2) Tender of delivery is a condition of the other
79-3 party's duty to accept the copy and entitles the tendering party
79-4 to acceptance of the copy.
79-5 (b) If payment is due on delivery of a copy, the following
79-6 rules apply:
79-7 (1) Tender of delivery is a condition of the receiving
79-8 party's duty to pay and entitles the tendering party to payment
79-9 according to the contract.
79-10 (2) All copies required by the contract must be
79-11 tendered in a single delivery, and payment is due only on tender.
79-12 (c) If the circumstances give either party the right to make
79-13 or demand delivery in lots, the contract fee, if it can be
79-14 apportioned, may be demanded for each lot.
79-15 (d) If payment is due and demanded on delivery of a copy or
79-16 on delivery of a document of title, the right of the party
79-17 receiving tender to retain or dispose of the copy or document, as
79-18 against the tendering party, is conditioned on making the payment
79-19 due.
79-20 Sec. 106.08. COPY: RIGHT TO INSPECT; PAYMENT BEFORE
79-21 INSPECTION. (a) Except as otherwise provided in Sections 106.03
79-22 and 106.04, if performance requires delivery of a copy, the
79-23 following rules apply:
79-24 (1) Except as otherwise provided in this section, the
79-25 party receiving the copy has a right before payment or acceptance
79-26 to inspect the copy at a reasonable place and time and in a
79-27 reasonable manner to determine conformance to the contract.
80-1 (2) The party making the inspection shall bear the
80-2 expenses of inspection.
80-3 (3) A place or method of inspection or an acceptance
80-4 standard fixed by the parties is presumed to be exclusive. However,
80-5 the fixing of a place, method, or standard does not postpone
80-6 identification to the contract or shift the place for delivery,
80-7 passage of title, or risk of loss. If compliance with the place or
80-8 method becomes impossible, inspection must be made as provided in
80-9 this section unless the place or method fixed by the parties was an
80-10 indispensable condition the failure of which voids the contract.
80-11 (4) A party's right to inspect is subject to existing
80-12 obligations of confidentiality.
80-13 (b) If a right to inspect exists under Subsection (a) but
80-14 the agreement is inconsistent with an opportunity to inspect before
80-15 payment, the party does not have a right to inspect before payment.
80-16 (c) If a contract requires payment before inspection of a
80-17 copy, nonconformity in the tender does not excuse the party
80-18 receiving the tender from making payment unless:
80-19 (1) the nonconformity appears without inspection and
80-20 would justify refusal under Section 107.04; or
80-21 (2) despite tender of the required documents, the
80-22 circumstances would justify an injunction against honor of a letter
80-23 of credit under Chapter 5.
80-24 (d) Payment made under circumstances described in Subsection
80-25 (b) or (c) is not an acceptance of the copy and does not impair a
80-26 party's right to inspect or preclude any of the party's remedies.
80-27 Sec. 106.09. COPY: WHEN ACCEPTANCE OCCURS. (a) Acceptance
81-1 of a copy occurs when the party to which the copy is tendered:
81-2 (1) signifies, or acts with respect to the copy in a
81-3 manner that signifies, that the tender was conforming or that the
81-4 party will take or retain the copy despite the nonconformity;
81-5 (2) does not make an effective refusal;
81-6 (3) commingles the copy or the information in a manner
81-7 that makes compliance with the party's duties after refusal
81-8 impossible;
81-9 (4) obtains a substantial benefit from the copy and
81-10 cannot return that benefit; or
81-11 (5) acts in a manner inconsistent with the licensor's
81-12 ownership, but the act is an acceptance only if the licensor elects
81-13 to treat it as an acceptance and ratifies the act to the extent it
81-14 was within contractual use terms.
81-15 (b) Except in cases governed by Subsection (a)(3) or (4), if
81-16 there is a right to inspect under Section 106.08 or the agreement,
81-17 acceptance of a copy occurs only after the party has had a
81-18 reasonable opportunity to inspect the copy.
81-19 (c) If an agreement requires delivery in stages involving
81-20 separate portions that taken together comprise the whole of the
81-21 information, acceptance of any stage is conditional until
81-22 acceptance of the whole.
81-23 Sec. 106.10. COPY: EFFECT OF ACCEPTANCE; BURDEN OF
81-24 ESTABLISHING; NOTICE OF CLAIMS. (a) A party accepting a copy shall
81-25 pay or render the consideration required by the agreement for the
81-26 copy it accepts. Acceptance of a copy precludes refusal and, if
81-27 made with knowledge of a nonconformity in a tender, may not be
82-1 revoked because of the nonconformity unless acceptance was on the
82-2 reasonable assumption that the nonconformity would be seasonably
82-3 cured. Acceptance by itself does not impair any other remedy for
82-4 nonconformity.
82-5 (b) A party accepting a copy has the burden of establishing
82-6 a breach of contract with respect to the copy.
82-7 (c) If a copy has been accepted, the accepting party shall:
82-8 (1) except with respect to claims of a type described
82-9 in Section 108.05(d)(1), within a reasonable time after it
82-10 discovers or should have discovered a breach of contract, notify
82-11 the other party of the breach or be barred from any remedy for the
82-12 breach; and
82-13 (2) if the claim is for breach of a warranty regarding
82-14 noninfringement and the accepting party is sued by a third party
82-15 because of the breach, notify the warrantor within a reasonable
82-16 time after receiving notice of the litigation or be precluded from
82-17 any remedy over for the liability established by the litigation.
82-18 SUBCHAPTER C. SPECIAL TYPES OF CONTRACTS
82-19 Sec. 106.11. ACCESS CONTRACTS. (a) If an access contract
82-20 provides for access over a period of time, the following rules
82-21 apply:
82-22 (1) The licensee's rights of access are to the
82-23 information as modified and made commercially available by the
82-24 licensor from time to time during that period.
82-25 (2) A change in the content of the information is a
82-26 breach of contract only if the change conflicts with an express
82-27 term of the agreement.
83-1 (3) Unless it is subject to a contractual use term,
83-2 information obtained by the licensee is free of any use restriction
83-3 other than a restriction resulting from the informational rights of
83-4 another person or other law.
83-5 (4) Access must be available:
83-6 (A) at times and in a manner conforming to the
83-7 express terms of the agreement; and
83-8 (B) to the extent not expressly stated in the
83-9 agreement, at times and in a manner reasonable for the particular
83-10 type of contract in light of the ordinary standards of the
83-11 business, trade, or industry.
83-12 (b) In an access contract that gives the licensee a right of
83-13 access at times substantially of its own choosing during agreed
83-14 periods, an occasional failure to have access available during
83-15 those times is not a breach of contract if it is:
83-16 (1) consistent with ordinary standards of the
83-17 business, trade, or industry for the particular type of contract;
83-18 or
83-19 (2) caused by:
83-20 (A) scheduled downtime;
83-21 (B) reasonable needs for maintenance;
83-22 (C) reasonable periods of failure of equipment,
83-23 computer programs, or communications; or
83-24 (D) events reasonably beyond the licensor's
83-25 control, and the licensor exercises such commercially reasonable
83-26 efforts as the circumstances require.
83-27 Sec. 106.12. CORRECTION AND SUPPORT CONTRACTS. (a) If a
84-1 person agrees to provide services regarding the correction of
84-2 performance problems in computer information, other than an
84-3 agreement to cure its own existing breach of contract, the
84-4 following rules apply:
84-5 (1) If the services are provided by a licensor of the
84-6 information as part of a limited remedy, the licensor undertakes
84-7 that its performance will provide the licensee with information
84-8 that conforms to the agreement to which the limited remedy applies.
84-9 (2) In all other cases, the person:
84-10 (A) shall perform at a time and place and in a
84-11 manner consistent with the express terms of the agreement and, to
84-12 the extent not stated in the express terms, at a time and place and
84-13 in a manner that is reasonable in light of ordinary standards of
84-14 the business, trade, or industry; and
84-15 (B) does not undertake that its services will
84-16 correct performance problems unless the agreement expressly so
84-17 provides.
84-18 (b) Unless required to do so by an express or implied
84-19 warranty, a licensor is not required to provide instruction or
84-20 other support for the licensee's use of information or access. A
84-21 person that agrees to provide support shall make the support
84-22 available in a manner and with a quality consistent with express
84-23 terms of the support agreement and, to the extent not stated in the
84-24 express terms, at a time and place and in a manner that is
84-25 reasonable in light of ordinary standards of the business, trade,
84-26 or industry.
84-27 Sec. 106.13. CONTRACTS INVOLVING PUBLISHERS, DEALERS, AND
85-1 END USERS. (a) In this section:
85-2 (1) "Dealer" means a merchant licensee that receives
85-3 information directly or indirectly from a licensor for sale or
85-4 license to end users.
85-5 (2) "End user" means a licensee that acquires a copy
85-6 of the information from a dealer by delivery on a tangible medium
85-7 for the licensee's own use and not for sale, license, transmission
85-8 to third persons, or public display or performance for a fee.
85-9 (3) "Publisher" means a licensor, other than a dealer,
85-10 that offers a license to an end user with respect to information
85-11 distributed by a dealer to the end user.
85-12 (b) In a contract between a dealer and an end user, if the
85-13 end user's right to use the information or informational rights is
85-14 subject to a license by the publisher and there was no opportunity
85-15 to review the license before the end user became obligated to pay
85-16 the dealer, the following rules apply:
85-17 (1) The contract between the end user and the dealer
85-18 is conditioned on the end user's agreement to the publisher's
85-19 license.
85-20 (2) If the end user does not agree, such as by
85-21 manifesting assent, to the terms of the publisher's license, the
85-22 end user has a right to a return from the dealer. A right under
85-23 this subdivision is a return for purposes of Sections 101.12,
85-24 102.08, and 102.09.
85-25 (3) The dealer is not bound by the terms, and does not
85-26 receive the benefits, of an agreement between the publisher and the
85-27 end user unless the dealer and end user adopt those terms as part
86-1 of the agreement.
86-2 (c) If an agreement provides for distribution of copies on a
86-3 tangible medium or in packaging provided by the publisher or an
86-4 authorized third party, a dealer may distribute those copies and
86-5 documentation only:
86-6 (1) in the form as received; and
86-7 (2) subject to the terms of any license that the
86-8 publisher provides to the dealer to be furnished to end users.
86-9 (d) A dealer that enters into an agreement with an end user
86-10 is a licensor with respect to the end user under this title.
86-11 SUBCHAPTER D. LOSS AND IMPOSSIBILITY
86-12 Sec. 106.14. RISK OF LOSS OF COPY. (a) Except as otherwise
86-13 provided in this section, the risk of loss as to a copy that is to
86-14 be delivered to a licensee, including a copy delivered by
86-15 electronic means, passes to the licensee upon its receipt of the
86-16 copy.
86-17 (b) If an agreement requires or authorizes a licensor to
86-18 send a copy on a tangible medium by carrier, the following rules
86-19 apply:
86-20 (1) If the agreement does not require the licensor to
86-21 deliver the copy at a particular destination, the risk of loss
86-22 passes to the licensee when the copy is duly delivered to the
86-23 carrier, even if the shipment is under reservation.
86-24 (2) If the agreement requires the licensor to deliver
86-25 the copy at a particular destination and the copy is duly tendered
86-26 there in the possession of the carrier, the risk of loss passes to
86-27 the licensee when the copy is tendered at that destination.
87-1 (3) If a tender of delivery of a copy or a shipping
87-2 document fails to conform to the contract, the risk of loss remains
87-3 with the licensor until cure or acceptance.
87-4 (c) If a copy is held by a third party to be delivered or
87-5 reproduced without being moved or a copy is to be delivered by
87-6 making access available to a third party resource containing a
87-7 copy, the risk of loss passes to the licensee upon:
87-8 (1) the licensee's receipt of a negotiable document of
87-9 title or other access materials covering the copy;
87-10 (2) acknowledgment by the third party to the licensee
87-11 of the licensee's right to possession of or access to the copy; or
87-12 (3) the licensee's receipt of a record directing the
87-13 third party, pursuant to an agreement between the licensor and the
87-14 third party, to make delivery or authorizing the third party to
87-15 allow access.
87-16 Sec. 106.15. EXCUSE BY FAILURE OF PRESUPPOSED CONDITIONS.
87-17 (a) Unless a party has assumed a different obligation, delay in
87-18 performance by a party, or nonperformance in whole or part by a
87-19 party, other than of an obligation to make payments or to conform
87-20 to contractual use terms, is not a breach of contract if the delay
87-21 or nonperformance is of a performance that has been made
87-22 impracticable by:
87-23 (1) the occurrence of a contingency the nonoccurrence
87-24 of which was a basic assumption on which the contract was made; or
87-25 (2) compliance in good faith with any foreign or
87-26 domestic statute, governmental rule, regulation, or order, whether
87-27 or not it later proves to be invalid.
88-1 (b) A party claiming excuse under Subsection (a) shall
88-2 seasonably notify the other party that there will be delay or
88-3 nonperformance.
88-4 (c) If an excuse affects only a part of a party's capacity
88-5 to perform an obligation for delivery of copies, the party claiming
88-6 excuse shall allocate performance among its customers in any manner
88-7 that is fair and reasonable and notify the other party of the
88-8 estimated quota to be made available. In making the allocation,
88-9 the party claiming excuse may include the requirements of regular
88-10 customers not then under contract and its own requirements.
88-11 (d) A party that receives notice pursuant to Subsection (b)
88-12 of a material or indefinite delay in delivery of copies or of an
88-13 allocation under Subsection (c), by notice in a record, may:
88-14 (1) terminate and thereby discharge any executory
88-15 portion of the contract; or
88-16 (2) modify the contract by agreeing to take the
88-17 available allocation in substitution.
88-18 (e) If, after receipt of notice under Subsection (b), a
88-19 party does not modify the contract within a reasonable time not
88-20 exceeding 30 days, the contract lapses with respect to any
88-21 performance affected.
88-22 SUBCHAPTER E. TERMINATION
88-23 Sec. 106.16. TERMINATION: SURVIVAL OF OBLIGATIONS. (a)
88-24 Except as otherwise provided in Subsection (b), on termination all
88-25 obligations that are still executory on both sides are discharged.
88-26 (b) The following survive termination:
88-27 (1) a right based on previous breach or performance of
89-1 the contract;
89-2 (2) an obligation of confidentiality, nondisclosure,
89-3 or noncompetition to the extent enforceable under other law;
89-4 (3) a contractual use term applicable to any licensed
89-5 copy or information received from the other party, or copies made
89-6 of it, which are not returned or returnable to the other party;
89-7 (4) an obligation to deliver, or dispose of
89-8 information, materials, documentation, copies, records, or the like
89-9 to the other party, an obligation to destroy copies, or a right to
89-10 obtain information from an escrow agent;
89-11 (5) a choice of law or forum;
89-12 (6) an obligation to arbitrate or otherwise resolve
89-13 disputes by alternative dispute resolution procedures;
89-14 (7) a term limiting the time for commencing an action
89-15 or for giving notice;
89-16 (8) an indemnity term or a right related to a claim of
89-17 a type described in Section 108.05(d)(1);
89-18 (9) a limitation of remedy or modification or
89-19 disclaimer of warranty;
89-20 (10) an obligation to provide an accounting and make
89-21 any payment due under the accounting; and
89-22 (11) any term that the agreement provides will
89-23 survive.
89-24 Sec. 106.17. NOTICE OF TERMINATION. (a) Except as
89-25 otherwise provided in Subsection (b), a party may not terminate a
89-26 contract except on the happening of an agreed event, such as the
89-27 expiration of the stated duration, unless the party gives
90-1 reasonable notice of termination to the other party.
90-2 (b) An access contract may be terminated without giving
90-3 notice. However, except on the happening of an agreed event,
90-4 termination requires giving reasonable notice to the licensee if
90-5 the access contract pertains to information owned and provided by
90-6 the licensee to the licensor.
90-7 (c) A term dispensing with a notice required under this
90-8 section is invalid if its operation would be unconscionable.
90-9 However, a term specifying standards for giving notice is
90-10 enforceable if the standards are not manifestly unreasonable.
90-11 Sec. 106.18. TERMINATION: ENFORCEMENT. (a) On termination
90-12 of a license, a party in possession or control of information,
90-13 copies, or other materials that are the property of the other
90-14 party, or are subject to a contractual obligation to be delivered
90-15 to that party on termination, shall use commercially reasonable
90-16 efforts to deliver or hold them for disposal on instructions of
90-17 that party. If any materials are jointly owned, the party in
90-18 possession or control shall make them available to the joint
90-19 owners.
90-20 (b) Termination of a license ends all right under the
90-21 license for the licensee to use or access the licensed information,
90-22 informational rights, or copies. Continued use of the licensed
90-23 copies or exercise of terminated rights is a breach of contract
90-24 unless authorized by a term that survives termination.
90-25 (c) Each party may enforce its rights under Subsections (a)
90-26 and (b) by acting pursuant to Section 106.05 or by judicial
90-27 process, including obtaining an order that the party or an officer
91-1 of the court take the following actions with respect to any
91-2 licensed information, documentation, copies, or other materials to
91-3 be delivered:
91-4 (1) deliver or take possession of them;
91-5 (2) without removal, render unusable or eliminate the
91-6 capability to exercise contractual rights in or use of them;
91-7 (3) destroy or prevent access to them; and
91-8 (4) require that the party or any other person in
91-9 possession or control of them make them available to the other
91-10 party at a place designated by that party which is reasonably
91-11 convenient to both parties.
91-12 (d) In an appropriate case, a court of competent
91-13 jurisdiction may grant injunctive relief to enforce the parties'
91-14 rights under this section.
91-15 CHAPTER 107. BREACH OF CONTRACT
91-16 SUBCHAPTER A. GENERAL
91-17 Sec. 107.01. BREACH OF CONTRACT; MATERIAL BREACH. (a)
91-18 Whether a party is in breach of contract is determined by the
91-19 agreement or, in the absence of agreement, this title. A breach
91-20 occurs if a party without legal excuse fails to perform an
91-21 obligation in a timely manner, repudiates a contract, or exceeds a
91-22 contractual use term, or otherwise is not in compliance with an
91-23 obligation placed on it by this title or the agreement. A breach,
91-24 whether or not material, entitles the aggrieved party to its
91-25 remedies. Whether a breach of a contractual use term is an
91-26 infringement or a misappropriation is determined by applicable
91-27 informational property rights law.
92-1 (b) A breach of contract is material if:
92-2 (1) the contract so provides;
92-3 (2) the breach is a substantial failure to perform a
92-4 term that is an essential element of the agreement; or
92-5 (3) the circumstances, including the language of the
92-6 agreement, the reasonable expectations of the parties, the
92-7 standards and practices of the business, trade, or industry, and
92-8 the character of the breach, indicate that:
92-9 (A) the breach caused or is likely to cause
92-10 substantial harm to the aggrieved party; or
92-11 (B) the breach substantially deprived or is
92-12 likely substantially to deprive the aggrieved party of a
92-13 significant benefit it reasonably expected under the contract.
92-14 (c) The cumulative effect of nonmaterial breaches may be
92-15 material.
92-16 Sec. 107.02. WAIVER OF REMEDY FOR BREACH OF CONTRACT. (a)
92-17 A claim or right arising out of a breach of contract may be
92-18 discharged in whole or part without consideration by a waiver in a
92-19 record to which the party making the waiver agrees after breach,
92-20 such as by manifesting assent, or which the party making the waiver
92-21 authenticates and delivers to the other party.
92-22 (b) A party that accepts a performance with knowledge that
92-23 the performance constitutes a breach of contract and, within a
92-24 reasonable time after acceptance, does not notify the other party
92-25 of the breach waives all remedies for the breach, unless acceptance
92-26 was made on the reasonable assumption that the breach would be
92-27 cured and it has not been seasonably cured. However, a party that
93-1 seasonably notifies the other party of a reservation of rights does
93-2 not waive the rights reserved.
93-3 (c) A party that refuses a performance and fails to identify
93-4 a particular defect that is ascertainable by reasonable inspection
93-5 waives the right to rely on that defect to justify refusal only if:
93-6 (1) the other party could have cured the defect if it
93-7 were identified seasonably; or
93-8 (2) between merchants, the other party after refusal
93-9 made a request in a record for a full and final statement of all
93-10 defects on which the refusing party relied.
93-11 (d) Waiver of a remedy for breach of contract in one
93-12 performance does not waive any remedy for the same or a similar
93-13 breach in future performances unless the party making the waiver
93-14 expressly so states.
93-15 (e) A waiver may not be retracted as to the performance to
93-16 which the waiver applies.
93-17 (f) Except for a waiver in accordance with Subsection (a) or
93-18 a waiver supported by consideration, a waiver affecting an
93-19 executory portion of a contract may be retracted by seasonable
93-20 notice received by the other party that strict performance will be
93-21 required in the future, unless the retraction would be unjust in
93-22 view of a material change of position in reliance on the waiver by
93-23 that party.
93-24 Sec. 107.03. CURE OF BREACH OF CONTRACT. (a) A party in
93-25 breach of contract may cure the breach at its own expense if:
93-26 (1) the time for performance has not expired and the
93-27 party in breach seasonably notifies the aggrieved party of its
94-1 intent to cure and, within the time for performance, makes a
94-2 conforming performance;
94-3 (2) the party in breach had reasonable grounds to
94-4 believe the performance would be acceptable with or without
94-5 monetary allowance, seasonably notifies the aggrieved party of its
94-6 intent to cure, and provides a conforming performance within a
94-7 further reasonable time after performance was due; or
94-8 (3) in a case not governed by Subdivision (1) or (2),
94-9 the party in breach seasonably notifies the aggrieved party of its
94-10 intent to cure and promptly provides a conforming performance
94-11 before cancellation by the aggrieved party.
94-12 (b) In a license other than in a mass-market transaction, if
94-13 the agreement required a single delivery of a copy and the party
94-14 receiving tender of delivery was required to accept a nonconforming
94-15 copy because the nonconformity was not a material breach of
94-16 contract, the party in breach shall promptly and in good faith make
94-17 an effort to cure if:
94-18 (1) the party in breach receives seasonable notice of
94-19 the specific nonconformity and a demand for cure of it; and
94-20 (2) the cost of the effort to cure does not
94-21 disproportionately exceed the direct damages caused by the
94-22 nonconformity to the aggrieved party.
94-23 (c) A party may not cancel a contract or refuse a
94-24 performance because of a breach of contract that has been
94-25 seasonably cured under Subsection (a). However, notice of intent
94-26 to cure does not preclude refusal or cancellation for the uncured
94-27 breach.
95-1 SUBCHAPTER B. DEFECTIVE COPIES
95-2 Sec. 107.04. COPY: REFUSAL OF DEFECTIVE TENDER. (a)
95-3 Subject to Subsection (b) and Section 107.05, tender of a copy that
95-4 is a material breach of contract permits the party to which tender
95-5 is made to:
95-6 (1) refuse the tender;
95-7 (2) accept the tender; or
95-8 (3) accept any commercially reasonable units and
95-9 refuse the rest.
95-10 (b) In a mass-market transaction that calls for only a
95-11 single tender of a copy, a licensee may refuse the tender if the
95-12 tender does not conform to the contract.
95-13 (c) Refusal of a tender is ineffective unless:
95-14 (1) it is made before acceptance;
95-15 (2) it is made within a reasonable time after tender
95-16 or completion of any permitted effort to cure; and
95-17 (3) the refusing party seasonably notifies the
95-18 tendering party of the refusal.
95-19 (d) Except in a case governed by Subsection (b), a party
95-20 that rightfully refuses a tender of a copy may cancel the contract
95-21 only if the tender was a material breach of the whole contract or
95-22 the agreement so provides.
95-23 Sec. 107.05. COPY: CONTRACT WITH PREVIOUS VESTED GRANT OF
95-24 RIGHTS. If an agreement grants a right in or permission to use
95-25 informational rights which precedes or is otherwise independent of
95-26 the delivery of a copy, the following rules apply:
95-27 (1) A party may refuse a tender of a copy which is a
96-1 material breach as to that copy, but refusal of that tender does
96-2 not cancel the contract.
96-3 (2) In a case governed by Subdivision (1), the
96-4 tendering party may cure the breach by seasonably providing a
96-5 conforming copy before the breach becomes material as to the whole
96-6 contract.
96-7 (3) A breach that is material with respect to a copy
96-8 allows cancellation of the contract only if the breach cannot be
96-9 seasonably cured and is a material breach of the whole contract.
96-10 Sec. 107.06. COPY: DUTIES UPON RIGHTFUL REFUSAL. (a)
96-11 Except as otherwise provided in this section, after rightful
96-12 refusal or revocation of acceptance of a copy, the following rules
96-13 apply:
96-14 (1) If the refusing party rightfully cancels the
96-15 contract, Section 108.02 applies and all restrictions in
96-16 contractual use terms continue.
96-17 (2) If the contract is not canceled, the parties
96-18 remain bound by all contractual obligations.
96-19 (b) On rightful refusal or revocation of acceptance of a
96-20 copy, the following rules apply to the extent consistent with
96-21 Section 108.02:
96-22 (1) Any use, sale, display, performance, or transfer
96-23 of the copy or information it contains, or any failure to comply
96-24 with a contractual use term, is a breach of contract. The licensee
96-25 shall pay the licensor the reasonable value of any use. However,
96-26 use for a limited time within contractual use terms is not a
96-27 breach, and is not an acceptance under Section 106.09(a)(5), if it:
97-1 (A) occurs after the tendering party is
97-2 seasonably notified of refusal;
97-3 (B) is not for distribution and is solely part
97-4 of measures reasonable under the circumstances to avoid or reduce
97-5 loss; and
97-6 (C) is not contrary to instructions concerning
97-7 disposition of the copy received from the party in breach.
97-8 (2) A party that refuses a copy shall:
97-9 (A) deliver the copy and all copies made of it,
97-10 all access materials, and documentation pertaining to the refused
97-11 information to the tendering party or hold them with reasonable
97-12 care for a reasonable time for disposal at that party's
97-13 instructions; and
97-14 (B) follow reasonable instructions of the
97-15 tendering party for returning or delivering copies, access
97-16 material, and documentation, but instructions are not reasonable if
97-17 the tendering party does not arrange for payment of or
97-18 reimbursement for reasonable expenses of complying with the
97-19 instructions.
97-20 (3) If the tendering party does not give instructions
97-21 within a reasonable time after being notified of refusal, the
97-22 refusing party, in a reasonable manner to reduce or avoid loss, may
97-23 store the copies, access material, and documentation for the
97-24 tendering party's account or ship them to the tendering party and
97-25 is entitled to reimbursement for reasonable costs of storage and
97-26 shipment.
97-27 (4) Both parties remain bound by all contractual use
98-1 terms that would have been enforceable had the performance not been
98-2 refused.
98-3 (5) In complying with this section, the refusing party
98-4 shall act in good faith. Conduct in good faith under this section
98-5 is not acceptance or conversion and may not be a ground for an
98-6 action for damages under the contract.
98-7 Sec. 107.07. COPY: REVOCATION OF ACCEPTANCE. (a) A party
98-8 that accepts a nonconforming tender of a copy may revoke acceptance
98-9 only if the nonconformity is a material breach of contract and the
98-10 party accepted it:
98-11 (1) on the reasonable assumption that the
98-12 nonconformity would be cured, and the nonconformity was not
98-13 seasonably cured;
98-14 (2) during a continuing effort by the party in breach
98-15 at adjustment and cure, and the breach was not seasonably cured; or
98-16 (3) without discovery of the nonconformity, if
98-17 acceptance was reasonably induced either by the other party's
98-18 assurances or by the difficulty of discovery before acceptance.
98-19 (b) Revocation of acceptance is not effective until the
98-20 revoking party notifies the other party of the revocation.
98-21 (c) Revocation of acceptance of a copy is precluded if:
98-22 (1) it does not occur within a reasonable time after
98-23 the party attempting to revoke discovers or should have discovered
98-24 the ground for it;
98-25 (2) it occurs after a substantial change in condition
98-26 not caused by defects in the information, such as after the party
98-27 commingles the information in a manner that makes its return
99-1 impossible; or
99-2 (3) the party attempting to revoke received a
99-3 substantial benefit or value from the information, and the benefit
99-4 or value cannot be returned.
99-5 (d) A party that rightfully revokes has the same duties and
99-6 is under the same restrictions as if the party had refused tender
99-7 of the copy.
99-8 SUBCHAPTER C. REPUDIATION AND ASSURANCES
99-9 Sec. 107.08. ADEQUATE ASSURANCE OF PERFORMANCE. (a) A
99-10 contract imposes an obligation on each party not to impair the
99-11 other's expectation of receiving due performance. If reasonable
99-12 grounds for insecurity arise with respect to the performance of
99-13 either party, the aggrieved party may:
99-14 (1) demand in a record adequate assurance of due
99-15 performance; and
99-16 (2) until that assurance is received, if commercially
99-17 reasonable, suspend any performance, other than with respect to
99-18 restrictions in contractual use terms, for which the agreed return
99-19 performance has not been received.
99-20 (b) Between merchants, the reasonableness of grounds for
99-21 insecurity and the adequacy of any assurance offered is determined
99-22 according to commercial standards.
99-23 (c) Acceptance of any improper delivery or payment does not
99-24 impair an aggrieved party's right to demand adequate assurance of
99-25 future performance.
99-26 (d) After receipt of a justified demand under Subsection
99-27 (a), failure, within a reasonable time not exceeding 30 days, to
100-1 provide assurance of due performance which is adequate under the
100-2 circumstances of the particular case is a repudiation of the
100-3 contract under Section 107.09.
100-4 Sec. 107.09. ANTICIPATORY REPUDIATION. (a) If a party to a
100-5 contract repudiates a performance not yet due and the loss of
100-6 performance will substantially impair the value of the contract to
100-7 the other party, the aggrieved party may:
100-8 (1) await performance by the repudiating party for a
100-9 commercially reasonable time or resort to any remedy for breach of
100-10 contract, even if it has urged the repudiating party to retract the
100-11 repudiation or has notified the repudiating party that it would
100-12 await its performance; and
100-13 (2) in either case, suspend its own performance or
100-14 proceed in accordance with Section 108.12 or 108.13, as applicable.
100-15 (b) Repudiation includes language that one party will not or
100-16 cannot make a performance still due under the contract or
100-17 voluntary, affirmative conduct that reasonably appears to the other
100-18 party to make a future performance impossible.
100-19 Sec. 107.10. RETRACTION OF ANTICIPATORY REPUDIATION. (a) A
100-20 repudiating party may retract its repudiation until its next
100-21 performance is due unless the aggrieved party, after the
100-22 repudiation, has canceled the contract, materially changed its
100-23 position, or otherwise indicated that it considers the repudiation
100-24 final.
100-25 (b) A retraction may be by any method that clearly indicates
100-26 to the aggrieved party that the repudiating party intends to
100-27 perform the contract. However, a retraction must contain any
101-1 assurance justifiably demanded under Section 107.08.
101-2 (c) Retraction restores a repudiating party's rights under
101-3 the contract with due excuse and allowance to the aggrieved party
101-4 for any delay caused by the repudiation.
101-5 CHAPTER 108. REMEDIES
101-6 SUBCHAPTER A. GENERAL
101-7 Sec. 108.01. REMEDIES IN GENERAL. (a) The remedies
101-8 provided in this title are cumulative, but a party may not recover
101-9 more than once for the same loss.
101-10 (b) Except as otherwise provided in Sections 108.03 and
101-11 108.04, if a party is in breach of contract, whether or not the
101-12 breach is material, the aggrieved party has the remedies provided
101-13 in the agreement or this title, but the aggrieved party shall
101-14 continue to comply with any restrictions in contractual use terms
101-15 with respect to information or copies received from the other party
101-16 and the contractual use terms do not apply to information or copies
101-17 properly received or obtained from another source.
101-18 (c) Rescission or a claim for rescission of the contract, or
101-19 refusal of the information, does not preclude and is not
101-20 inconsistent with a claim for damages or other remedy.
101-21 Sec. 108.02. CANCELLATION. (a) An aggrieved party may
101-22 cancel a contract if there is a material breach that has not been
101-23 cured or waived or the agreement allows cancellation for the
101-24 breach.
101-25 (b) Cancellation is not effective until the canceling party
101-26 gives notice of cancellation to the party in breach, unless a delay
101-27 required to notify the party would cause or threaten material harm
102-1 or loss to the aggrieved party. The notification may be in any
102-2 form reasonable under the circumstances. However, in an access
102-3 contract, a party may cancel rights of access without notice.
102-4 (c) On cancellation, the following rules apply:
102-5 (1) If a party is in possession or control of licensed
102-6 information, documentation, materials, or copies of licensed
102-7 information, the following rules apply:
102-8 (A) A party that has rightfully refused a copy
102-9 shall comply with Section 107.06(b) as to the refused copy.
102-10 (B) A party in breach of contract which would be
102-11 subject to an obligation to deliver under Section 106.18 shall
102-12 deliver all information, documentation, materials, and copies to
102-13 the other party or hold them with reasonable care for a reasonable
102-14 time for disposal at that party's instructions. The party in
102-15 breach of contract shall follow any reasonable instructions
102-16 received from the other party.
102-17 (C) Except as otherwise provided in Paragraphs
102-18 (A) and (B), the party shall comply with Section 106.18.
102-19 (2) All obligations that are executory on both sides
102-20 at the time of cancellation are discharged, but the following
102-21 survive:
102-22 (A) any right based on previous breach or
102-23 performance; and
102-24 (B) the rights, duties, and remedies described
102-25 in Section 106.16(b).
102-26 (3) Cancellation of a license by the licensor ends any
102-27 contractual right of the licensee to use the information,
103-1 informational rights, copies, or other materials.
103-2 (4) Cancellation of a license by the licensee ends any
103-3 contractual right to use the information, informational rights,
103-4 copies, or other materials, but the licensee may use the
103-5 information for a limited time after the license has been canceled
103-6 if the use:
103-7 (A) is within contractual use terms;
103-8 (B) is not for distribution and is solely part
103-9 of measures reasonable under the circumstances to avoid or reduce
103-10 loss; and
103-11 (C) is not contrary to instructions received
103-12 from the party in breach concerning disposition of them.
103-13 (5) The licensee shall pay the licensor the reasonable
103-14 value of any use after cancellation permitted under Subdivision
103-15 (4).
103-16 (6) The obligations under this subsection apply to all
103-17 information, informational rights, documentation, materials, and
103-18 copies received by the party and any copies made therefrom.
103-19 (d) A term providing that a contract may not be canceled
103-20 precludes cancellation but does not limit other remedies.
103-21 (e) Unless a contrary intention clearly appears, an
103-22 expression such as "cancellation," "rescission," or the like may
103-23 not be construed as a renunciation or discharge of a claim in
103-24 damages for an antecedent breach.
103-25 Sec. 108.03. CONTRACTUAL MODIFICATION OF REMEDY. (a)
103-26 Except as otherwise provided in this section and in Section 108.04:
103-27 (1) an agreement may provide for remedies in addition
104-1 to or in substitution for those provided in this title and may
104-2 limit or alter the measure of damages recoverable under this title
104-3 or a party's other remedies under this title, such as by precluding
104-4 a party's right to cancel for breach of contract, limiting remedies
104-5 to returning or delivering copies and repayment of the contract
104-6 fee, or limiting remedies to repair or replacement of the
104-7 nonconforming copies; and
104-8 (2) resort to a contractual remedy is optional unless
104-9 the remedy is expressly agreed to be exclusive, in which case it is
104-10 the sole remedy.
104-11 (b) Subject to Subsection (c), if performance of an
104-12 exclusive or limited remedy causes the remedy to fail of its
104-13 essential purpose, the aggrieved party may pursue other remedies
104-14 under this title.
104-15 (c) Failure or unconscionability of an agreed exclusive or
104-16 limited remedy makes a term disclaiming or limiting consequential
104-17 or incidental damages unenforceable unless the agreement expressly
104-18 makes the disclaimer or limitation independent of the agreed
104-19 remedy.
104-20 (d) Consequential damages and incidental damages may be
104-21 excluded or limited by agreement unless the exclusion or limitation
104-22 is unconscionable. Exclusion or limitation of consequential
104-23 damages for personal injury in a consumer contract for a computer
104-24 program that is subject to this title and is contained in consumer
104-25 goods is prima facie unconscionable, but exclusion or limitation of
104-26 damages for a commercial loss is not unconscionable.
104-27 Sec. 108.04. LIQUIDATION OF DAMAGES. (a) Damages for
105-1 breach of contract by either party may be liquidated by agreement
105-2 in an amount that is reasonable in light of:
105-3 (1) the loss anticipated at the time of contracting;
105-4 (2) the actual loss; or
105-5 (3) the actual or anticipated difficulties of proving
105-6 loss in the event of breach.
105-7 (b) If a term liquidating damages is unenforceable under
105-8 this section, the aggrieved party may pursue the remedies provided
105-9 in this title, except as limited by other terms of the contract.
105-10 (c) If a party justifiably withholds delivery of copies
105-11 because of the other party's breach of contract, the party in
105-12 breach is entitled to restitution for any amount by which the sum
105-13 of the payments it made for the copies exceeds the amount of the
105-14 liquidated damages payable to the aggrieved party in accordance
105-15 with Subsection (a). The right to restitution is subject to offset
105-16 to the extent that the aggrieved party establishes:
105-17 (1) a right to recover damages other than under
105-18 Subsection (a); and
105-19 (2) the amount or value of any benefits received by
105-20 the party in breach, directly or indirectly, by reason of the
105-21 contract.
105-22 (d) A term that does not liquidate damages, but that limits
105-23 damages available to the aggrieved party, must be evaluated under
105-24 Section 108.03.
105-25 Sec. 108.05. LIMITATION OF ACTIONS. (a) Except as
105-26 otherwise provided in Subsection (b), an action for breach of
105-27 contract must be commenced within the later of four years after the
106-1 right of action accrues or one year after the breach was or should
106-2 have been discovered, but not later than five years after the right
106-3 of action accrues.
106-4 (b) If the original agreement of the parties alters the
106-5 period of limitations, the following rules apply:
106-6 (1) The parties may reduce the period of limitations
106-7 to not less than one year after the right of action accrues but may
106-8 not extend it.
106-9 (2) In a consumer contract, the period of limitations
106-10 may not be reduced.
106-11 (c) Except as otherwise provided in Subsection (d), a right
106-12 of action accrues when the act or omission constituting a breach of
106-13 contract occurs, even if the aggrieved party did not know of the
106-14 breach. A right of action for breach of warranty accrues when
106-15 tender of delivery of a copy pursuant to Section 106.06, or access
106-16 to the information, occurs. However, if the warranty expressly
106-17 extends to future performance of the information or a copy, the
106-18 right of action accrues when the performance fails to conform to
106-19 the warranty, but not later than the date the warranty expires.
106-20 (d) In the following cases, a right of action accrues on the
106-21 later of the date the act or omission constituting the breach of
106-22 contract occurred or the date on which it was or should have been
106-23 discovered by the aggrieved party, but not earlier than the date
106-24 for delivery of a copy if the claim relates to information in the
106-25 copy:
106-26 (1) a breach of warranty against third-party claims
106-27 for:
107-1 (A) infringement or misappropriation; or
107-2 (B) libel, slander, or the like;
107-3 (2) a breach of contract involving a party's
107-4 disclosure or misuse of confidential information; or
107-5 (3) a failure to provide an indemnity or to perform
107-6 another obligation to protect or defend against a third-party
107-7 claim.
107-8 (e) If an action commenced within the period of limitation
107-9 is so concluded as to leave available a remedy by another action
107-10 for the same breach of contract, the other action may be commenced
107-11 after expiration of the period of limitation if the action is
107-12 commenced within six months after conclusion of the first action,
107-13 unless the action was concluded as a result of voluntary
107-14 discontinuance or dismissal for failure or neglect to prosecute.
107-15 (f) This section does not alter the law on tolling of the
107-16 statute of limitations and does not apply to a right of action that
107-17 accrued before the effective date of this title.
107-18 Sec. 108.06. REMEDIES FOR FRAUD. Remedies for material
107-19 misrepresentation or fraud include all remedies available under
107-20 this title for nonfraudulent breach of contract.
107-21 SUBCHAPTER B. DAMAGES
107-22 Sec. 108.07. MEASUREMENT OF DAMAGES IN GENERAL. (a) Except
107-23 as otherwise provided in the contract, an aggrieved party may not
107-24 recover compensation for that part of a loss which could have been
107-25 avoided by taking measures reasonable under the circumstances to
107-26 avoid or reduce loss. The burden of establishing a failure of the
107-27 aggrieved party to take measures reasonable under the circumstances
108-1 is on the party in breach of contract.
108-2 (b) A party may not recover:
108-3 (1) consequential damages for losses resulting from
108-4 the content of published informational content unless the agreement
108-5 expressly so provides; or
108-6 (2) damages that are speculative.
108-7 (c) The remedy for breach of contract for disclosure or
108-8 misuse of information that is a trade secret or in which the
108-9 aggrieved party has a right of confidentiality includes as
108-10 consequential damages compensation for the benefit obtained as a
108-11 result of the breach.
108-12 (d) For purposes of this title, market value is determined
108-13 as of the date of breach of contract and the place for performance.
108-14 (e) Damages or expenses that relate to events after the date
108-15 of entry of judgment must be reduced to their present value as of
108-16 that date. In this subsection, "present value" means the amount,
108-17 as of a date certain, of one or more sums payable in the future or
108-18 the value of one or more performances due in the future, discounted
108-19 to the date certain. The discount is determined by the interest
108-20 rate specified by the parties in their agreement unless that rate
108-21 was manifestly unreasonable when the agreement was entered into.
108-22 Otherwise, the discount is determined by a commercially reasonable
108-23 rate that takes into account the circumstances of each case when
108-24 the agreement was entered into.
108-25 Sec. 108.08. LICENSOR'S DAMAGES. (a) In this section,
108-26 "substitute transaction" means a transaction by the licensor which
108-27 would not have been possible except for the licensee's breach and
109-1 which transaction is for the same information or informational
109-2 rights with the same contractual use terms as the transaction to
109-3 which the licensee's breach applies.
109-4 (b) Except as otherwise provided in Section 108.07, a breach
109-5 of contract by a licensee entitles the licensor to recover the
109-6 following compensation for losses resulting in the ordinary course
109-7 from the breach, less expenses avoided as a result of the breach,
109-8 to the extent not otherwise accounted for under this subsection:
109-9 (1) damages measured in any combination of the
109-10 following ways but not to exceed the contract fee and the market
109-11 value of other consideration required under the contract for the
109-12 performance that was the subject of the breach:
109-13 (A) the amount of accrued and unpaid contract
109-14 fees and the market value of other consideration earned but not
109-15 received for:
109-16 (i) any performance accepted by the
109-17 licensee; and
109-18 (ii) any performance to which Section
109-19 106.04 applies;
109-20 (B) for performances not governed by Paragraph
109-21 (A), if the licensee repudiated or wrongfully refused the
109-22 performance or the licensor rightfully canceled and the breach
109-23 makes possible a substitute transaction, the amount of loss as
109-24 determined by contract fees and the market value of other
109-25 consideration required under the contract for the performance less:
109-26 (i) the contract fees and market value of
109-27 other consideration received from an actual and commercially
110-1 reasonable substitute transaction entered into by the licensor in
110-2 good faith and without unreasonable delay; or
110-3 (ii) the market value of a commercially
110-4 reasonable hypothetical substitute transaction;
110-5 (C) for performances not governed by Paragraph
110-6 (A), if the breach does not make possible a substitute transaction,
110-7 lost profit, including reasonable overhead, that the licensor would
110-8 have realized on acceptance and full payment for performance that
110-9 was not delivered to the licensee because of the licensee's breach;
110-10 or
110-11 (D) damages calculated in any reasonable manner;
110-12 and
110-13 (2) consequential and incidental damages.
110-14 Sec. 108.09. LICENSEE'S DAMAGES. (a) Subject to Subsection
110-15 (b) and except as otherwise provided in Section 108.07, a breach of
110-16 contract by a licensor entitles the licensee to recover the
110-17 following compensation for losses resulting in the ordinary course
110-18 from the breach or, if appropriate, as to the whole contract, less
110-19 expenses avoided as a result of the breach to the extent not
110-20 otherwise accounted for under this section:
110-21 (1) damages measured in any combination of the
110-22 following ways, but not to exceed the market value of the
110-23 performance that was the subject of the breach plus restitution of
110-24 any amounts paid for performance not received and not accounted for
110-25 within the indicated recovery:
110-26 (A) with respect to performance that has been
110-27 accepted and the acceptance not rightfully revoked, the value of
111-1 the performance required less the value of the performance accepted
111-2 as of the time and place of acceptance;
111-3 (B) with respect to performance that has not
111-4 been rendered or that was rightfully refused or acceptance of which
111-5 was rightfully revoked:
111-6 (i) the amount of any payments made and
111-7 the value of other consideration given to the licensor with respect
111-8 to that performance and not previously returned to the licensee;
111-9 (ii) the market value of the performance
111-10 less the contract fee for that performance; or
111-11 (iii) the cost of a commercially
111-12 reasonable substitute transaction less the contract fee under the
111-13 breached contract, if the substitute transaction was entered into
111-14 by the licensee in good faith and without unreasonable delay for
111-15 substantially similar information with the same contractual use
111-16 terms; or
111-17 (C) damages calculated in any reasonable manner;
111-18 and
111-19 (2) incidental and consequential damages.
111-20 (b) The amount of damages must be reduced by any unpaid
111-21 contract fees for performance by the licensor which has been
111-22 accepted by the licensee and as to which the acceptance has not
111-23 been rightfully revoked.
111-24 Sec. 108.10. RECOUPMENT. (a) Except as otherwise provided
111-25 in Subsection (b), an aggrieved party, upon notifying the party in
111-26 breach of contract of its intention to do so, may deduct all or any
111-27 part of the damages resulting from the breach from any payments
112-1 still due under the same contract.
112-2 (b) If a breach of contract is not material with reference
112-3 to the particular performance, an aggrieved party may exercise its
112-4 rights under Subsection (a) only if the agreement does not require
112-5 further affirmative performance by the other party and the amount
112-6 of damages deducted can be readily liquidated under the agreement.
112-7 SUBCHAPTER C. REMEDIES RELATED TO PERFORMANCE
112-8 Sec. 108.11. SPECIFIC PERFORMANCE. (a) Specific
112-9 performance may be ordered:
112-10 (1) if the agreement provides for that remedy, other
112-11 than an obligation for the payment of money;
112-12 (2) if the contract was not for personal services and
112-13 the agreed performance is unique; or
112-14 (3) in other proper circumstances.
112-15 (b) An order for specific performance may contain any
112-16 conditions considered just and must provide adequate safeguards
112-17 consistent with the contract to protect the confidentiality of
112-18 information, information, and informational rights of both parties.
112-19 Sec. 108.12. COMPLETING PERFORMANCE. (a) On breach of
112-20 contract by a licensee, the licensor may:
112-21 (1) identify to the contract any conforming copy not
112-22 already identified if, at the time the licensor learned of the
112-23 breach, the copy was in its possession;
112-24 (2) in the exercise of reasonable commercial judgment
112-25 for purposes of avoiding loss and effective realization on effort
112-26 or investment, complete the information and identify it to the
112-27 contract, cease work on it, relicense or dispose of it, or proceed
113-1 in any other commercially reasonable manner; and
113-2 (3) pursue any remedy for breach that has not been
113-3 waived.
113-4 (b) On breach by a licensee, both parties remain bound by
113-5 all restrictions in contractual use terms, but the contractual use
113-6 terms do not apply to information or copies properly received or
113-7 obtained from another source.
113-8 Sec. 108.13. CONTINUING USE. On breach of contract by a
113-9 licensor, the following rules apply:
113-10 (1) A licensee that has not canceled the contract may
113-11 continue to use the information and informational rights under the
113-12 contract. If the licensee continues to use the information or
113-13 informational rights, the licensee is bound by all terms of the
113-14 contract, including contractual use terms, obligations not to
113-15 compete, and obligations to pay contract fees.
113-16 (2) The licensee may pursue any remedy for breach
113-17 which has not been waived.
113-18 (3) The licensor's rights remain in effect but are
113-19 subject to the licensee's remedy for breach, including any right of
113-20 recoupment or setoff.
113-21 Sec. 108.14. DISCONTINUING ACCESS. On material breach of an
113-22 access contract or if the agreement so provides, a party may
113-23 discontinue all contractual rights of access of the party in breach
113-24 and direct any person that is assisting the performance of the
113-25 contract to discontinue its performance.
113-26 Sec. 108.15. RIGHT TO POSSESSION AND TO PREVENT USE. (a)
113-27 On cancellation of a license, the licensor has the right:
114-1 (1) to possession of all copies of the licensed
114-2 information in the possession or control of the licensee and any
114-3 other materials pertaining to that information which by contract
114-4 are to be returned or delivered by the licensee to the licensor;
114-5 and
114-6 (2) to prevent the continued exercise of contractual
114-7 and informational rights in the licensed information under the
114-8 license.
114-9 (b) Except as otherwise provided in Section 108.14, a
114-10 licensor may exercise its rights under Subsection (a) without
114-11 judicial process only if this can be done:
114-12 (1) without a breach of the peace;
114-13 (2) without a foreseeable risk of personal injury or
114-14 significant physical damage to information or property other than
114-15 the licensed information; and
114-16 (3) in accordance with Section 108.16.
114-17 (c) In a judicial proceeding, the court may enjoin a
114-18 licensee in breach of contract from continued use of the
114-19 information and informational rights and may order the licensor or
114-20 a judicial officer to take the steps described in Section 106.18.
114-21 (d) A party has a right to an expedited judicial hearing on
114-22 a request for prejudgment relief to enforce or protect its rights
114-23 under this section.
114-24 (e) The right to possession under this section is not
114-25 available to the extent that the information, before breach of the
114-26 license and in the ordinary course of performance under the
114-27 license, was so altered or commingled that the information is no
115-1 longer identifiable or separable.
115-2 (f) A licensee that provides information to a licensor
115-3 subject to contractual use terms has the rights and is subject to
115-4 the limitations of a licensor under this section with respect to
115-5 the information it provides.
115-6 Sec. 108.16. LIMITATIONS ON ELECTRONIC SELF-HELP. (a) In
115-7 this section, "electronic self-help" means the use of electronic
115-8 means to exercise a licensor's rights under Section 108.15(b).
115-9 (b) On cancellation of a license, electronic self-help is
115-10 not permitted, except as provided in this section. Electronic
115-11 self-help is prohibited in mass-market transactions.
115-12 (c) If the parties agree to permit electronic self-help, the
115-13 licensee shall separately manifest assent to a term authorizing use
115-14 of electronic self-help. The term must:
115-15 (1) provide for notice of exercise as provided in
115-16 Subsection (d);
115-17 (2) state the name of the person designated by the
115-18 licensee to which notice of exercise must be given and the manner
115-19 in which notice must be given and place to which notice must be
115-20 sent to that person; and
115-21 (3) provide a simple procedure for the licensee to
115-22 change the designated person or place.
115-23 (d) Before resorting to electronic self-help authorized by a
115-24 term of the license, the licensor shall give notice in a record to
115-25 the person designated by the licensee stating:
115-26 (1) that the licensor intends to resort to electronic
115-27 self-help as a remedy on or after the 15th day after the date of
116-1 receipt by the licensee of the notice;
116-2 (2) the nature of the claimed breach that entitles the
116-3 licensor to resort to self-help; and
116-4 (3) the name, title, and address, including direct
116-5 telephone number, facsimile number, or e-mail address, to which the
116-6 licensee may communicate concerning the claimed breach.
116-7 (e) A licensee may recover direct and incidental damages
116-8 caused by wrongful use of electronic self-help. The licensee may
116-9 also recover consequential damages for wrongful use of electronic
116-10 self-help, whether or not those damages are excluded by the terms
116-11 of the license, if:
116-12 (1) within the period specified in Subsection (d)(1),
116-13 the licensee gives notice to the licensor's designated person
116-14 describing in good faith the general nature and magnitude of
116-15 damages;
116-16 (2) the licensor has reason to know the damages of the
116-17 type described in Subsection (f) may result from the wrongful use
116-18 of electronic self-help; or
116-19 (3) the licensor does not provide the notice required
116-20 in Subsection (d).
116-21 (f) Even if the licensor complies with Subsections (c) and
116-22 (d), electronic self-help may not be used if the licensor has
116-23 reason to know that its use will result in substantial injury or
116-24 harm to the public health or safety or grave harm to the public
116-25 interest substantially affecting third persons not involved in the
116-26 dispute.
116-27 (g) A court of competent jurisdiction of this state shall
117-1 give prompt consideration to a petition for injunctive relief and
117-2 may enjoin, temporarily or permanently, the licensor from
117-3 exercising electronic self-help even if authorized by a license
117-4 term or enjoin the licensee from misappropriation or misuse of
117-5 computer information, as may be appropriate, upon consideration of
117-6 the following:
117-7 (1) grave harm of the kinds stated in Subsection (f),
117-8 or the threat thereof, whether or not the licensor has reason to
117-9 know of those circumstances;
117-10 (2) irreparable harm or threat of irreparable harm to
117-11 the licensee or licensor;
117-12 (3) that the party seeking the relief is more likely
117-13 than not to succeed under its claim when it is finally adjudicated;
117-14 (4) that all of the conditions to entitle a person to
117-15 the relief under the laws of this state have been fulfilled; and
117-16 (5) that the party that may be adversely affected is
117-17 adequately protected against loss, including a loss because of
117-18 misappropriation or misuse of computer information, that it may
117-19 suffer because the relief is granted under this title.
117-20 (h) Before breach of contract, rights or obligations under
117-21 this section may not be waived or varied by an agreement, but the
117-22 parties may prohibit use of electronic self-help, and the parties,
117-23 in the term referred to in Subsection (c), may specify additional
117-24 provisions more favorable to the licensee.
117-25 (i) This section does not apply if the licensor obtains
117-26 possession of a copy without a breach of the peace and the
117-27 electronic self-help is used solely with respect to that copy.
118-1 CHAPTER 109. MISCELLANEOUS PROVISIONS
118-2 Sec. 109.01. EFFECTIVE DATE. The effective date of this
118-3 title is September 1, 2001.
118-4 Sec. 109.02. PREVIOUS RIGHTS AND TRANSACTIONS. Contracts
118-5 that are enforceable and rights of action that accrue before the
118-6 effective date of this title are governed by the law then in effect
118-7 unless the parties agree to be governed by this title.
118-8 Sec. 109.03. ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL
118-9 COMMERCE ACT. The provisions of this title governing the legal
118-10 effect, validity, or enforceability of electronic records or
118-11 signatures, and of contracts formed or performed with the use of
118-12 such records or signatures conform to the requirements of Section
118-13 102 of the Electronic Signatures in Global and National Commerce
118-14 Act (15 U.S.C. Section 7001 et seq.) and supersede, modify, and
118-15 limit the Electronic Signatures in Global and National Commerce Act
118-16 (15 U.S.C. Section 7001 et seq.).
118-17 SECTION 2. This Act takes effect September 1, 2001.