By Carona S.B. No. 709 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.