1.1                          A bill for an act 
  1.2             relating to commerce; regulating information licenses; 
  1.3             proposing coding for new law as Minnesota Statutes, 
  1.4             chapter 336.2B. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6                         ARTICLE 2B-LICENSES
  1.7                                Part 1 
  1.8                          GENERAL PROVISIONS 
  1.9      Section 1.  [336.2B-101] [SHORT TITLE.] 
  1.10     This article may be cited as Uniform Commercial Code - 
  1.11  Licenses. 
  1.12     Sec. 2.  [336.2B-102] [DEFINITIONS.] 
  1.13     (a) In this article: 
  1.14     (1) "Access contract" means a contract for electronic 
  1.15  access to a resource containing information, resource for 
  1.16  processing information, data system, or other similar facility 
  1.17  of a licensor or third party, whether or not performance of the 
  1.18  agreement also entails access to information resources delivered 
  1.19  to or controlled by the licensee. 
  1.20     (2) "Authenticate" means to sign or to execute or adopt a 
  1.21  symbol, including a digital signal and identifier, or to do an 
  1.22  act that encrypts a record or an electronic message in whole or 
  1.23  in part, with present intent to establish the authenticity of, 
  1.24  or signify a party's acceptance and adoption of, a record or 
  1.25  term that contains the authentication or to which a record 
  2.1   containing the authentication refers. 
  2.2      (3) "Cancellation" means an act by either party which ends 
  2.3   a contract because of a breach by the other party. 
  2.4      (4) "Computer program" means a set of statements or 
  2.5   instructions to be used directly or indirectly in an information 
  2.6   processing system in order to bring about a certain result.  
  2.7      (5) "Consequential damages" means compensation for losses 
  2.8   of a party resulting from its general or particular requirements 
  2.9   and needs which, at the time of contracting, the other party had 
  2.10  reason to know would probably result from a breach of contract 
  2.11  and which are not unreasonably disproportionate to the risk 
  2.12  assumed by the party in breach under the contract and could not 
  2.13  have been prevented by the aggrieved party by reasonable 
  2.14  measures after breach.  The term includes compensation for 
  2.15  losses resulting from the breach in the form of lost profit or 
  2.16  opportunity, damage to reputation, lost value in confidential 
  2.17  information because of wrongful disclosure, damage to 
  2.18  information other than the subject matter of the contract, 
  2.19  damage caused by an extraneous program, code, or virus, and 
  2.20  injury to person or property proximately resulting from breach 
  2.21  of warranty.  The term does not include direct or incidental 
  2.22  damages. 
  2.23     (6) "Conspicuous" means so displayed or presented that a 
  2.24  reasonable person against whom it operates would likely have 
  2.25  noticed it or, in the case of an electronic message intended to 
  2.26  evoke a response without the need for review by an individual, 
  2.27  in a form that would enable a reasonably configured electronic 
  2.28  agent to take it into account or react to it without review of 
  2.29  the message by an individual.  Except in the case of an 
  2.30  electronic agent, a term is conspicuous if it is: 
  2.31     (A) a heading in solid capitals in a record or display 
  2.32  referring to the language in the body or text of the record or 
  2.33  display that is not in capitals; 
  2.34     (B) language in the body or text of a record or display in 
  2.35  larger or other contrasting type or color than other language; 
  2.36     (C) prominently referenced in the body or text of a record 
  3.1   or display and can be readily accessed from the record or 
  3.2   display; 
  3.3      (D) so positioned in a record or display that a party 
  3.4   cannot proceed without taking some additional action with 
  3.5   respect to the term or the reference thereto; or 
  3.6      (E) readily distinguished in another manner. 
  3.7      (7) "Consumer" means an individual who is a licensee of 
  3.8   information that at the time of contracting is intended by the 
  3.9   individual to be used primarily for personal, family, or 
  3.10  household use.  The term does not include a person that is a 
  3.11  licensee of information primarily for profit making, 
  3.12  professional, or commercial purposes, including agricultural, 
  3.13  investment, investment management, research, and business 
  3.14  management. 
  3.15     (8) "Continuous-access contract" means an access contract 
  3.16  that, within the time of agreed availability, affords the 
  3.17  licensee a right of access at times substantially of its own 
  3.18  choosing. 
  3.19     (9) "Copy" means information that is fixed on a temporary 
  3.20  or permanent basis in a medium from which the information can be 
  3.21  perceived, reproduced, used, or communicated either directly or 
  3.22  with the aid of an information processing machine or similar 
  3.23  device.  
  3.24     (10) "Delivery" means the physical transfer of possession 
  3.25  or control, or the communication, of a copy to a licensee or a 
  3.26  facility controlled by the licensee or its intermediary. 
  3.27     (11) "Direct damages" means compensation for losses of a 
  3.28  party consisting of the difference between the value of the 
  3.29  expected performance and the value of the performance received.  
  3.30  The term does not include compensation for losses resulting from 
  3.31  the aggrieved party's inability to use the results of the 
  3.32  expected performance in a commercial or other context, 
  3.33  consequential damages, or incidental damages. 
  3.34     (12) "Electronic agent" means a computer program designed, 
  3.35  selected, or programmed by a party to initiate or respond to 
  3.36  electronic messages or performances without review by an 
  4.1   individual.  The term does not include a common carrier employed 
  4.2   or used in that capacity. 
  4.3      (13) "Electronic message" means a record stored, generated, 
  4.4   or transmitted for purposes of communication to another party or 
  4.5   an electronic agent by electronic, optical, or similar means.  
  4.6   The term includes electronic data interchange, electronic mail, 
  4.7   facsimile, telex, telecopying, and similar communications. 
  4.8      (14) "Electronic transaction" means a transaction in which 
  4.9   the parties contemplate that a contract will be formed by means 
  4.10  of electronic messages in which the messages of one or both 
  4.11  parties will not be reviewed by an individual. 
  4.12     (15) "Finance lease" means a lease between a lessor and an 
  4.13  end user licensee in which:  (i) financial accommodation for a 
  4.14  license and any related agreement between a licensor and the 
  4.15  licensee is provided by the lessor and the information is to be 
  4.16  used by the licensee; (ii) the lessor does not select or supply 
  4.17  the information and is not a party that holds intellectual 
  4.18  property rights in the information; (iii) before it provides the 
  4.19  information to the lessor or the licensee, the licensor receives 
  4.20  notice of the lessor's interest and of the intent that use of 
  4.21  the information be by the licensee; and (iv) the licensee agrees 
  4.22  or manifests assent to the terms of the license as a condition 
  4.23  to the lease. 
  4.24     (16) "Good faith" means honesty in fact and the observance 
  4.25  of reasonable commercial standards of fair dealing. 
  4.26     (17) "Incidental damages": 
  4.27     (A) includes compensation for any commercially reasonable 
  4.28  charge, expense, and commission incurred after breach by the 
  4.29  other party in: 
  4.30     (i) inspection, receipt, transportation, care, or custody 
  4.31  of property; 
  4.32     (ii) stopping shipment; 
  4.33     (iii) effecting cover, return, or resale of property; 
  4.34     (iv) reasonable efforts otherwise to mitigate the 
  4.35  consequences of breach; and 
  4.36     (v) actions otherwise incidental to the breach; 
  5.1      (B) but do not include consequential or general damages. 
  5.2      (18) "Information" means data, text, images, sounds, 
  5.3   computer programs, software, databases, mask works or the like, 
  5.4   or any associated intellectual property rights or other rights 
  5.5   in information. 
  5.6      (19) "Informational content" means data, text, images, 
  5.7   sounds, or similar information intended to be communicated to a 
  5.8   person in the ordinary use of the information. 
  5.9      (20) "Intellectual property rights" includes all rights in 
  5.10  information created under laws governing patents, copyrights, 
  5.11  trade secrets, trademarks, publicity rights, or any similar law 
  5.12  that permits a party independent of contract to control or 
  5.13  preclude another party's use or disclosure of information, 
  5.14  whether the law creating the rights is a state law, federal law, 
  5.15  or the law of another country. 
  5.16     (21) "License" means a contract for transfer of rights in 
  5.17  information which expressly conditions, withholds or limits the 
  5.18  rights, whether or not the contract transfers title to a copy of 
  5.19  the information.  The term includes an access contract, data 
  5.20  processing contract, and software contract.  The term does not 
  5.21  include a software contract that transfers ownership of the 
  5.22  intellectual property rights in the software or the reservation 
  5.23  or creation of a security interest in information. 
  5.24     (22) "Licensee" means a transferee of rights or any other 
  5.25  person designated in or authorized to exercise rights as a 
  5.26  licensee pursuant to a contract under this article, whether or 
  5.27  not the contract constitutes a license. 
  5.28     (23) "License fee" means the price, fee, or royalty payable 
  5.29  pursuant to a contract under this article. 
  5.30     (24) "Licensor" means a transferor of rights in a contract 
  5.31  under this article, whether or not the contract constitutes a 
  5.32  license.  The term includes a provider of services in a contract 
  5.33  under this article.  In an access contract, as between a 
  5.34  provider of services and a customer, the provider of services is 
  5.35  the licensor, and as between the provider of services and any 
  5.36  provider of informational content for the service, the 
  6.1   informational content provider is the licensor.  If the 
  6.2   consideration for the contract consists in whole or in part of 
  6.3   an exchange of transfers of information, each party making a 
  6.4   transfer is a licensor with respect to the information it 
  6.5   transfers. 
  6.6      (25) "Mass-market license" means a standard form prepared 
  6.7   for and used in a retail market or similar market that, for the 
  6.8   particular type of information, is characterized primarily by 
  6.9   transactions involving consumer licensees under substantially 
  6.10  the same terms for the same information, if: 
  6.11     (A) the licensee is an end user with whom the licensor did 
  6.12  not personally deal who acquired the information in a 
  6.13  transaction whose terms and quantity are characteristic of 
  6.14  consumer contracts in that market; 
  6.15     (B) the information is not customized or otherwise 
  6.16  specially prepared for the particular licensee; and 
  6.17     (C) the licensee did not have an opportunity to negotiate 
  6.18  terms other than price, quantity, and standard options. 
  6.19     (26) "Merchant" means a person that deals in information of 
  6.20  the kind, a person that by occupation purports to have knowledge 
  6.21  or skill peculiar to the practices or information involved in 
  6.22  the transaction, or a person to which knowledge or skill may be 
  6.23  attributed by the person's employment of an agent or broker or 
  6.24  other intermediary that purports to have the knowledge or skill. 
  6.25     (27) "Nonexclusive license" means a license in which the 
  6.26  licensor or other person authorized to make a transfer or 
  6.27  license is not prohibited from licensing the same information or 
  6.28  rights therein to other licensees.  The term includes a 
  6.29  consignment of copies. 
  6.30     (28) "Published informational content" means informational 
  6.31  content prepared for and distributed in substantially the same 
  6.32  form to all licensees and not provided as customized advice 
  6.33  tailored for the particularized situation of the licensee by an 
  6.34  individual acting on behalf of the licensor using judgment and 
  6.35  expertise.  This term does not include informational content 
  6.36  provided within a special relationship of reliance between the 
  7.1   provider and the transferee. 
  7.2      (29) "Receipt" means taking delivery of a copy or 
  7.3   information.  An electronic record is received when it enters an 
  7.4   information processing system in a form capable of being 
  7.5   processed by that system and the recipient uses or has 
  7.6   designated that system for the purpose of receiving such records 
  7.7   or information. 
  7.8      (30) "Record" means information that is inscribed on a 
  7.9   tangible medium or that is stored in an electronic or other 
  7.10  medium and is retrievable in perceivable form. 
  7.11     (31) "Sale" means the passing of title to a copy of 
  7.12  information for a fee. 
  7.13     (32) "Software" means a computer program and any data, 
  7.14  program description, media, or supporting documentation provided 
  7.15  by a licensor as part of the transaction. 
  7.16     (33) "Software contract" means an contract to transfer 
  7.17  rights in software, including a contract to develop software as 
  7.18  a work for hire, whether or not the software exists at the time 
  7.19  of contracting, is to be developed, or whether the contract 
  7.20  provides for transfer of ownership of or conditional rights in 
  7.21  copies of the software or for services to develop, support, or 
  7.22  use it. 
  7.23     (34) "Standard form" means a record consisting of multiple 
  7.24  contractual terms prepared by one party for general and 
  7.25  repetitive use which is used in a transaction without 
  7.26  negotiation of, or changes in, the substantial majority of the 
  7.27  standard terms.  Negotiation or customization of price, 
  7.28  quantity, method of payment, standard options, or time or method 
  7.29  of delivery does not preclude a record from being a standard 
  7.30  form. 
  7.31     (35) "Standard term" means a term prepared in advance for 
  7.32  general and repetitive use by one party. 
  7.33     (36) "Substantial performance" means performance of an 
  7.34  obligation in a manner that does not constitute a material 
  7.35  breach of contract. 
  7.36     (37) "Termination" means an act by a party which ends a 
  8.1   contract for a reason other than for breach by the other party. 
  8.2      (38) "Transfer of rights" means a grant of a contractual 
  8.3   right or privilege as between the parties for the transferee to 
  8.4   have access to, modify, disclose, distribute, purchase, lease, 
  8.5   copy, use, process, display, perform, or otherwise take action 
  8.6   with respect to information, coupled with any actions necessary 
  8.7   to enable the transferee to exercise that right or privilege. 
  8.8      (b) In addition, article 1 contains general definitions and 
  8.9   principles of construction that apply to this article. 
  8.10     Sec. 3.  [336.2B-103] [SCOPE.] 
  8.11     (a) This article applies to licenses of information and 
  8.12  software contracts whether or not the information exists at the 
  8.13  time of the contract, is expected to come into being after the 
  8.14  contract is formed, or is to be developed, discovered, compiled, 
  8.15  or transformed, and even if the expected development, discovery, 
  8.16  compilation, or transformation does not in fact occur.  The 
  8.17  article also applies to any agreement related to a license or 
  8.18  software contract in which a party is to provide support, 
  8.19  maintain, or modify information. 
  8.20     (b) Except as otherwise provided in subsections (c) and 
  8.21  (d), if another article of this act applies to a transaction, 
  8.22  this article does not apply to the part of the transaction 
  8.23  governed by the other article. 
  8.24     (c) If a transaction involves both information and goods, 
  8.25  this article applies to the information and to the copies of the 
  8.26  information, its packaging, and documentation, but Article 2 or 
  8.27  2A governs standards of performance of the goods other than the 
  8.28  copies, packaging, or documentation pertaining to the 
  8.29  information.  If a transaction includes information and services 
  8.30  outside this article, or elements excluded from this article 
  8.31  under subsection (d)(1) and (2), this article applies to the 
  8.32  information, copies of the information, its packaging, and 
  8.33  documentation.  A transaction excluded from this article under 
  8.34  subsection (d)(3) is governed by Article 2 or 2A. 
  8.35     (d) This article does not apply to: 
  8.36     (1) a contract of employment of an individual who is not an 
  9.1   independent contractor, a contract for performance of 
  9.2   entertainment services by an individual or group, or a contract 
  9.3   for performance of services by a member of a regulated 
  9.4   profession with respect to services commonly associated with 
  9.5   regulated aspects of that profession; 
  9.6      (2) a license of a trademark, trade name, or trade dress, 
  9.7   or of a patent and know-how related to the patent to the extent 
  9.8   the license does not pertain to computer software or to an 
  9.9   access contract or database contract; or 
  9.10     (3) a sale or lease of a copy of a computer program that 
  9.11  was not developed specifically for a particular transaction and 
  9.12  that is embedded in goods other than a copy of the program or an 
  9.13  information processing machine, if the program is not copied in 
  9.14  the ordinary course of using the goods and was not the subject 
  9.15  of a separate license with the buyer or lessee. 
  9.16     Sec. 4.  [336.2B-104] [TRANSACTIONS SUBJECT TO OTHER LAW.] 
  9.17     (a) Subject to subsection (b), the conflicting law governs 
  9.18  in the case of a conflict between this article and: 
  9.19     (1) a law of this state establishing a right of access to 
  9.20  or use of information by compulsory licensing or public access, 
  9.21  or a similar law; 
  9.22     (2) a law of this state regulating purchase or licenses of 
  9.23  rights in motion pictures by exhibitors; or 
  9.24     (3) a consumer protection law of this state. 
  9.25     (b) If a law referred to in subsection (a) existing on the 
  9.26  effective date of this article applies to a transaction governed 
  9.27  by this article, the following rules apply: 
  9.28     (1) A requirement that a contractual obligation, waiver, 
  9.29  notice, or disclaimer be in writing is satisfied by a record. 
  9.30     (2) A requirement that a particular agreement or term be 
  9.31  signed is satisfied by an authentication. 
  9.32     (3) A requirement that a contractual term be conspicuous or 
  9.33  the like is satisfied by a term that is conspicuous in 
  9.34  accordance with this article. 
  9.35     (4) A requirement of consent or agreement to a particular 
  9.36  contractual term is satisfied by an action that manifests assent 
 10.1   to a term in accordance with this article. 
 10.2      Sec. 5.  [336.2B-105] [APPLICATION TO OTHER TRANSACTIONS.] 
 10.3      Parties to a transaction not governed by this article by 
 10.4   agreement may elect to have all or part of this article apply to 
 10.5   the transaction if the agreement is in a record other than a 
 10.6   consumer license.  The agreement is effective to the extent that 
 10.7   it covers issues resolvable by agreement. 
 10.8      Sec. 6.  [336.2B-106] [LAW IN MULTIJURISDICTIONAL 
 10.9   TRANSACTIONS.] 
 10.10     (a) A choice of law term in a contract is enforceable. 
 10.11     (b) If a contract does not have an enforceable choice of 
 10.12  law term, the following rules apply: 
 10.13     (1) Except in an access contract, if a contract requires 
 10.14  delivery of a copy of the information to the licensee other than 
 10.15  by electronic communication, the contract is governed by the law 
 10.16  of the jurisdiction in which the copy is located when the 
 10.17  licensee receives physical possession of the copy or, in the 
 10.18  event of nondelivery, the jurisdiction in which receipt was to 
 10.19  have occurred. 
 10.20     (2) In all other cases, the contract is governed by the law 
 10.21  of the jurisdiction in which the licensor is located when the 
 10.22  transfer of rights occurred or was to have occurred. 
 10.23     (c) If the jurisdiction whose law applies as determined 
 10.24  under subsection (b)(2) is outside the United States, subsection 
 10.25  (b)(2) applies only if the laws of that jurisdiction provide 
 10.26  substantially similar protections and rights to the party not 
 10.27  located in that jurisdiction as are provided under this article. 
 10.28  Otherwise, the rights and duties of the parties are governed by: 
 10.29     (1) the law of the jurisdiction in the United States or in 
 10.30  the country in which the licensor does business and has the most 
 10.31  substantial connection with the transaction; or 
 10.32     (2) if no such jurisdiction exists, the law of the 
 10.33  jurisdiction in the United States in which the licensee is 
 10.34  located. 
 10.35     (d) A party is located at its place of business if it has 
 10.36  one place of business, at its chief executive office if it has 
 11.1   more than one place of business, or at its place of 
 11.2   incorporation or primary registration if it does not have a 
 11.3   physical place of business.  Otherwise, a party is located at 
 11.4   its primary residence. 
 11.5      Sec. 7.  [336.2B-107] [CHOICE OF FORUM.] 
 11.6      An exclusive judicial, arbitration, or other dispute 
 11.7   resolution forum may be chosen by the parties, but in a consumer 
 11.8   license, the choice of a judicial forum is not enforceable if 
 11.9   the chosen jurisdiction would not otherwise have jurisdiction 
 11.10  over the licensee and the choice unfairly disadvantaged the 
 11.11  licensee.  A forum chosen in a term of an agreement is not 
 11.12  exclusive unless the agreement expressly so provides. 
 11.13     Sec. 8.  [336.2B-108] [BREACH OF CONTRACT.] 
 11.14     (a) Whether a party is in breach of contract is determined 
 11.15  by the terms of the agreement and by this article.  Breach 
 11.16  occurs if a party fails to perform an obligation timely or 
 11.17  exceeds a contractual limitation. 
 11.18     (b) A breach of contract is material if the contact so 
 11.19  provides.  In the absence of express contractual terms, a breach 
 11.20  is material if the circumstances, including the language of the 
 11.21  agreement, expectations of the parties, and character of the 
 11.22  breach, indicate that the breach caused or may cause substantial 
 11.23  harm to the interests of the aggrieved party, that the injured 
 11.24  party will be substantially deprived of the benefit it 
 11.25  reasonably expected under the contract, or that the breach meets 
 11.26  the conditions of subsection (c) or (d). 
 11.27     (c) A breach of contract is material if it involves: 
 11.28     (1) a failure to perform in conformance with and in the 
 11.29  time required by express performance standards or 
 11.30  specifications; 
 11.31     (2) knowing or negligent disclosure or use of confidential 
 11.32  information of an aggrieved party not authorized by the license; 
 11.33     (3) knowing infringement of an aggrieved party's 
 11.34  intellectual property rights not authorized by the license and 
 11.35  occurring over more than a brief period; or 
 11.36     (4) an uncured substantial failure to pay a license fee 
 12.1   when due which is not justified by a bona fide dispute about 
 12.2   whether payment is due. 
 12.3      (d) A material breach of contract occurs if the cumulative 
 12.4   effect of nonmaterial breaches by the same party satisfies the 
 12.5   standards for materiality. 
 12.6      (e) If there is a breach of contract, whether or not 
 12.7   material, the aggrieved party is entitled to the remedies 
 12.8   provided for in this article and the agreement. 
 12.9      Sec. 9.  [336.2B-109] [UNCONSCIONABLE CONTRACT OR TERM.] 
 12.10     (a) If a court finds as a matter of law that a contract or 
 12.11  any term thereof was unconscionable at the time it was made, the 
 12.12  court may refuse to enforce the contract, enforce the remainder 
 12.13  of the contract without the unconscionable term, or so limit the 
 12.14  application of an unconscionable term as to avoid the 
 12.15  unconscionable result. 
 12.16     (b) Before making a finding of unconscionability under 
 12.17  subsection (a), the court, on motion of a party or on its own 
 12.18  motion, shall afford the parties a reasonable opportunity to 
 12.19  present evidence as to the setting, purpose, and effect of the 
 12.20  contract or term thereof or of the conduct. 
 12.21     Sec. 10.  [336.2B-110] [ATTRIBUTION PROCEDURE.] 
 12.22     (a) A procedure established by agreement or adopted by the 
 12.23  parties for the purpose of verifying that electronic records, 
 12.24  messages, or performances are those of the respective parties or 
 12.25  for detecting errors in the transmission or the informational 
 12.26  content of an electronic message, record, or performance, 
 12.27  constitutes an attribution procedure if the procedure is 
 12.28  commercially reasonable. 
 12.29     (b) The commercial reasonableness of an attribution 
 12.30  procedure is a question of law to be determined by the court in 
 12.31  light of the purposes of the procedure and the commercial 
 12.32  circumstances at the time of the agreement, including the nature 
 12.33  of the transaction, volume of similar transactions engaged in by 
 12.34  either or both of the parties, availability of alternatives 
 12.35  offered to but rejected by the party, and procedures in general 
 12.36  use for similar types of transactions.  An attribution procedure 
 13.1   may require the use of algorithms or other codes, identifying 
 13.2   words or numbers, encryption, callback procedures, key escrow, 
 13.3   or similar security devices that are reasonable under the 
 13.4   circumstances. 
 13.5      (c) Except as otherwise provided in sections 336.2B-111 and 
 13.6   336.2B-102, if a loss occurs because a party complies with a 
 13.7   procedure that was not commercially reasonable, the party that 
 13.8   proposed or required use of the procedure bears the loss unless 
 13.9   it disclosed the nature of the risk to the other party or 
 13.10  offered commercially reasonable alternatives that the party 
 13.11  rejected. 
 13.12     Sec. 11.  [336.2B-111] [ATTRIBUTION OF ELECTRONIC RECORD, 
 13.13  MESSAGE, OR PERFORMANCE; ELECTRONIC AGENT.] 
 13.14     (a) If an electronic message, record, or performance is 
 13.15  received by a party, as between the parties, the message, 
 13.16  record, or performance is attributable to the party indicated as 
 13.17  the sender if: 
 13.18     (1) it was sent by that party, its agent, or its electronic 
 13.19  agent; 
 13.20     (2) the receiving party, in good faith and in compliance 
 13.21  with an attribution procedure, concluded that it was sent by the 
 13.22  other party; or 
 13.23     (3) subject to subsection (b), the record, message, or 
 13.24  performance: 
 13.25     (A) resulted from acts of a person that obtained access to 
 13.26  access numbers, codes, computer programs, or the like from a 
 13.27  source under the control of the alleged sender creating the 
 13.28  appearance that it came from the alleged sender; 
 13.29     (B) the access occurred under circumstances constituting a 
 13.30  failure to exercise reasonable care by the alleged sender; and 
 13.31     (C) the receiving party reasonably relied to its detriment 
 13.32  on the apparent source of the message or performance. 
 13.33     (b) In a transaction governed by subsection (a)(3), the 
 13.34  following rules apply: 
 13.35     (1) The receiving party has the burden of proving 
 13.36  reasonable reliance, and the alleged sender has the burden of 
 14.1   proving reasonable care and access source. 
 14.2      (2) Reliance on a message, record, or performance that does 
 14.3   not comply with an agreed authentication procedure is not 
 14.4   reasonable unless authorized by an individual representing the 
 14.5   alleged sender. 
 14.6      (c) An authentication made by an electronic agent 
 14.7   constitutes the authentication of a party if the party designed, 
 14.8   programmed, or selected the electronic agent for the purpose of 
 14.9   achieving results of that type. 
 14.10     Sec. 12.  [336.2B-112] [MANIFESTING ASSENT.] 
 14.11     (a) A party or electronic agent manifests assent to a 
 14.12  record or term if, after having an opportunity to review the 
 14.13  record or term under section 336.2B-113, it: 
 14.14     (1) authenticates a record or term, or engages in other 
 14.15  affirmative conduct that the record conspicuously provides or 
 14.16  the circumstances clearly indicate will constitute acceptance of 
 14.17  the record or term; and 
 14.18     (2) had an opportunity to decline to authenticate the 
 14.19  records or terms or engage in the conduct after having an 
 14.20  opportunity to review. 
 14.21     (b) The mere retention of information or a record without 
 14.22  objection is not manifestation of assent. 
 14.23     (c) If assent to a particular term in addition to assent to 
 14.24  a record is required, conduct of a party or an electronic agent 
 14.25  does not manifest assent to that term unless there was an 
 14.26  opportunity to review the term and the authentication or conduct 
 14.27  manifesting assent relates specifically to the term. 
 14.28     (d) Manifestation of assent may be proved in any manner, 
 14.29  including by a showing that a procedure existed by which a party 
 14.30  must of necessity have engaged in conduct that manifests assent 
 14.31  to the contract or the term in order to proceed further in the 
 14.32  use or processing of the information. 
 14.33     Sec. 13.  [336.2B-113] [OPPORTUNITY TO REVIEW.] 
 14.34     (a) A party or electronic agent has an opportunity to 
 14.35  review a record or term if the record or term is made available 
 14.36  in a manner designed to call it to the attention of the party or 
 15.1   to enable the electronic agent to react to the record or term: 
 15.2      (1) before the acquisition of a copy of information; 
 15.3      (2) before a transfer of rights; or 
 15.4      (3) in the normal course of initial use or preparation to 
 15.5   use the information or to receive the transfer of rights. 
 15.6      (b) Except for a proposal to modify a contract, if a record 
 15.7   is available for review only after initial use of information, a 
 15.8   party has an opportunity to review the record only if it has a 
 15.9   right to a refund of the license fees paid by discontinuing use 
 15.10  and returning all copies.  In the case of multiple products 
 15.11  transferred for a single, bundled price, (i) if the rejected 
 15.12  license is from the supplier of the bundled product, the refund 
 15.13  must be for the entire bundled price on return of the entire 
 15.14  bundled product, unless the licensee agrees to accept a 
 15.15  reasonable allocation of the portion of the total price to the 
 15.16  licensee attributable to the rejected license in light of the 
 15.17  price paid by the licensee for the bundled product, and (ii) if 
 15.18  the rejected license is from another licensor, the refund must 
 15.19  be for a reasonable allocation attributable to that license. 
 15.20     Sec. 14.  [336.2B-114] [PROOF OF AUTHENTICATION.] 
 15.21     A record or message is authenticated as a matter of law if 
 15.22  the symbol executed or adopted by a party complies with an 
 15.23  attribution procedure agreed to or adopted by the parties.  
 15.24  Otherwise, authentication may be proven in any manner, including 
 15.25  by showing that a procedure existed by which a party necessarily 
 15.26  must have executed or adopted a symbol in order to proceed 
 15.27  further in the use or processing of the information. 
 15.28     Sec. 15.  [336.2B-115] [EFFECT OF AGREEMENT.] 
 15.29     (a) Except as otherwise provided in section 336.1-103 and 
 15.30  this article, the effect of any provision of this article may be 
 15.31  varied by agreement of the parties, but the agreement may not 
 15.32  vary: 
 15.33     (1) the obligation of good faith; 
 15.34     (2) the right to relief from an unconscionable contract or 
 15.35  clause; 
 15.36     (3) the effect of section 336.2B-406 on limitation of 
 16.1   express warranties; 
 16.2      (4) the limits in section 336.2B-712; 
 16.3      (5) the unenforceable terms described in section 
 16.4   336.2B-503(b); 
 16.5      (6) the limitations on excluding notice in section 
 16.6   336.2B-629(d); or 
 16.7      other provisions to be added.  
 16.8      (b) The absence of a phrase such as "unless otherwise 
 16.9   agreed" does not by itself preclude the parties from varying the 
 16.10  provision by agreement. 
 16.11     (c) Unless this article requires a term to be conspicuous, 
 16.12  or that there be manifest assent to the term, fulfillment of the 
 16.13  requirement is not a prerequisite to enforceability of the term. 
 16.14  Whether a term is conspicuous is a question of law. 
 16.15                               Part 2 
 16.16                             FORMATION 
 16.17     Sec. 16.  [336.2B-201] [FORMAL REQUIREMENTS.] 
 16.18     (a) Except as otherwise provided in this section, a 
 16.19  contract is not enforceable by way of action or defense unless 
 16.20  there was a record authenticated by the party against which 
 16.21  enforcement is sought sufficient to indicate that a contract has 
 16.22  been made between the parties and describing the subject matter 
 16.23  and scope.  Any description of the subject matter and scope, 
 16.24  whether or not it is specific, satisfies this subsection if it 
 16.25  reasonably identifies what is described. 
 16.26     (b) A contract enforceable under this section is not made 
 16.27  unenforceable merely because it is not capable of being 
 16.28  performed within one year after its making. 
 16.29     (c) A grant or limitation dealing with the subject matter 
 16.30  of section 336.2B-310, 336.2B-311, 336.2B-312, or 336.2B-316 may 
 16.31  not vary the terms of those sections except by a record 
 16.32  authenticated by a party against which enforcement of the 
 16.33  contractual term is sought. 
 16.34     (d) A record is not insufficient merely because it 
 16.35  incorrectly states a contractual term.  However, a contract is 
 16.36  not enforceable under subsection (a) beyond the subject matter 
 17.1   and scope shown in the record. 
 17.2      (e) An agreement that does not satisfy the requirements of 
 17.3   subsection (a), but which is valid in other respects, is 
 17.4   enforceable: 
 17.5      (1) if the fixed total value of the payments to be made and 
 17.6   any other obligations incurred, excluding payments for options 
 17.7   to renew or buy, is less than $20,000; 
 17.8      (2) to the extent that the licensor or a person authorized 
 17.9   by the holder of intellectual property rights transferred copies 
 17.10  of the information or access codes to the licensee; or 
 17.11     (3) to the extent that performance has been rendered by one 
 17.12  party and accepted by the other party. 
 17.13     (f) By an agreement that is enforceable under this section, 
 17.14  the parties may waive the requirements of this section as to 
 17.15  future transactions. 
 17.16     Sec. 17.  [336.2B-202] [FORMATION IN GENERAL.] 
 17.17     (a) A contract may be made in any manner sufficient to show 
 17.18  agreement, including by conduct of both parties and an action of 
 17.19  an electronic agent which recognizes the existence of a contract.
 17.20     (b) If the parties so intend, an agreement sufficient to 
 17.21  constitute a contract may be found, even if the time that the 
 17.22  agreement was made cannot be determined, one or more terms are 
 17.23  left open or to be agreed upon, one party reserves the right to 
 17.24  modify terms, or the standard forms of the parties contain 
 17.25  varying terms. 
 17.26     (c) Although one or more terms are left open, a contract 
 17.27  does not fail for indefiniteness if the parties intended to form 
 17.28  a contract and there is a reasonably certain basis for giving an 
 17.29  appropriate remedy. 
 17.30     Sec. 18.  [336.2B-203] [FIRM OFFERS.] 
 17.31     An offer by a merchant to enter into a contract made in an 
 17.32  authenticated record that by its terms gives assurance that the 
 17.33  offer will be held open is not revocable for lack of 
 17.34  consideration during the time stated.  If a time is not stated, 
 17.35  the offer is irrevocable for a reasonable time, not exceeding 90 
 17.36  days.  A term of assurance in a standard form supplied by the 
 18.1   offeree is ineffective unless the offeror manifests assent to 
 18.2   the term. 
 18.3      Sec. 19.  [336.2B-204] [RELEASES.] 
 18.4      A release or waiver of intellectual property rights in 
 18.5   whole or in part is effective without consideration if it is 
 18.6   contained in a record authenticated by the party giving the 
 18.7   release or waiver and identifying the rights released or waived. 
 18.8      Sec. 20.  [336.2B-205] [OFFER AND ACCEPTANCE.] 
 18.9      (a) Subject to section 336.2B-206(a), unless otherwise 
 18.10  unambiguously indicated by the language or the circumstances, an 
 18.11  offer to make a contract invites acceptance in any manner and by 
 18.12  any medium reasonable under the circumstances, including a 
 18.13  definite expression of acceptance in a standard form containing 
 18.14  standard terms that vary from the terms of the offer. 
 18.15     (b) An order or other offer to buy, license, or acquire 
 18.16  information for prompt or current transfer invites acceptance 
 18.17  either by a prompt promise to transfer or by prompt or current 
 18.18  transfer.  However, a transfer involving nonconforming 
 18.19  information is not an acceptance if the transferor seasonably 
 18.20  notifies the transferee that the transfer is offered only as an 
 18.21  accommodation. 
 18.22     (c) If the beginning of a requested performance is a 
 18.23  reasonable mode of acceptance, an offeror that is not notified 
 18.24  of acceptance and has not received the relevant performance 
 18.25  within a reasonable time may treat the offer as having lapsed 
 18.26  without acceptance. 
 18.27     (d) Language which states that a party does not intend to 
 18.28  be bound unless the other party agrees to the terms in a record 
 18.29  or as otherwise proposed is enforceable if the conduct of the 
 18.30  party proposing the terms is consistent with the stated 
 18.31  conditions. 
 18.32     (e) In an electronic transaction involving an interaction 
 18.33  of two electronic agents or an interaction between an individual 
 18.34  and an electronic agent: 
 18.35     (1) if two electronic agents interact, a contract is formed 
 18.36  if the interaction results in both agents engaging in further 
 19.1   actions that signify a contract such as by engaging in 
 19.2   performance, ordering or instructing performance, or making a 
 19.3   record of the existence of a contract; 
 19.4      (2) if there is an interaction between an individual and an 
 19.5   electronic agent of another party and the individual has reason 
 19.6   to know that it is dealing with an electronic agent, a contract 
 19.7   is formed when the individual performs actions the individual 
 19.8   should know will cause the agent to perform or to permit further 
 19.9   use, or that are clearly indicated as constituting acceptance; 
 19.10  and 
 19.11     (3) the terms of the contract include terms on which the 
 19.12  parties have previously agreed, terms which the electronic 
 19.13  agents could take into account and, to the extent not covered by 
 19.14  the foregoing, terms provided by this article or other law. 
 19.15     Sec. 21.  [336.2B-206] [ELECTRONIC TRANSACTIONS AND 
 19.16  MESSAGES; CONTRACT FORMATION.] 
 19.17     (a) If an electronic message initiated by a party or an 
 19.18  electronic agent evokes an electronic message in response and 
 19.19  the messages reflect or can be attributed with the intent to be 
 19.20  bound, a contract exists when: 
 19.21     (1) the response is received if the response consists of 
 19.22  furnishing the requested information or notice of access to the 
 19.23  information and the originating message did not prohibit that 
 19.24  form of response; or 
 19.25     (2) the sender of the originating message receives an 
 19.26  electronic message signifying acceptance. 
 19.27     (b) In an electronic transaction, a contract is formed 
 19.28  although no individual representing either party was aware of or 
 19.29  reviewed the initial message, response, reply, information, or 
 19.30  action signifying acceptance. 
 19.31     (c) An electronic message is effective when received, even 
 19.32  if no individual is aware of its receipt. 
 19.33     Sec. 22.  [336.2B-207] [IDEA SUBMISSIONS.] 
 19.34     [reserved for development] 
 19.35                               Part 3 
 19.36                            CONSTRUCTION 
 20.1                             A.  General 
 20.2      Sec. 23.  [336.2B-301] [PAROL OR EXTRINSIC EVIDENCE.] 
 20.3      Terms with respect to which confirmatory records of the 
 20.4   parties agree or that are otherwise set forth in a record 
 20.5   intended by the parties as a final expression of their agreement 
 20.6   with respect to the terms included therein may not be 
 20.7   contradicted by evidence of any previous agreement or of a 
 20.8   contemporaneous oral agreement.  However, the terms may be 
 20.9   explained or supplemented by evidence of: 
 20.10     (1) course of performance, course of dealing, or usage of 
 20.11  trade; and 
 20.12     (2) consistent additional terms unless the court finds that 
 20.13  the record was intended by both parties as a complete and 
 20.14  exclusive expression of the terms of the agreement. 
 20.15     Sec. 24.  [336.2B-302] [COURSE OF PERFORMANCE OR PRACTICAL 
 20.16  CONSTRUCTION.] 
 20.17     (a) If an agreement involves repetitive performances by 
 20.18  either party with knowledge of the nature of the performance and 
 20.19  opportunity for objection to it by the other party, a course of 
 20.20  performance accepted or acquiesced in without objection is 
 20.21  relevant in determining the meaning of the agreement. 
 20.22     (b) Express terms of an agreement, course of performance, 
 20.23  course of dealing, and usage of trade must be construed whenever 
 20.24  reasonable as consistent with each other.  However, if that 
 20.25  construction is unreasonable: 
 20.26     (1) express terms control over course of performance, 
 20.27  course of dealing, and usage of trade; 
 20.28     (2) course of performance controls over course of dealing 
 20.29  and usage of trade; and 
 20.30     (3) course of dealing controls over usage of trade. 
 20.31     (c) Subject to section 336.2B-303, course of performance is 
 20.32  relevant to show a waiver or modification of a term inconsistent 
 20.33  with the course of performance. 
 20.34     Sec. 25.  [336.2B-303] [MODIFICATION AND RESCISSION.] 
 20.35     (a) An agreement modifying a contract is binding without 
 20.36  consideration. 
 21.1      (b) A contract that contains a term that excludes 
 21.2   modification or rescission except by a record authenticated by 
 21.3   the party to be bound may not otherwise be modified or rescinded.
 21.4   However, in a consumer license, a term requiring an 
 21.5   authenticated record for modification is not enforceable unless 
 21.6   the consumer manifests assent to the term. 
 21.7      (c) An attempt at modification or rescission which does not 
 21.8   satisfy the requirements of subsection (b) may operate as a 
 21.9   waiver. 
 21.10     Sec. 26.  [336.2B-304] [CONTINUING CONTRACTUAL TERMS.] 
 21.11     (a) Terms of an agreement involving repetitive performances 
 21.12  apply to all later performances of the parties, their agents, or 
 21.13  their designees unless modified pursuant to this article, even 
 21.14  if the terms are not subsequently displayed or otherwise brought 
 21.15  to the attention of the parties or electronic agents in the 
 21.16  context of the later performance. 
 21.17     (b) A term that provides that a contract involving 
 21.18  repetitive performances may be modified as to future 
 21.19  performances by compliance with a described contractual 
 21.20  procedure is enforceable.  A modification made in good faith 
 21.21  pursuant to that procedure is effective if: 
 21.22     (1) compliance with the procedure notifies the other party 
 21.23  of the change a reasonable time before the change becomes 
 21.24  effective; and 
 21.25     (2) in a consumer contract, the procedure permits the 
 21.26  consumer to withdraw from the contract if the terms are 
 21.27  unacceptable. 
 21.28     (c) A contractual term that specifies standards for 
 21.29  reasonable notification is enforceable unless the standards are 
 21.30  manifestly unreasonable in light of the commercial circumstances.
 21.31     Sec. 27.  [336.2B-305] [OPEN TERMS.] 
 21.32     (a) An agreement otherwise sufficiently definite to be a 
 21.33  contract is enforceable even if it leaves particulars of 
 21.34  performance open, to be specified by one of the parties, or to 
 21.35  be fixed by agreement. 
 21.36     (b) If the performance required of a party is not fixed or 
 22.1   determinable from the terms of the agreement or this article, 
 22.2   the agreement requires performance that is reasonable in light 
 22.3   of the commercial circumstances. 
 22.4      (c) If a term of an agreement is to be specified by a party:
 22.5      (1) Specification must be made in good faith. 
 22.6      (2) An agreement that provides that the performance of one 
 22.7   party be to the satisfaction or approval of the other requires 
 22.8   performance sufficient to satisfy a reasonable person in the 
 22.9   position of the party whose satisfaction must be met.  However, 
 22.10  the agreement requires performance that satisfies the other 
 22.11  party in fact: 
 22.12     (i) to the extent the agreement requires the party to 
 22.13  provide informational content to be evaluated in reference to 
 22.14  its aesthetics, marketability, appeal, suitability to taste, or 
 22.15  similar characteristics; or 
 22.16     (ii) if the agreement expressly provides that the 
 22.17  performance is to be judged in the "sole discretion" of the 
 22.18  party or words of similar import. 
 22.19     (3) If a specification to be made by one party materially 
 22.20  affects the other party's performance but is not seasonably 
 22.21  made, the other party: 
 22.22     (A) is excused for any resulting delay in its performance; 
 22.23  and 
 22.24     (B) may proceed to perform, suspend performance, or treat 
 22.25  the failure to specify as a breach of contract. 
 22.26     (d) If a term is to be fixed by agreement and the parties 
 22.27  intend not to be bound unless the term is fixed or agreed to, a 
 22.28  contract is not formed if the term is not fixed or agreed to.  
 22.29  In that case, each party shall return or, with the consent of 
 22.30  the other party, destroy all copies of information and other 
 22.31  materials already received or, if unable to do so, pay to the 
 22.32  other party the amount by which it received a benefit from the 
 22.33  information that cannot be returned or destroyed.  The licensor 
 22.34  shall return any portion of the license fee paid on account for 
 22.35  which performance has not been received and retained by the 
 22.36  licensee.  The parties remain bound with respect to any agreed 
 23.1   to confidentiality or similar obligations. 
 23.2      Sec. 28.  [336.2B-306] [OUTPUT, REQUIREMENTS, AND EXCLUSIVE 
 23.3   DEALING.] 
 23.4      (a) A contractual term that measures quantity or volume of 
 23.5   use by the output of the licensor or the requirements of the 
 23.6   licensee means the actual output or requirements that may occur 
 23.7   in good faith.  A party may not offer or demand a quantity or 
 23.8   volume of use unreasonably disproportionate to a stated estimate 
 23.9   or, in the absence of a stated estimate, to any normal or 
 23.10  otherwise comparable previous output or requirements, unless 
 23.11  there are no outputs or requirements in good faith. 
 23.12     (b) An agreement for exclusive dealing imposes an 
 23.13  obligation on a licensor that is the exclusive supplier to use 
 23.14  reasonable commercial efforts to supply, and on a licensee that 
 23.15  is the exclusive distributor to use reasonable commercial 
 23.16  efforts to promote, the information or product commercially. 
 23.17                             B.  Forms 
 23.18     Sec. 29.  [336.2B-307] [ADOPTING TERMS OF RECORDS.] 
 23.19     (a) Except as otherwise provided in subsection (c) and 
 23.20  sections 336.2B-308 and 336.2B-309, a party adopts the terms of 
 23.21  a record, including a standard form, if the party agrees to or 
 23.22  manifests assent to the record at the time of agreement or, if 
 23.23  in light of the circumstances, the party reasonably should have 
 23.24  expected use of a record following the initial agreement and the 
 23.25  party agrees to or manifests assent to the record before or 
 23.26  within a reasonable time after beginning to use the information 
 23.27  or commencing performance. 
 23.28     (b) A term adopted under subsection (a) becomes part of the 
 23.29  contract without regard to the knowledge or understanding of the 
 23.30  individual term by the party assenting to the record and whether 
 23.31  or not the party read the record. 
 23.32     (c) A term of a record which is unenforceable for failure 
 23.33  to satisfy a requirement of another provision of this article, 
 23.34  such as a provision that expressly requires use of conspicuous 
 23.35  language or assent to the term, is not part of the contract. 
 23.36     Sec. 30.  [336.2B-308] [MASS-MARKET LICENSES.] 
 24.1      (a) Except as otherwise provided in this section and 
 24.2   section 336.2B-309, a party adopts the terms of a mass-market 
 24.3   license if the party manifests assent to the license at the time 
 24.4   of agreement or, if in light of the circumstances, the party 
 24.5   reasonably should have expected use of a standard form following 
 24.6   the initial agreement and the party agrees to or manifests 
 24.7   assent to the license before or within a reasonable time after 
 24.8   beginning to use the information or commencing performance. 
 24.9      (b) Terms adopted under subsection (a) include all of the 
 24.10  terms of the license without regard to the knowledge or 
 24.11  understanding of individual terms by the party assenting to the 
 24.12  form.  However, except as otherwise provided in this section, a 
 24.13  term does not become part of the contract if the term creates an 
 24.14  obligation or imposes a limitation which: 
 24.15     (1) the party proposing the form should know would cause an 
 24.16  ordinary and reasonable person acquiring this type of 
 24.17  information and receiving the form to refuse the license if that 
 24.18  party knew that the license contained the particular term; or 
 24.19     (2) conflicts with the previously negotiated terms of 
 24.20  agreement of the parties relating to the transaction. 
 24.21     (c) A term excluded under subsection (b) becomes part of 
 24.22  the contract if the party that did not prepare the form 
 24.23  manifests assent to the term or if, under the circumstances, the 
 24.24  presence of the limitation or obligation contained in the term 
 24.25  was clearly disclosed to the party before it manifested assent 
 24.26  to the license. 
 24.27     (d) A term of a mass-market license which is unenforceable 
 24.28  for failure to satisfy a requirement of another provision of 
 24.29  this article, such as a provision that expressly requires use of 
 24.30  conspicuous language or assent to the term, is not part of the 
 24.31  contract. 
 24.32     (e) The terms of a mass-market license must be interpreted 
 24.33  whenever reasonable as treating in a similar fashion all parties 
 24.34  situated similarly without regard to their knowledge or 
 24.35  understanding of the terms of the record. 
 24.36     (f) A term that states a limitation on reproduction, 
 25.1   distribution, modification, public performance, or other 
 25.2   exclusive rights in the information that would be placed on the 
 25.3   party assenting to the license by copyright or patent law in the 
 25.4   absence of the term does not come within the provisions of 
 25.5   subsection (b)(1). 
 25.6      Sec. 31.  [336.2B-309] [CONFLICTING TERMS.] 
 25.7      (a) If the parties to an agreement made pursuant to section 
 25.8   336.2B-205 exchange standard forms that purport to contain terms 
 25.9   of the agreement and the forms contain varying standard terms, 
 25.10  the following rules apply: 
 25.11     (1) If a party proposes a standard form containing language 
 25.12  which states that the party does not intend to be bound unless 
 25.13  the other party agrees to the terms and the conduct of the party 
 25.14  proposing the conditional form is consistent with the stated 
 25.15  conditions, the terms of that form govern if the other party by 
 25.16  its language or conduct agrees to the form. 
 25.17     (2) In all other cases, terms on which the forms agree 
 25.18  become part of the contract, but the varying standard terms are 
 25.19  not part of the contract unless the party claiming inclusion 
 25.20  establishes that the other party manifested assent to the 
 25.21  varying term; or the records of both parties agree in substance 
 25.22  with respect to the term. 
 25.23     (b) Subject to subsections (d) and (e), in cases governed 
 25.24  by subsection (a)(2), the terms of the contract are: 
 25.25     (1) terms actually agreed to by the parties; 
 25.26     (2) terms included under subsection (a)(2); and 
 25.27     (3) supplementary terms under this article. 
 25.28     (c) In the case of a conflict between terms included under 
 25.29  the provisions of subsection (b), terms under subsection (b)(1) 
 25.30  govern as to all other terms and terms included under subsection 
 25.31  (b)(2) govern terms under subsection (b)(3). 
 25.32     (d) The terms of the contract under subsection (a)(2) 
 25.33  include the terms of the licensor's record relating to the scope 
 25.34  and character of the license to the extent that the terms do not 
 25.35  conflict with the negotiated terms of the agreement. 
 25.36     (e) Contractual terms contained in a record authenticated 
 26.1   by the party to be bound supersede the inclusion or exclusion of 
 26.2   terms under subsection (a) or (b). 
 26.3                          C.  Interpretation 
 26.4      Sec. 32.  [336.2B-310] [INTERPRETATION OF GRANT.] 
 26.5      (a) A license grants rights in the information to the 
 26.6   licensee which are nonexclusive. 
 26.7      (b) Terms dealing with the scope and subject matter of an 
 26.8   agreement must be construed under ordinary principles of 
 26.9   contract interpretation in light of the commercial context. 
 26.10     (c) A grant without qualification of "all possible rights" 
 26.11  or "all possible uses," or a grant in similar terms, covers all 
 26.12  uses considered by the parties as well as all uses in reference 
 26.13  to technologies then existing or developed in the future unless 
 26.14  the language is limited by the agreement. 
 26.15     (d) Subject to sections 336.2B-316, 336.2B-317, and 
 26.16  336.2B-501, an agreement grants all rights described and all 
 26.17  rights within the licensor's control which are necessary to use 
 26.18  the rights expressly included in the transfer of rights in the 
 26.19  manner anticipated by the parties at the time of the agreement. 
 26.20     Sec. 33.  [336.2B-311] [IMPROVEMENTS AND ENHANCEMENTS.] 
 26.21     (a) A continuous access contract grants rights of access 
 26.22  over the duration of the license to the information as modified 
 26.23  from time to time.  An agreement other than a continuous access 
 26.24  contract grants rights in information as it exists at the time 
 26.25  of the grant. 
 26.26     (b) In the case of a license, a licensee may make 
 26.27  modifications enabled by the ordinary use of the information or 
 26.28  necessary to the licensee's use as authorized by the agreement. 
 26.29     (c) In the case of an unrestricted transfer of information, 
 26.30  a licensee may make any modifications consistent with the 
 26.31  intellectual property rights of the licensor. 
 26.32     (d) A licensee is not entitled to rights in improvements or 
 26.33  modifications made by the licensor, and a licensor is not 
 26.34  entitled to rights in improvements or modifications made by the 
 26.35  licensee. 
 26.36     Sec. 34.  [336.2B-312] [RESTRICTIONS ON LOCATION AND USE.] 
 27.1      (a) If an agreement does not specify the location, the 
 27.2   number of uses, or the purposes for which the licensee may use 
 27.3   information, the licensee may use the information any number of 
 27.4   times for any purpose and in any location that does not infringe 
 27.5   any intellectual property right not granted in the agreement. 
 27.6      (b) In a license, a grant contains an implied limitation 
 27.7   that the licensee will not exceed the rights, location, and uses 
 27.8   granted, but permits any lesser use.  A use exceeds an implied 
 27.9   limitation if the use itself as compared to any uses of ideas or 
 27.10  facts obtained through such use results in a more significant 
 27.11  impact on the value of the retained intellectual property rights 
 27.12  of the licensor than does the granted use. 
 27.13     (c) If a license expressly or impliedly limits location, 
 27.14  number of uses, or purposes, exceeding the limits in the license 
 27.15  is a breach of contract. 
 27.16     Sec. 35.  [336.2B-313] [RESTRICTIONS ON USERS.] 
 27.17     (a) If a license expressly limits the persons permitted to 
 27.18  use information, use by a person other than a designated person 
 27.19  is a breach of contract. 
 27.20     (b) Subject to section 336.B-504, a license that does not 
 27.21  limit the persons to which use of information is restricted 
 27.22  other than by identifying the licensee allows use by any person 
 27.23  authorized by the licensee.  A person using the information 
 27.24  pursuant to authorization is bound by the terms of the license 
 27.25  pertaining to use, disclosure, and related restrictions, but 
 27.26  does not undertake responsibility for payments or other 
 27.27  transfers to the licensor unless that undertaking is express. 
 27.28     Sec. 36.  [336.2B-314] [DURATION OF CONTRACT.] 
 27.29     If an agreement does not specify its duration, the 
 27.30  following rules apply: 
 27.31     (1) If the agreement involves a sale of a copy or the 
 27.32  payment of a license fee in a liquidated amount determined at 
 27.33  the outset of the contract, the contractual rights of the 
 27.34  licensee are perpetual, subject to cancellation for breach of 
 27.35  contract by either party. 
 27.36     (2) In all other cases, the duration of the contract is a 
 28.1   reasonable time.  However, if the agreement provides for 
 28.2   successive performances, the agreement may be terminated at will 
 28.3   by either party during that period on reasonable notice to the 
 28.4   other party. 
 28.5                         D.  Confidentiality 
 28.6      Sec. 37.  [336.2B-315] [CONFIDENTIALITY IN GENERAL.] 
 28.7      (a) A party is not obligated to retain in confidence 
 28.8   information given to it by another party. 
 28.9      (b) A term of a license which creates conditions of 
 28.10  confidentiality or nondisclosure is not enforceable if it 
 28.11  imposes or continues those conditions on information that is or 
 28.12  becomes generally known to the public other than through an act 
 28.13  of the party on which duties of confidentiality and 
 28.14  nondisclosure are imposed.  If a combination of items of 
 28.15  information, some of which may be generally known to the public, 
 28.16  is not generally known, the combination is not generally known 
 28.17  to the public for purposes of this section. 
 28.18     (c) If conditions of confidentiality or nondisclosure 
 28.19  exist, the party on which the conditions are imposed may not 
 28.20  disclose the confidential information, except pursuant to an 
 28.21  order of a court of competent jurisdiction or a valid subpoena, 
 28.22  and shall exercise reasonable care to maintain confidentiality, 
 28.23  including giving notice to the other party of its receipt of a 
 28.24  court order or subpoena that may cause disclosure of the 
 28.25  information. 
 28.26     (d) The remedy for breach of a duty of confidentiality may 
 28.27  include compensation based on the benefit received by the party 
 28.28  in breach as a result of the breach.  A remedy under the 
 28.29  agreement or under this article for breach of confidentiality is 
 28.30  not exclusive and does not preclude remedies under other law, 
 28.31  including the law of trade secrets, unless the agreement 
 28.32  expressly so states. 
 28.33     Sec. 38.  [336.2B-316] [NO RIGHT TO UNDERLYING INFORMATION 
 28.34  OR CODE.] 
 28.35     An agreement does not convey a right to the licensee to 
 28.36  receive the source code, object code, schematics, master copy, 
 29.1   other design material, or other information used by the licensor 
 29.2   in creating, developing, or implementing the information or the 
 29.3   system by which access to the information is made available to 
 29.4   the licensee. 
 29.5      Sec. 39.  [336.2B-317] [INFORMATION RIGHTS IN ORIGINATING 
 29.6   PARTY.] 
 29.7      (a) If an agreement requires one party to deliver 
 29.8   commercial, technical, or scientific information to the other 
 29.9   for its use in performing its obligations under the contract or 
 29.10  obligates one party to handle or process commercial data, 
 29.11  including customer accounts and lists, and the receiving party 
 29.12  has reason to know that the information is confidential, the 
 29.13  following rules apply: 
 29.14     (1) The information and any summaries or tabulations based 
 29.15  on the information remain the property of the party delivering 
 29.16  the information or, in the case of commercial data, the party to 
 29.17  whose commercial activities the information relate, and may be 
 29.18  used by the other party only in a manner and for the purposes 
 29.19  authorized by the agreement. 
 29.20     (2) The party receiving, processing, or handling the 
 29.21  information shall use reasonable care to hold the information in 
 29.22  confidence and make it available to be destroyed or returned to 
 29.23  the delivering party according to the agreement or instructions 
 29.24  of the delivering party. 
 29.25     (b) If technical or scientific information is developed 
 29.26  during the performance of the agreement, the following rules 
 29.27  apply: 
 29.28     (1) If information is developed jointly by the parties, 
 29.29  rights in the information are held jointly by both parties 
 29.30  subject to the obligation of each to handle the information in a 
 29.31  manner consistent with protection of the reasonable expectations 
 29.32  of the other respecting confidentiality. 
 29.33     (2) If the information is developed by one of the parties, 
 29.34  the information is the property of that party. 
 29.35     (c) The rules in this section do not apply to transactional 
 29.36  data. 
 30.1                           E.  Electronics 
 30.2      Sec. 40.  [336.2B-318] [ELECTRONIC VIRUSES.] 
 30.3      (a) Except as otherwise provided subsection (b), each party 
 30.4   undertakes that its performance or electronic messages will not 
 30.5   introduce an undisclosed, extraneous program, code, or virus 
 30.6   that may be reasonably expected to damage or interfere with the 
 30.7   use of data, software, systems, or operations of the other party.
 30.8      (b) A party is not liable under subsection (a) if: 
 30.9      (1) the party exercised reasonable care to exclude the 
 30.10  program, code, or virus; or 
 30.11     (2) in a case other than the physical delivery of a copy 
 30.12  involving a mass-market license, the circumstances or terms of 
 30.13  the agreement give the other party reason to know that action 
 30.14  was not taken to ensure exclusion of the program, code, or virus 
 30.15  or that a clear risk exists that they have not been excluded. 
 30.16     (c) In determining whether reasonable care has been 
 30.17  exercised under subsection (b), the court shall consider the 
 30.18  nature of the party, type and value of the transaction, and 
 30.19  general standards of practice prevailing among persons of 
 30.20  similar type for similar transactions at the time of the 
 30.21  performance or the transmission of the message. 
 30.22     (d) If the performance is a transfer of rights, the 
 30.23  obligation under subsection (a) relates to the time the transfer 
 30.24  of rights is completed.  In all other cases, the obligation 
 30.25  relates to the time the message or performance is received. 
 30.26     Sec. 41.  [336.2B-319] [ELECTRONIC REGULATION OF 
 30.27  PERFORMANCE.] 
 30.28     (a) Subject to subsection (b), a party entitled to enforce 
 30.29  a limitation or restriction in a license may include in the 
 30.30  information, code, or an electronic or other device that 
 30.31  restricts use consistent with the terms of the agreement. 
 30.32     (b) A term in a license authorizing the use of a code or a 
 30.33  device to enforce a limitation is required to enforce rights 
 30.34  under subsection (a), unless: 
 30.35     (1) the code or device or the licensor provides reasonable 
 30.36  notice to the licensee before preventing further use at the 
 31.1   expiration of the term of the license for that use; 
 31.2      (2) the code or device merely prevents use of the 
 31.3   information inconsistent with the license but does not otherwise 
 31.4   alter the information; or 
 31.5      (3) the information is obtained for a stated period of 
 31.6   time, less than five days, and the code or device merely 
 31.7   enforces that time limitation. 
 31.8      (c) Operation of a code or device that restricts use 
 31.9   consistent with a term of the agreement is not a breach of 
 31.10  contract, and the party that included the code or device is not 
 31.11  liable for any loss created by its operation.  However, 
 31.12  operation of a code or device that prevents use permitted by the 
 31.13  agreement is a breach of contract. 
 31.14     (d) This section does not preclude electronic replacement 
 31.15  or disabling of an earlier version of information by the 
 31.16  licensor with a new version of the information pursuant to an 
 31.17  agreement. 
 31.18     Sec. 42.  [336.2B-320] [ACKNOWLEDGMENT OF ELECTRONIC 
 31.19  MESSAGE.] 
 31.20     (a) If the originator of an electronic message requests or 
 31.21  has agreed with the addressee of the message that receipt of the 
 31.22  message be acknowledged, and the originator indicated in the 
 31.23  message or otherwise that the message was conditional on receipt 
 31.24  of an acknowledgment, the message has no legal effect. 
 31.25     (b) If the originator did not state that the message is 
 31.26  conditional on acknowledgment and acknowledgment has not been 
 31.27  received within a reasonable time after the message was sent, 
 31.28  the originator may give notice to the addressee that it has not 
 31.29  received acknowledgment and specifying a further reasonable time 
 31.30  within which acknowledgment must be received, or the message 
 31.31  will be treated as of no binding effect, and if acknowledgment 
 31.32  is not received within that time, may treat the message as if it 
 31.33  had not been sent. 
 31.34     (c) If the terms of the message specify a time for receipt 
 31.35  of acknowledgment and receipt does not occur within that time, 
 31.36  the originator may exercise the options in subsection (a). 
 32.1      (d) If the originator timely receives acknowledgment of 
 32.2   receipt, that acknowledgment creates a presumption that the 
 32.3   message was received by the addressee but does not in itself 
 32.4   imply that the content of the message sent corresponds to the 
 32.5   content of the message received. 
 32.6      Sec. 43.  [336.2B-321] [FINANCE LEASE; RIGHTS OF PARTIES.] 
 32.7      (a) A finance lease relating to licensed information is 
 32.8   conditional on the licensee's assent to the license. 
 32.9      (b) The lessor is subject to the terms of any license 
 32.10  between the licensor and the licensee and to the intellectual 
 32.11  property rights of the licensor. 
 32.12     (c) If the licensor contracts directly with the licensee in 
 32.13  a finance lease transaction: 
 32.14     (1) the lessor is not bound by the terms of, and does not 
 32.15  receive the benefits of, the license, unless the lessor and the 
 32.16  licensee adopt those terms as part of the finance lease; 
 32.17     (2) the licensee's rights to use the information and 
 32.18  obligations pertaining thereto, are governed by the license and, 
 32.19  to the extent not inconsistent with the license, the terms of 
 32.20  the finance lease; and 
 32.21     (3) the licensor's obligations to the licensee are subject 
 32.22  to the terms of the finance lease between the parties and any 
 32.23  rights of the licensor under other law. 
 32.24     (d) If a finance lessor enters into a license for the 
 32.25  information and transfers the information and the license to the 
 32.26  licensee pursuant to a finance lease: 
 32.27     (1) the licensee becomes a party to the license and obtains 
 32.28  all the benefits and is bound by all of the limitations and 
 32.29  obligations of a licensee under the license; and 
 32.30     (2) when the licensee becomes a party to the license, the 
 32.31  lessor is governed by subsection (c)(1). 
 32.32     (e) Modification of the license by agreement of the 
 32.33  licensor and the lessor without the consent of the licensee is 
 32.34  ineffective to alter the rights of the licensee after the 
 32.35  licensee accepts the transfer of rights.  Modification of the 
 32.36  license by agreement of a licensor with notice of the finance 
 33.1   lease and the licensee is effective to the extent that the 
 33.2   modification does not materially impair the lessor's right to 
 33.3   receive payments owed to it. 
 33.4      Sec. 44.  [336.2B-322] [FINANCE LEASE; RIGHT TO 
 33.5   POSSESSION.] 
 33.6      (a) In a finance lease, as between the lessor and the 
 33.7   licensee, the lessor is entitled to possession of any copies, 
 33.8   upgrades, new versions, or other modifications of the 
 33.9   information provided by the licensor pursuant to the license.  
 33.10  On receipt of reasonable notice from the lessor requiring it to 
 33.11  do so, the licensor shall deliver the upgrades, new versions, or 
 33.12  other modifications to the lessor in which case delivery to the 
 33.13  lessor satisfies the licensor's delivery obligations under the 
 33.14  license. 
 33.15     (b) On material breach of the finance lease by the 
 33.16  licensee, the lessor may cancel the lease. 
 33.17     (c) On termination or cancellation of a finance lease: 
 33.18     (1) as between the lessor and the licensee, the lessor is 
 33.19  entitled to possession of all copies of licensed information and 
 33.20  materials related thereto that are to be returned, including any 
 33.21  upgrades or new versions provided to the licensee by the 
 33.22  licensor pursuant to the terms of the license; and 
 33.23     (2) a lessor remains subject to the terms of the license 
 33.24  and may not sell, transfer, or otherwise convey rights in the 
 33.25  copies or the information without the consent of the licensor 
 33.26  unless the conditions for transfer under section 336.2B-502 are 
 33.27  met. 
 33.28     Sec. 45.  [336.2B-323] [FINANCE LEASES; IRREVOCABLE 
 33.29  PROMISES.] 
 33.30     (a) In the case of a finance lease that does not involve a 
 33.31  consumer license, the licensee's promises to the lessor under 
 33.32  the lease and any related agreements incurred at the time of 
 33.33  acquisition become irrevocable and independent upon the 
 33.34  licensee's acceptance of the transfer of rights and payment by 
 33.35  the lessor to the licensor. 
 33.36     (b) A promise that has become irrevocable and independent 
 34.1   under subsection (a): 
 34.2      (1) is effective and enforceable between the parties and by 
 34.3   or against third parties except the licensor, but including an 
 34.4   assignee of the parties; and 
 34.5      (2) is not subject to cancellation, termination, 
 34.6   modification, repudiation, excuse, or substitution without the 
 34.7   consent of the party to which the promise runs except with 
 34.8   respect to provisions in and performance of the lease contract. 
 34.9      (c) This section does not affect the validity under any 
 34.10  other law of a covenant making a licensee's promises irrevocable 
 34.11  and independent. 
 34.12                               Part 4
 34.13                             WARRANTIES
 34.14     Sec. 46.  [336.2B-401] [WARRANTY AND OBLIGATIONS CONCERNING 
 34.15  AUTHORITY AND NONINFRINGEMENT.] 
 34.16     (a) Except with respect to a claim of infringement or the 
 34.17  like, a licensor warrants that the licensor has authority to 
 34.18  make the transfer and that it and any person that holds a claim 
 34.19  or interest in the information that arose from an act or 
 34.20  omission of the licensor will not interfere with the licensee's 
 34.21  enjoyment of its rights under the contract. 
 34.22     (b) A licensor that is a merchant regularly dealing in 
 34.23  information of the kind warrants that, at the time of the 
 34.24  transfer, the licensor has no reason to know that the transfer, 
 34.25  any copies transferred by the licensor, or the information, when 
 34.26  used in any authorized use intended by the licensee and known to 
 34.27  the licensor, infringes or will infringe an existing 
 34.28  intellectual property right of a third party, except as 
 34.29  disclosed to or otherwise known by the licensee. 
 34.30     (c) The warranty under subsection (b) does not apply to a 
 34.31  license of a patent accomplished by the making of a contract 
 34.32  without further obligation by the transferor and without any 
 34.33  agreement by the licensor to provide to the licensee any 
 34.34  property or services to enable the licensee to exercise the 
 34.35  rights transferred. 
 34.36     (d) A licensee that furnishes specifications to a licensor 
 35.1   shall hold the licensor harmless against any claim by way of 
 35.2   infringement or the like that the licensee had reason to know 
 35.3   would arise out of compliance with the specifications.  However, 
 35.4   if the agreement allows the licensor to choose the method or 
 35.5   approach to meet the specifications, the licensee is not liable 
 35.6   for losses caused to the licensor arising out of the licensor's 
 35.7   choice if: 
 35.8      (1) more than one commercially reasonable alternative 
 35.9   existed and at least one of the alternatives would not infringe; 
 35.10  and 
 35.11     (2) the licensee had reason to know that the method or 
 35.12  approach would infringe and the licensee disclosed this to the 
 35.13  licensor. 
 35.14     (e) If information transferred under an exclusive license 
 35.15  is for redistribution by the licensee, the licensor warrants 
 35.16  that the intellectual property rights that are the subject of 
 35.17  the license are valid and exclusive to the licensor.  In all 
 35.18  other cases, the licensor of an intellectual property right does 
 35.19  not warrant that its rights are exclusive. 
 35.20     (f) A warranty under this section may be disclaimed or 
 35.21  modified only by express language or by circumstances giving the 
 35.22  licensee reason to know that the licensor does not claim that 
 35.23  competing claims do not exist or that the licensor purports to 
 35.24  transfer only the rights that it has.  In an electronic 
 35.25  transaction that does not involve review of the record by an 
 35.26  individual, the language is sufficient if it is conspicuous.  
 35.27  Otherwise, language in a record is sufficient if it states 
 35.28  "There is no warranty of title or authority" or "The information 
 35.29  does not infringe the rights of others," or words of similar 
 35.30  import. 
 35.31     Sec. 47.  [336.2B-402] [EXPRESS WARRANTIES.] 
 35.32     (a) Except with respect to published information content, a 
 35.33  licensor creates an express warranty as follows: 
 35.34     (1) An affirmation of fact, promise, or description of 
 35.35  information made by the licensor to a licensee which relates to 
 35.36  the information and becomes part of the basis of the bargain 
 36.1   creates an express warranty that the information and any 
 36.2   services required under the agreement will conform to the 
 36.3   affirmation, promise, or description. 
 36.4      (2) A sample, model, or demonstration of a final product 
 36.5   that is made part of the basis of the bargain creates an express 
 36.6   warranty that the performance of the information will reasonably 
 36.7   conform to the performance illustrated by the model, sample, or 
 36.8   demonstration, taking into account such differences between the 
 36.9   sample, model, or demonstration and the information as it would 
 36.10  be used as would be apparent to a reasonable person in the 
 36.11  position of the licensee. 
 36.12     (b) The licensor need not use formal words, such as 
 36.13  "warrant" or "guarantee," or state a specific intention to make 
 36.14  a warranty.  However, a mere affirmation of the value of the 
 36.15  information or a statement purporting to be the licensor's 
 36.16  opinion or commendation of the information does not create a 
 36.17  warranty. 
 36.18     Sec. 48.  [336.2B-403] [IMPLIED WARRANTY; QUALITY OF 
 36.19  COMPUTER PROGRAM.] 
 36.20     A licensor that is a merchant with respect to a mass-market 
 36.21  license of a computer program warrants that the computer program 
 36.22  and media are merchantable.  To be merchantable, the computer 
 36.23  program and any tangible media containing the program must: 
 36.24     (1) pass without objection in the trade under the contract 
 36.25  description; 
 36.26     (2) be fit for the ordinary purposes for which it is 
 36.27  distributed; 
 36.28     (3) substantially conform to promises or affirmations of 
 36.29  fact made on the container, documentation, or label, if any; 
 36.30     (4) in the case of multiple copies, consist of copies that 
 36.31  are, within the variations permitted by the agreement, of even 
 36.32  kind, quality, and quantity, within each unit and among all 
 36.33  units involved; and 
 36.34     (5) be adequately packaged and labeled as the agreement or 
 36.35  circumstances may require. 
 36.36     (b) In cases not governed by subsection (a), if a licensor 
 37.1   that is a merchant with respect to computer programs of that 
 37.2   kind delivers a program to a licensee, the licensor warrants 
 37.3   that any media on which the program is transferred will be 
 37.4   merchantable and that the computer program will perform in 
 37.5   substantial conformance with any promises or affirmations of 
 37.6   fact contained in the documentation or specifications provided 
 37.7   by the licensor at or before the delivery of the program.  An 
 37.8   affirmation of the value of the program or a statement of 
 37.9   opinion or commendation does not create a warranty. 
 37.10     Sec. 49.  [336.2B-404] [IMPLIED WARRANTY; INFORMATIONAL 
 37.11  CONTENT AND SERVICES.] 
 37.12     (a) Subject to subsections (b) and (c), a merchant that 
 37.13  provides services, access, informational content, data 
 37.14  processing, or the like, warrants that there is no inaccuracy, 
 37.15  flaw, or other error in the informational content caused by its 
 37.16  failure to exercise reasonable care and effort in its 
 37.17  performance in collecting, compiling, transcribing, or 
 37.18  transmitting the information.  This warranty is not breached 
 37.19  merely because the performance does not yield a result 
 37.20  consistent with the objectives of the licensee or because the 
 37.21  informational content is not accurate or is incomplete. 
 37.22     (b) A warranty does not arise under subsection (a) for: 
 37.23     (1) the aesthetic value, commercial success, or market 
 37.24  appeal of the content; 
 37.25     (2) published informational content; 
 37.26     (3) informational content that is merely incidental to a 
 37.27  transfer of rights and does not constitute a material portion of 
 37.28  the value in the transaction; or 
 37.29     (4) informational content prepared or created by a third 
 37.30  party, if the party, acting as a conduit, provided no more than 
 37.31  editorial services with respect to the content, and made the 
 37.32  informational content available in a form that identifies it as 
 37.33  being the work of the third party, except to the extent that the 
 37.34  lack of care or workmanlike effort that caused the loss occurred 
 37.35  in the party's performance in providing the content. 
 37.36     (c) The liability of a third party under this section is 
 38.1   not excluded by the use of a conduit described in subsection 
 38.2   (b)(4) or by the fact that the conduit is not liable for errors 
 38.3   under that subsection. 
 38.4      Sec. 50.  [336.2B-405] [IMPLIED WARRANTY; EFFORT TO ACHIEVE 
 38.5   PURPOSE.] 
 38.6      If a licensor at the inception of the contract has reason 
 38.7   to know of any particular purpose for which the information is 
 38.8   required and that the licensee is relying on the expertise of 
 38.9   the licensor to develop, design, select, compile, or 
 38.10  substantially modify the information to meet the licensee's 
 38.11  purposes, the licensor makes an implied warranty that it will 
 38.12  make a reasonable effort to achieve that purpose.  However, if, 
 38.13  from all of the circumstances, it appears that the licensor 
 38.14  agreed not to be paid in full unless the information fulfills 
 38.15  the licensee's purposes, the licensor warrants that the 
 38.16  information will meet that purpose. 
 38.17     Sec. 51.  [336.2B-406] [DISCLAIMER OR MODIFICATION OF 
 38.18  WARRANTY.] 
 38.19     (a) Language or conduct relevant to the creation of an 
 38.20  express warranty and language or conduct tending to disclaim or 
 38.21  modify the warranty must be construed wherever reasonable as 
 38.22  consistent with each other.  Subject to section 336.2B-301 with 
 38.23  regard to parol or extrinsic evidence, language or conduct 
 38.24  disclaiming or modifying a warranty is inoperative to the extent 
 38.25  that such a construction is unreasonable. 
 38.26     (b) Subject to subsection (c), to disclaim or to modify an 
 38.27  implied warranty, the following rules apply: 
 38.28     (1) Except as provided in paragraphs (5) and (6), language 
 38.29  of disclaimer or modification must be in a record. 
 38.30     (2) To disclaim or modify an implied warranty under section 
 38.31  336.2B-403 or 336.2B-404, language that mentions "warranty of 
 38.32  quality," "warranty of merchantability," "warranty of accuracy," 
 38.33  or words of similar import, is sufficient.  Language sufficient 
 38.34  to disclaim one of the warranties is sufficient to disclaim the 
 38.35  other. 
 38.36     (3) To disclaim or modify an implied warranty arising under 
 39.1   section 336.2B-405, stating "There is no warranty that the 
 39.2   subject of this transaction will fulfill any of your particular 
 39.3   purposes or needs," or language of similar import, is sufficient.
 39.4      (4) All implied warranties are disclaimed or modified only 
 39.5   by specific language complying with the paragraphs (1) through 
 39.6   (3) or other language that in common understanding or under the 
 39.7   circumstances calls the licensee's attention to the exclusion of 
 39.8   all warranties.  The expression that the information is provided 
 39.9   "as is" or "with all faults" or similar language excludes 
 39.10  warranties under sections 336.2B-403 and 336.2B-404. 
 39.11     (5) An implied warranty may be disclaimed or modified by 
 39.12  course of performance, course of dealing, or usage of trade. 
 39.13     (c) In a mass-market license, language that disclaims or 
 39.14  modifies an implied warranty must comply with subsection (b) and 
 39.15  be conspicuous.  To disclaim all implied warranties in a 
 39.16  mass-market license, other than the warranty in section 
 39.17  336.2B-401, language in a record is sufficient if it states:  
 39.18  "Except for express warranties stated in this contract, if any, 
 39.19  this information is being provided with all faults, and the 
 39.20  entire risk as to satisfactory quality, performance, accuracy, 
 39.21  and effort is with the user," or words of similar import. 
 39.22     (d) If a contract requires ongoing performance or a series 
 39.23  of performances by the licensor, language of disclaimer that 
 39.24  complies with this section is effective with respect to all 
 39.25  performance that occurs after the contract is formed. 
 39.26     (e) A contractual term disclaiming implied warranties that 
 39.27  complies with this section is not subject to exclusion under 
 39.28  section 336.2B-308. 
 39.29     Sec. 52.  [336.2B-407] [MODIFICATION OF COMPUTER PROGRAM.] 
 39.30     Modification of a computer program by a licensee voids any 
 39.31  warranties, express or implied, regarding the performance of the 
 39.32  modified copy of the program unless the licensor previously 
 39.33  agreed that the modification would not void the warranty or the 
 39.34  modification was made by using the capabilities of the program 
 39.35  intended for those purposes in the ordinary course of operation 
 39.36  of the program.  A modification occurs if a licensee knowingly 
 40.1   alters or adds code to the computer program. 
 40.2      Sec. 53.  [336.2B-408] [CUMULATION AND CONFLICT OF 
 40.3   WARRANTIES.] 
 40.4      Warranties, whether express or implied, must be construed 
 40.5   as consistent with each other and as cumulative.  However, if 
 40.6   that construction is unreasonable, the intent of the parties 
 40.7   determines which warranty prevails.  In ascertaining that 
 40.8   intent, the following rules apply: 
 40.9      (1) Exact or technical specifications prevail over an 
 40.10  inconsistent sample, model, demonstration, or general language 
 40.11  of description. 
 40.12     (2) A sample, model, or demonstration prevails over 
 40.13  inconsistent general language of description. 
 40.14     (3) An express warranty prevails over an inconsistent 
 40.15  implied warranty. 
 40.16     Sec. 54.  [336.2B-409] [THIRD-PARTY BENEFICIARIES OF 
 40.17  WARRANTY.] 
 40.18     (a) A warranty made to or for the benefit of a licensee 
 40.19  extends to persons for whose benefit the licensor intends to 
 40.20  supply the information, directly or indirectly, and which use 
 40.21  the information in a transaction or application in which the 
 40.22  licensor intends the information to be used. 
 40.23     (b) For purposes of this section, a licensor is deemed to 
 40.24  have intended to supply the information to any individual who is 
 40.25  in the immediate family or household of the licensee if it was 
 40.26  reasonable to expect that the individual would rightfully use 
 40.27  the copy of the information delivered to the licensee. 
 40.28     (c) A disclaimer or modification of a warranty, or of 
 40.29  rights and remedies, which is effective against the licensee is 
 40.30  also effective against a beneficiary under this section.  An 
 40.31  expressed intent that there are no third-party beneficiaries 
 40.32  excludes any obligation or liability under the contract with 
 40.33  respect to third parties other than the parties described in 
 40.34  subsection (b). 
 40.35                               Part 5
 40.36                         TRANSFER OF RIGHTS
 41.1      Sec. 55.  [336.2B-501] [TITLE TO RIGHTS AND COPIES.] 
 41.2      (a) If a licensee receives title to a copy from the owner 
 41.3   of intellectual property rights or an authorized person, the 
 41.4   licensee receives all of the rights of an owner of a copy under 
 41.5   federal law. 
 41.6      (b) If an agreement transfers title to intellectual 
 41.7   property rights and does not specify when title is to pass, 
 41.8   title passes when the information has been so far identified to 
 41.9   the contract as to be distinguishable in fact from similar 
 41.10  property, even if it has not been fully completed and any 
 41.11  required delivery has not yet occurred. 
 41.12     (c) Transfer of title to or possession of a copy of 
 41.13  information does not transfer ownership of intellectual property 
 41.14  rights in the information. 
 41.15     (d) In a license, the following rules apply to copies of 
 41.16  information: 
 41.17     (1) A licensee's right to possession or control of a copy 
 41.18  is governed by the contract and does not depend on title to the 
 41.19  copy. 
 41.20     (2) Title to a copy is determined by the contract.  In the 
 41.21  absence of contractual provisions: 
 41.22     (A) If the copy remains in the possession of the licensor, 
 41.23  title to the copy remains in the licensor. 
 41.24     (B) Physical transfer of a copy from the licensor to the 
 41.25  licensee under a mass market license or otherwise transfers 
 41.26  title to the copy on delivery to the licensee. 
 41.27     (C) Transfer of a copy by electronic means to the licensee 
 41.28  transfers title of the copy if the transfer constitutes a first 
 41.29  sale under copyright law. 
 41.30     (3) If a license involves intellectual property rights of 
 41.31  the licensor, reservation of title to a copy reserves title in 
 41.32  the original copy and any copies made by the licensee. 
 41.33     Sec. 56.  [336.2B-502] [ASSIGNMENT OR TRANSFER OF PARTY'S 
 41.34  INTEREST.] 
 41.35     (a) Except as otherwise provided in this section, a party's 
 41.36  rights under a contract may be assigned unless the assignment 
 42.1   would materially change the duty of the other party, materially 
 42.2   increase the burden or risk imposed on the other party, disclose 
 42.3   or threaten to disclose trade secrets or confidential 
 42.4   information of the other party, or materially impair the other 
 42.5   party's likelihood of obtaining return performance. 
 42.6      (b) Except as provided in section 336.2B-502A, a licensee 
 42.7   may not transfer, voluntarily or involuntarily, rights under a 
 42.8   nonexclusive license without the consent of the party that holds 
 42.9   intellectual property rights in the information, and the consent 
 42.10  of any finance lessor or secured creditor with an interest in 
 42.11  the licensee's rights under the contract, unless: 
 42.12     (1) the licensee received delivery of a copy subject to a 
 42.13  mass-market license and transfers the original copy and all 
 42.14  other copies made by it; or 
 42.15     (2) the licensee received title to the copy of the 
 42.16  information through a transfer from the party that holds 
 42.17  intellectual property rights in the information, the license did 
 42.18  not preclude transfer of the licensee's rights, and the transfer 
 42.19  of the licensee's rights complies with applicable provisions of 
 42.20  federal law to make the transfer. 
 42.21     (c) A licensor's rights under a contract may be transferred 
 42.22  voluntarily or involuntarily, unless the transfer: 
 42.23     (1) creates a delegation of a material performance of the 
 42.24  licensor; or 
 42.25     (2) extends to information in which the licensee designated 
 42.26  as confidential or otherwise protected under intellectual 
 42.27  property law and the licensee has not consented to transfer. 
 42.28     (d) Subject to subsection (a), either party may transfer 
 42.29  the right to receive payment from the other party. 
 42.30     (e) A transfer made in violation of this section is 
 42.31  ineffective. 
 42.32     Sec. 57.  [336.2B-502A] [SECURITY INTERESTS IN NONEXCLUSIVE 
 42.33  LICENSES.] 
 42.34     (a) The creation or enforcement of a security interest in 
 42.35  the licensee's rights under a nonexclusive license is effective 
 42.36  without the consent of the licensor if a transfer of the 
 43.1   licensee's interest would be effective under section 
 43.2   336.2B-502.  In all other cases, the creation or enforcement of 
 43.3   a security interest in the licensee's rights is effective only 
 43.4   to the extent that it does not result in: 
 43.5      (1) an actual transfer of the use of, or access to, the 
 43.6   information; or 
 43.7      (2) an actual delegation of a material performance or 
 43.8   obligation of the licensee. 
 43.9      (b) A creditor that creates or enforces a security interest 
 43.10  under subsection (a) and any transferee thereof is subject to 
 43.11  the terms of the license regarding the transfer, use, 
 43.12  possession, or control of the information. 
 43.13     (c) In the event of a default, as between the creditor and 
 43.14  the licensee, the creditor has a right to possession of any 
 43.15  copies of the information and any materials related thereto 
 43.16  covered by its security interest.  The creditor remains subject 
 43.17  to the terms of the license and may not sell or otherwise 
 43.18  transfer rights in the copies or the information without the 
 43.19  consent of the licensor unless the conditions for transfer under 
 43.20  section 336.2B-502 are met. 
 43.21     Sec. 58.  [336.2B-503] [CONTRACTUAL RESTRICTIONS ON 
 43.22  TRANSFER.] 
 43.23     (a) Except as otherwise provided in subsection (b), a 
 43.24  contractual restriction or prohibition on transfer of an 
 43.25  interest of a party to a contract or of a licensor's ownership 
 43.26  of intellectual property rights in information that is the 
 43.27  subject of a license is enforceable. 
 43.28     (b) The following contractual restrictions are not 
 43.29  enforceable: 
 43.30     (1) A term that prohibits a party's assignment of or 
 43.31  creation of a security interest in an account or in a general 
 43.32  intangible for money due or which requires the other party's 
 43.33  consent to such an assignment or security interest. 
 43.34     (2) A term that prohibits creation or enforcement of a 
 43.35  security interest except to the extent that creation or 
 43.36  enforcement would be precluded in the absence of the term under 
 44.1   section 336.2B-502 or 336.2B-502A. 
 44.2      (c) A transfer made in breach of an enforceable provision 
 44.3   that prohibits voluntary or involuntary transfer of an interest 
 44.4   of a party under a contract is ineffective. 
 44.5      Sec. 59.  [336.2B-504] [DELEGATION OF PERFORMANCE; 
 44.6   SUBLICENSE.] 
 44.7      A party may delegate or sublicense its performance to 
 44.8   another person unless the other party has a substantial interest 
 44.9   in having the original promisor perform or directly supervise or 
 44.10  control the performance or the contract prohibits delegation or 
 44.11  sublicensing. 
 44.12     Sec. 60.  [336.2B-505] [EFFECT OF ASSIGNMENT OR 
 44.13  DELEGATION.] 
 44.14     (a) Unless an assignment is limited to creating a security 
 44.15  interest, acceptance of the assignment of contractual rights 
 44.16  constitutes a promise by the assignee to perform the 
 44.17  accompanying duties of the assignor.  The promise is enforceable 
 44.18  by the assignor or by any other party to the contract. 
 44.19     (b) Assignment, delegation, or sublicense does not relieve 
 44.20  the assignor or delegator of any duty under the contract to pay 
 44.21  or perform, or of liability for breach of contract, except to 
 44.22  the extent the other party agrees. 
 44.23     Sec. 61.  [336.2B-506] [PRIORITY OF TRANSFER BY LICENSOR.] 
 44.24     (a) A licensor's transfer, whether voluntary or 
 44.25  involuntary, of its ownership of intellectual property rights, 
 44.26  other than by the creation or enforcement of a security 
 44.27  interest, is subject to a prior nonexclusive license if the 
 44.28  nonexclusive license is in a record authenticated and executed 
 44.29  by the licensor before the transfer of ownership. 
 44.30     (b) A security interest created by a licensor or a transfer 
 44.31  of ownership under a security interest in information or in 
 44.32  copies of the information is subordinate to a nonexclusive 
 44.33  license which: 
 44.34     (1) was authorized by the secured party; 
 44.35     (2) was in the ordinary course of the licensor's business; 
 44.36  or 
 45.1      (3) involved a transfer of rights completed before the 
 45.2   security interest was perfected. 
 45.3      (c) For purposes of this section, a transfer, including 
 45.4   creation of a security interest, for which federal law requires 
 45.5   filing or a similar act to attain priority against other 
 45.6   transfers of ownership does not occur until the filing or 
 45.7   similar act occurs. 
 45.8      Sec. 62.  [336.2B-507] [PRIORITY OF TRANSFERS BY LICENSEE.] 
 45.9      (a) In a license, a creditor or other transferee of a 
 45.10  licensee acquires no interest in information, copies, or rights 
 45.11  held by the licensee unless the conditions for an effective 
 45.12  transfer under this article and the license are satisfied.  
 45.13     (b) A creditor or other transferee of a licensee takes 
 45.14  subject to the terms of the license. 
 45.15     (c) Except for rights under trade secret law, a licensee 
 45.16  that acquires a copy that is subject to the intellectual 
 45.17  property rights of any person acquires only such rights to use 
 45.18  the information as its licensor was authorized to transfer and 
 45.19  as limited by the terms of the particular license agreement 
 45.20  under which the licensee acquires the copy. 
 45.21                               Part 6 
 45.22                            PERFORMANCE 
 45.23                            A.  General 
 45.24     Sec. 63.  [336.2B-601] [PERFORMANCE OF CONTRACT.] 
 45.25     (a) A party shall perform in a manner that conforms to the 
 45.26  terms of the contract and, in the absence of terms, in a manner 
 45.27  and with a quality that is reasonable in light of the 
 45.28  circumstances including the ordinary standards of the relevant 
 45.29  trade. 
 45.30     (b) A party's duty to perform, other than with respect to 
 45.31  contractual use restrictions, is contingent on there being no 
 45.32  uncured material breach by the other party of its obligations or 
 45.33  duties that precede in time the party's particular performance.  
 45.34  In a mass-market license, if the performance consists of 
 45.35  delivery of a copy that constitutes the initial transfer of 
 45.36  rights, the licensee need not accept if the performance does not 
 46.1   conform to the contract. 
 46.2      (c) If a party is subject to contractual use restrictions 
 46.3   or required to render other future or ongoing performance, the 
 46.4   party's right to exercise the rights under the contract is 
 46.5   contingent on there being no uncured material breach of its 
 46.6   obligations or duties. 
 46.7      (d) If a party breaches its obligations or duties, 
 46.8   including by failure to comply with any contractual use 
 46.9   restrictions, the aggrieved party may: 
 46.10     (1) suspend its performance, other than compliance with 
 46.11  contractual use restrictions, and demand assurance of future 
 46.12  performance pursuant to section 336.2B-622; or 
 46.13     (2) exercise its rights on breach of contract under this 
 46.14  article or the terms of the agreement, but the aggrieved party 
 46.15  may cancel only if the agreement so provides or the breach is 
 46.16  material and has not been cured. 
 46.17     (e) For purposes of this section, "contractual use 
 46.18  restrictions" include obligations of nondisclosure and 
 46.19  confidentiality and limitations on scope, manner, method, or 
 46.20  location of use to the extent that those obligations or duties 
 46.21  are created by the contract. 
 46.22     Sec. 64.  [336.2B-602] [TRANSFER OF RIGHTS; LICENSOR'S 
 46.23  OBLIGATIONS.] 
 46.24     (a) If a contract requires a transfer of rights, a licensor 
 46.25  must complete the transfer of rights.  A transfer of rights 
 46.26  occurs when, pursuant to a contract, a licensor completes the 
 46.27  acts required to make information available to a licensee and 
 46.28  gives the licensee any notice reasonably necessary to make it 
 46.29  aware of that occurrence.  If no act is required to make 
 46.30  information available, the transfer of rights occurs when the 
 46.31  contract becomes enforceable between the parties. 
 46.32     (b) If the information is made available by delivery of a 
 46.33  copy, the following rules apply: 
 46.34     (1) If the contract is silent as to delivery: 
 46.35     (A) in the case of physical transfer of copies, the 
 46.36  licensor shall make the copies available to the licensee at the 
 47.1   licensor's place of business or, if it has none, its residence, 
 47.2   but if the copies are identified at the time of contracting and 
 47.3   located elsewhere, the licensor shall make the copies available 
 47.4   at that place; and 
 47.5      (B) in the case of transfer of copies by electronic means, 
 47.6   the licensor shall make the information available in an 
 47.7   information processing system designated by the licensor and 
 47.8   provide the licensee with authorization codes, addresses, or any 
 47.9   other materials necessary to obtain the information. 
 47.10     (2) If the contract requires or authorizes delivery of 
 47.11  copies held by a third party which are to be delivered without 
 47.12  being moved, the licensor shall deliver any documents, 
 47.13  authorizations, addresses, access codes, or other materials 
 47.14  necessary for the licensee to obtain the copies. 
 47.15     (3) If the contract requires or authorizes the licensor to 
 47.16  send copies of the information to the licensee or to a third 
 47.17  party but does not expressly require the licensor to deliver 
 47.18  them to a destination: 
 47.19     (A) in the case of physical transfer of copies, the 
 47.20  licensor shall put the copies in the possession of a carrier, 
 47.21  make such a contract as is reasonable for their transportation 
 47.22  to the licensee or the third party with the costs of the 
 47.23  shipment to be borne by the licensee, and deliver any documents 
 47.24  necessary to obtain the copies from the carrier; and 
 47.25     (B) in the case of transfer of copies by electronic means, 
 47.26  the licensor shall initiate an appropriate transmission of the 
 47.27  information to the licensee or the third party. 
 47.28     (c) If a transfer of rights is to occur by making access 
 47.29  available to the licensee, a licensor shall complete such acts 
 47.30  as are necessary to make access available, including providing 
 47.31  the licensee with any documents, authorizations, addresses, 
 47.32  access codes, or other materials necessary for the licensee to 
 47.33  obtain access. 
 47.34     (d) In electronic transmission or delivery, information 
 47.35  must be made available in a manner consistent with the 
 47.36  technological capabilities of the receiving party that are known 
 48.1   to the licensor or the ordinary methods in the trade or industry 
 48.2   of making transfers of the particular kind. 
 48.3      Sec. 65.  [336.2B-603] [PERFORMANCE AT SINGLE TIME.] 
 48.4      If it is commercially reasonable to render all of one 
 48.5   party's performance at one time, the performance is due at one 
 48.6   time, and the other party's reciprocal performance is due only 
 48.7   on tender of the entire performance. 
 48.8      Sec. 66.  [336.2B-604] [WHEN PAYMENT DUE.] 
 48.9      (a) If a party has the right to make or demand performance 
 48.10  in part or over a period of time, payment, if it can be 
 48.11  apportioned, may be demanded for each part performance. 
 48.12     (b) If payment cannot be apportioned or the agreement or 
 48.13  circumstances indicate that payment may not be demanded for part 
 48.14  performance, payment is due only on tender of completion of the 
 48.15  entire performance. 
 48.16               B.  Tender of Performance; Acceptance 
 48.17     Sec. 67.  [336.2B-605] [ACCEPTANCE; EFFECT.] 
 48.18     (a) A party shall pay or render other performance required 
 48.19  according to the contractual terms for any performance it 
 48.20  accepts. 
 48.21     (b) The burden is on the party that accepted the 
 48.22  performance to establish any breach of contract with respect to 
 48.23  the performance accepted. 
 48.24     Sec. 68.  [336.2B-606] [TENDER OF PERFORMANCE; RIGHT TO 
 48.25  ACCEPTANCE.] 
 48.26     (a) A tender of performance occurs when a party, with 
 48.27  manifest present ability to do so, offers to complete the 
 48.28  performance.  If a performance by the other party is due before 
 48.29  the tendered performance, the other party's performance is a 
 48.30  condition to the first party's duty to complete the tendered 
 48.31  performance. 
 48.32     (b) Tender of performance that substantially conforms to 
 48.33  the contract entitles the party to acceptance of that 
 48.34  performance.  However, in a mass-market license, if the 
 48.35  performance consists of the delivery of a copy that constitutes 
 48.36  the initial transfer of rights, the licensee may refuse the 
 49.1   performance if it does not conform to the contract. 
 49.2      (c) If performance is a transfer of rights, a licensor 
 49.3   shall tender first but need not complete the performance until 
 49.4   the licensee pays and tenders other performance required at that 
 49.5   time.  Tender must be at a reasonable hour and requires that the 
 49.6   licensor: 
 49.7      (1) notify the licensee that the information or copies of 
 49.8   the information are available or have been shipped; 
 49.9      (2) tender any documents, authorizations, addresses, access 
 49.10  codes, acknowledgments, or other materials necessary for the 
 49.11  licensee to obtain access to, control over, or possession of the 
 49.12  information; and 
 49.13     (3) hold the information, copies, and materials at the 
 49.14  licensee's disposal for a period reasonably necessary to enable 
 49.15  the licensee to obtain such access, control, or possession. 
 49.16     (d) Tender of payment is sufficient if made by any means or 
 49.17  in any manner acceptable in the ordinary course of business 
 49.18  unless the other party demands payment in money and gives any 
 49.19  extension of time reasonably necessary to procure it. 
 49.20     Sec. 69.  [336.2B-607] [LICENSEE'S RIGHT TO INSPECT; 
 49.21  PAYMENT BEFORE INSPECTION.] 
 49.22     (a) If performance requires delivery of a copy, the 
 49.23  following rules apply: 
 49.24     (1) Subject to paragraphs (3) and (4) and subsection (b), a 
 49.25  licensee has a right before payment or acceptance to inspect the 
 49.26  information and to obtain any related documentation at a 
 49.27  reasonable place and time and in a reasonable manner in order to 
 49.28  determine conformance to the agreement. 
 49.29     (2) Expenses of inspection must be borne by the licensee, 
 49.30  but reasonable expenses may be recovered from the licensor if 
 49.31  the performance is rightfully refused. 
 49.32     (3) A licensee's right to inspect is subject to the 
 49.33  confidentiality of the information.  If inspection would 
 49.34  disclose a trade secret or confidential information, jeopardize 
 49.35  confidentiality, or provide the licensee substantially with the 
 49.36  value of the information before payment, the licensee does not 
 50.1   have a right to inspect before payment. 
 50.2      (4) A place or method of inspection, or a standard for 
 50.3   inspection fixed by the parties, is presumed to be exclusive.  
 50.4   However, unless otherwise expressly agreed, the fixing of a 
 50.5   place or method of inspection does not postpone identification 
 50.6   or shift the place for delivery or for passing the risk of loss. 
 50.7   If compliance with the method becomes impossible, inspection 
 50.8   must be made as provided in this section unless the place, 
 50.9   method, or standard fixed by the parties was intended as an 
 50.10  indispensable condition, the failure of which avoids the 
 50.11  contract. 
 50.12     (b) If a right to inspect exists under subsection (a) and 
 50.13  the agreed procedures for payment or the terms of the contract 
 50.14  are inconsistent with an opportunity to inspect before making 
 50.15  payment, the licensee does not have a right to inspect before 
 50.16  payment.  Nonconformity in the tender does not excuse the 
 50.17  licensee from making payment unless: 
 50.18     (1) the nonconformity appears without inspection and would 
 50.19  justify refusal under section 336.2B-608; or 
 50.20     (2) despite tender of the required documents, the 
 50.21  circumstances would justify injunction against honor under this 
 50.22  act. 
 50.23     (c) Payment pursuant to subsection (b) is not an acceptance 
 50.24  of performance and does not impair a licensee's right to inspect 
 50.25  or preclude other remedies of the licensee. 
 50.26     Sec. 70.  [336.2B-608] [REFUSAL OF DEFECTIVE TENDER.] 
 50.27     (a) Subject to subsection (b) and section 336.2B-618, if a 
 50.28  tender of performance, or the tendering party's previous 
 50.29  performance, constitutes a material breach of contract, as to 
 50.30  the particular tendered performance, the party to which it is 
 50.31  tendered may: 
 50.32     (1) refuse the entire performance; 
 50.33     (2) accept the entire performance; or 
 50.34     (3) accept any commercially reasonable units and refuse the 
 50.35  rest. 
 50.36     (b) In a mass-market license, a licensee may refuse a 
 51.1   performance that consists of the delivery of a copy that 
 51.2   constitutes the initial transfer of rights if the performance 
 51.3   does not conform to the contract. 
 51.4      (c) Refusal is ineffective unless made within a reasonable 
 51.5   time after the tender and before acceptance and the party whose 
 51.6   performance is refused is notified within a reasonable time 
 51.7   after the breach was or should have been discovered. 
 51.8      Sec. 71.  [336.2B-609] [DUTIES FOLLOWING RIGHTFUL REFUSAL.] 
 51.9      (a) After refusal or revocation, any use or exercise of 
 51.10  rights by a licensee with respect to the information or copies 
 51.11  involved in the performance, or any action, the natural 
 51.12  consequence of which would be to reduce substantially the value 
 51.13  of the information to the licensor or convey a further 
 51.14  substantial benefit to the licensee, is wrongful as against the 
 51.15  licensor and constitutes a breach of contract. 
 51.16     (b) A licensee that takes possession of copies or 
 51.17  documentation or has made additional copies, shall return all 
 51.18  copies and documentation to the licensor or hold them with 
 51.19  reasonable care for disposal at the licensor's instructions for 
 51.20  a reasonable time.  In this case, the following additional rules 
 51.21  apply: 
 51.22     (1) If the licensee elects to hold the documentation or 
 51.23  copies for the licensor's disposal, the licensee shall follow 
 51.24  any reasonable instructions received from the licensor.  
 51.25  However, instructions are not reasonable if the licensor does 
 51.26  not arrange for payment of or reimbursement for the reasonable 
 51.27  expenses of complying with the instructions. 
 51.28     (2) If the licensor does not give instructions within a 
 51.29  reasonable time after being notified of refusal, the licensee 
 51.30  may store the documentation and copies for the licensor's 
 51.31  account or ship them to the licensor with a right of 
 51.32  reimbursement for reasonable costs of storage, shipment, and 
 51.33  handling. 
 51.34     (c) A licensee has no further obligations with regard to 
 51.35  information or related copies and documentation refused, but 
 51.36  both parties remain bound by any obligations of nondisclosure or 
 52.1   confidentiality and any limitations or restrictions on use which 
 52.2   would have been enforceable had the performance not been refused.
 52.3      (d) In complying with this section, a licensee is held only 
 52.4   to good faith and a standard of care that is reasonable in the 
 52.5   circumstances.  Conduct in good faith under this section does 
 52.6   not constitute acceptance or conversion and is not the basis for 
 52.7   an action for damages or equitable relief. 
 52.8      Sec. 72.  [336.2B-610] [WHAT CONSTITUTES ACCEPTANCE.] 
 52.9      (a) Subject to subsection (b), acceptance of a performance 
 52.10  occurs when the party receiving the performance: 
 52.11     (1) substantially obtains the value or access expected from 
 52.12  the performance and, without objecting, retains the value or 
 52.13  utilizes the access beyond a reasonable time to refuse the 
 52.14  performance; 
 52.15     (2) signifies or acts with respect to the information in a 
 52.16  manner that signifies to the other party that the performance 
 52.17  was conforming or that the party will take or retain the 
 52.18  performance in spite of the nonconformity; 
 52.19     (3) fails effectively to refuse performance under the terms 
 52.20  of the contract or section 336.2B-608; 
 52.21     (4) acts in a manner that makes compliance with the 
 52.22  licensee's duties on refusal impossible because of commingling; 
 52.23  or 
 52.24     (5) receives a substantial benefit or valuable knowledge 
 52.25  from the information, performance, or access and the benefit or 
 52.26  knowledge cannot be returned. 
 52.27     (b) Except in cases governed by subsection (a)(4) and (5), 
 52.28  if a right to inspect exists under section 336.2B-607 or the 
 52.29  agreement, acceptance of performance that involves delivery of a 
 52.30  copy occurs only when the party has a reasonable opportunity to 
 52.31  inspect the copy and any document. 
 52.32     (c) If an agreement requires performance in stages with 
 52.33  respect to portions of the information or with respect to its 
 52.34  capacity to perform, this section applies separately to each 
 52.35  stage.  Acceptance of any stage is conditional until completion 
 52.36  of the transfer of rights in the completed information or all 
 53.1   stages required under the agreement. 
 53.2      Sec. 73.  [336.2B-611] [REVOCATION OF ACCEPTANCE.] 
 53.3      (a) Subject to subsections (b) and (c), a licensee may 
 53.4   revoke acceptance of a commercial unit that is part of a 
 53.5   performance by the licensor if the nonconformity of the 
 53.6   commercial unit is a material breach of the contract and the 
 53.7   party accepted the performance: 
 53.8      (1) on the reasonable assumption that the breach would be 
 53.9   cured and it has not been seasonably cured; 
 53.10     (2) during a period of continuing efforts at adjustment and 
 53.11  cure and the breach has not been seasonably cured; or 
 53.12     (3) without discovery of the breach and the acceptance was 
 53.13  reasonably induced by the other party's assurances or by the 
 53.14  difficulty of discovery before acceptance. 
 53.15     (b) Revocation is not effective until the revoking party 
 53.16  sends notice of it to the other party and is barred if: 
 53.17     (1) the revocation does not occur within a reasonable time 
 53.18  after the licensee discovers or should have discovered the 
 53.19  ground for it; 
 53.20     (2) the revocation does not occur before any substantial 
 53.21  change in condition or identifiability of the information not 
 53.22  caused by the breach; or 
 53.23     (3) the party attempting to revoke acceptance received a 
 53.24  substantial benefit to it or knowledge of valuable informational 
 53.25  content from the performance or access and the benefit or 
 53.26  knowledge cannot be returned. 
 53.27     (c) A party that justifiably revokes acceptance: 
 53.28     (1) has the same duties and is under the same restrictions 
 53.29  with regard to the information and any documentation or copies 
 53.30  as if the party had refused the performance; and 
 53.31     (2) is not obligated to pay the contract price for the 
 53.32  performance as to which revocation occurred. 
 53.33                   C.  Special Types of Contracts 
 53.34     Sec. 74.  [336.2B-612] [ACCESS CONTRACT.] 
 53.35     (a) Information obtained by a licensee in an access 
 53.36  contract is free of any restriction by the licensor except 
 54.1   express contractual restrictions and restrictions resulting from 
 54.2   the intellectual property rights of a licensor or other 
 54.3   applicable law.  The licensee may make and retain a copy of the 
 54.4   information and a backup copy for protection against loss. 
 54.5      (b) In a continuous access contract, access must be 
 54.6   available at times and in a manner consistent with: 
 54.7      (1) express terms of the agreement; and 
 54.8      (2) to the extent not dealt with by the terms of the 
 54.9   agreement, in a manner and with a quality that is reasonable 
 54.10  consistent with ordinary standards of the trade for the 
 54.11  particular type of agreement. 
 54.12     (c) In a continuous access contract, intermittent and 
 54.13  occasional failures to have access available do not constitute a 
 54.14  breach of contract if they are consistent with: 
 54.15     (1) standards of the trade or industry for the particular 
 54.16  type of agreement; 
 54.17     (2) the express terms of the agreement; or 
 54.18     (3) reasonable needs for maintenance, scheduled downtime, 
 54.19  reasonable periods of equipment, software or communications 
 54.20  failure, or events reasonably beyond the licensor's control. 
 54.21     Sec. 75.  [336.2B-613] [CORRECTION AND UPDATE CONTRACTS.] 
 54.22     (a) If a party agrees to correct errors or provide similar 
 54.23  services, the following rules apply: 
 54.24     (1) If the services cover a limited time and are part of a 
 54.25  limited remedy in a contract between the parties, the party 
 54.26  undertakes that its performance will provide the licensee with 
 54.27  information of a quality that conforms to that contract. 
 54.28     (2) In cases not covered by paragraph (1), the party shall 
 54.29  perform at a time and place and with a quality consistent with 
 54.30  the express terms of the agreement and, to the extent not dealt 
 54.31  with by the terms of the agreement, in a manner and with a 
 54.32  quality that is reasonably consistent with ordinary standards of 
 54.33  the trade. 
 54.34     (3) In cases governed by paragraph (2), the party providing 
 54.35  the services does not guarantee that its services will correct 
 54.36  all defects or errors unless expressly so provided by the 
 55.1   agreement. 
 55.2      (b) An agreement to provide updates or new versions 
 55.3   requires that the licensor provide only such updates or new 
 55.4   versions that are developed by the licensor from time to time 
 55.5   unless the terms of the agreement expressly provide that the 
 55.6   licensor will develop and provide new versions or updates in a 
 55.7   timely manner.  If a licensor must provide only updates or new 
 55.8   versions of information that are developed from time to time, 
 55.9   the following rules apply: 
 55.10     (1) The licensor is not required to provide new versions or 
 55.11  upgrades that it has not made available to the public or 
 55.12  relevant customer base and need not make new versions or 
 55.13  upgrades available to the public or the customer base. 
 55.14     (2) The licensor shall make the new versions or upgrades 
 55.15  available in a manner and with a quality consistent with the 
 55.16  terms of the agreement and, to the extent not dealt with by the 
 55.17  agreement, in a manner and a quality that is reasonably 
 55.18  consistent with ordinary standards of the trade for the 
 55.19  particular type of agreement. 
 55.20     (3) New versions or upgrades must conform to the same 
 55.21  standards of quality applicable to the information involved in 
 55.22  the initial performance unless the licensor indicates that 
 55.23  compliance is not intended and the licensee accepts performance 
 55.24  knowing of the lesser quality. 
 55.25     (c) Breach of a contract to correct or update information 
 55.26  does not entitle the licensee to cancel an underlying contract 
 55.27  concerning the information unless the breach is a material 
 55.28  breach of the underlying contract. 
 55.29     Sec. 76.  [336.2B-614] [SUPPORT CONTRACTS.] 
 55.30     (a) A licensor is not required to provide support or 
 55.31  instruction for the licensee's use of information or licensed 
 55.32  access after completion of the transfer of rights. 
 55.33     (b) If a person agrees to provide support to the licensee, 
 55.34  the person shall make the support available in a manner and with 
 55.35  a quality consistent with the terms of the agreement and, to the 
 55.36  extent not dealt with by the agreement, in a manner and with a 
 56.1   quality that is reasonably consistent with ordinary standards of 
 56.2   the trade or industry for the particular type of agreement. 
 56.3      (c) A licensor's breach of a support agreement does not 
 56.4   entitle the licensee to cancel the underlying contract 
 56.5   concerning the information unless the breach is also a material 
 56.6   breach of the underlying contract. 
 56.7      Sec. 77.  [336.2B-615] [PUBLISHERS, DISTRIBUTORS, AND 
 56.8   RETAILERS.] 
 56.9      (a) In a contract between a retailer and an end user, if 
 56.10  the parties understand that the end user's right to use the 
 56.11  information is to be subject to a license from the publisher, 
 56.12  the following rules apply: 
 56.13     (1) The contract between the end user and the retailer is 
 56.14  conditional on the end user's assent to the publisher's license. 
 56.15     (2) If the end user refuses the terms of the license with 
 56.16  the publisher, the end user may return the information to the 
 56.17  retailer and receive from it a refund of any license fee already 
 56.18  paid in an amount consistent with section 336.2B-113(b) and 
 56.19  avoid any obligation for performance of future payments to the 
 56.20  retailer regarding the information.  Refund by the retailer 
 56.21  under this paragraph also constitutes a refund under section 
 56.22  336.2B-113. 
 56.23     (3) The retailer is not bound by the terms of, and does not 
 56.24  receive the benefits of an agreement between the publisher and 
 56.25  the end user unless the retailer and end user adopt those terms 
 56.26  as part of their agreement. 
 56.27     (b) An authorized retailer that in good faith compliance 
 56.28  with its contract with the publisher performs warranty or remedy 
 56.29  obligations of a producer under a publisher's license with the 
 56.30  end user is entitled to reimbursement from the publisher for the 
 56.31  reasonable costs of the performance. 
 56.32     (c) A retailer that makes a refund in good faith pursuant 
 56.33  to section 336.2B-113 to its end user because the end user 
 56.34  refused the publisher's license is entitled to reimbursement 
 56.35  from the authorized party from whom it obtained the copy of the 
 56.36  amount paid for the copy paid by the retailer on return of the 
 57.1   copy and documentation to that person. 
 57.2      (d) A publisher that makes a refund in good faith pursuant 
 57.3   to section 336.2B-113 to the end user is entitled to 
 57.4   reimbursement from the retailer of the difference between the 
 57.5   amount refunded and the price paid by the retailer to the 
 57.6   publisher for the refunded product. 
 57.7      (e) If an agreement contemplates distribution of tangible 
 57.8   copies of information in the ordinary course, a retailer or 
 57.9   other distributor shall distribute such copies and documentation 
 57.10  as received from the publisher and subject to any contractual 
 57.11  terms provided for end users. 
 57.12     (f) A retailer who enters an agreement with an end user is 
 57.13  a licensor in its transaction with an end user for all purposes 
 57.14  under this article. 
 57.15     (g) For purposes of this section, the following rules apply:
 57.16     (1) A retailer is a merchant licensee that receives 
 57.17  information from a licensor for sale or license to end users. 
 57.18     (2) A publisher is a licensor that is not a retailer, but 
 57.19  that enters into an agreement with an end user with respect to 
 57.20  the information. 
 57.21     (3) An end user is a licensee that acquires the information 
 57.22  for its own use and not to distribute to third parties by sale, 
 57.23  license, or other means. 
 57.24     Sec. 78.  [336.2B-616] [DEVELOPMENT CONTRACT.] 
 57.25     If an agreement requires the development of a computer 
 57.26  program, the following rules apply. 
 57.27     (1) Unless an authenticated record provides for different 
 57.28  treatment of intellectual property rights: 
 57.29     (A) the licensor retains ownership of the intellectual 
 57.30  property rights in the program; and 
 57.31     (B) the licensee receives a nonexclusive and irrevocable 
 57.32  license to use the program in any manner consistent with the 
 57.33  uses for which the development was undertaken. 
 57.34     (2) On request of the licensee, the licensor shall notify 
 57.35  the licensee if the licensor used independent contractors or 
 57.36  information provided by other third persons to which 
 58.1   intellectual property rights may apply and shall provide the 
 58.2   licensee with a statement that either confirms that all 
 58.3   applicable intellectual property rights have been obtained or 
 58.4   will be obtained from any independent contractor so used, or 
 58.5   that it makes no representation about those rights beyond any 
 58.6   stated in the agreement.  The response must be made within 30 
 58.7   days after the request is received.  If the time for performance 
 58.8   is less than 30 days, the request must be made at or before the 
 58.9   time of contracting, and the response must be made before the 
 58.10  transfer of rights.  
 58.11     (3) If the agreement provides that ownership of the 
 58.12  intellectual property rights in the completed program will pass 
 58.13  to the licensee: 
 58.14     (A) Title passes in accordance with section 336.2B-501 with 
 58.15  respect to all components code in the program developed pursuant 
 58.16  to the contract. 
 58.17     (B) The licensee receives the program free of any 
 58.18  restrictions on use on the part of the licensor.  Its rights in 
 58.19  the program may not be canceled by the licensor after payment of 
 58.20  the contract price. 
 58.21     (C) If the agreement provides that the licensor retains 
 58.22  ownership of the intellectual property rights in any components 
 58.23  or code used in the program that were developed prior to or 
 58.24  independent of performance of the contract, the licensee has an 
 58.25  irrevocable license to use or modify such components or code in 
 58.26  any manner in connection with its use of the program or any 
 58.27  modifications thereof. 
 58.28     (D) The licensor has an irrevocable nonexclusive right to 
 58.29  use in other contracts components or code developed by it in 
 58.30  performance of the contract if such components or code are not 
 58.31  specific to the project and if the use will not lessen the value 
 58.32  of the program for the licensee or disclose confidential 
 58.33  information of the licensee. 
 58.34     Sec. 79.  [336.2B-617] [SYSTEM-INTEGRATION CONTRACT.] 
 58.35     (a) If an agreement requires a party to provide a single or 
 58.36  integrated system consisting of components and the licensee 
 59.1   relies on the licensor to select the components, the components 
 59.2   selected must function together as a system substantially as 
 59.3   described in the agreement. 
 59.4      (b) If the agreement requires that portions of the system 
 59.5   be delivered or installed before completion of the whole, 
 59.6   acceptance by a licensee of any portion is conditional on 
 59.7   completion of the system. 
 59.8                    D.  Performance Problems; Cure 
 59.9      Sec. 80.  [336.2B-618] [CURE.] 
 59.10     (a) A party in breach of a contract, at its own expense, 
 59.11  may cure the breach if the party in breach: 
 59.12     (1) without undue delay notifies the other party of its 
 59.13  intent to cure; and 
 59.14     (2) effects cure promptly and before cancellation or 
 59.15  refusal by the other party. 
 59.16     (b) If a licensor, other than in a mass-market license, 
 59.17  receives timely notice of a specified nonconformity and demand 
 59.18  from a licensee that accepted a performance as required because 
 59.19  a nonconformity was not material, the licensor promptly and in 
 59.20  good faith shall make an effort to cure unless the cost of the 
 59.21  effort would be disproportionate to the adverse effect of the 
 59.22  nonconformity on the licensee. 
 59.23     (c) A breach of contract that has been cured may not be 
 59.24  used to cancel a contract, but mere notice of intent to cure 
 59.25  does not preclude cancellation or refusal. 
 59.26     Sec. 81.  [336.2B-619] [WAIVER.] 
 59.27     (a) Any claim or right arising out of an alleged breach of 
 59.28  contract may be discharged in whole or in part without 
 59.29  consideration by a waiver contained in a record authenticated by 
 59.30  the party making the waiver. 
 59.31     (b) A party that accepts a performance, knowing or with 
 59.32  reason to know that the performance constitutes a breach of 
 59.33  contract: 
 59.34     (1) waives its right to revoke acceptance or cancel because 
 59.35  of the breach, unless the acceptance was on the reasonable 
 59.36  assumption that the breach would be seasonably cured, but 
 60.1   acceptance does not in itself preclude any other remedy provided 
 60.2   by this article; and 
 60.3      (2) waives any remedy for the breach if the party fails 
 60.4   within a reasonable time to object to the breach. 
 60.5      (c) A party that refuses a performance and fails to state 
 60.6   in connection with its refusal a particular defect that is 
 60.7   ascertainable by reasonable inspection waives the right to rely 
 60.8   on the unstated defect to justify refusal or to establish breach 
 60.9   only if: 
 60.10     (1) the other party could have cured the defect if stated 
 60.11  seasonably; or 
 60.12     (2) between merchants, the other party after refusal of a 
 60.13  performance has made a request in a record for a full and final 
 60.14  statement in a record of all defects on which the refusing party 
 60.15  proposes to rely. 
 60.16     (d) A waiver may not be revoked as to the performance to 
 60.17  which the waiver applies.  However, waiver of breach in one 
 60.18  performance does not waive the same or similar breach in future 
 60.19  performances of like kind unless the party making the waiver 
 60.20  expressly so states.  Other than a waiver pursuant to subsection 
 60.21  (a) and a waiver supported by consideration, a waiver affecting 
 60.22  an executory portion of a contract may be retracted by 
 60.23  seasonable notice received by the other party that strict 
 60.24  performance is required in the future of any term waived unless 
 60.25  the retraction would be unjust in view of a material change of 
 60.26  position in reliance on the waiver by the other party. 
 60.27     Sec. 82.  [336.2B-620] [RIGHT TO ADEQUATE ASSURANCE OF 
 60.28  PERFORMANCE.] 
 60.29     (a) A contract imposes on a party an obligation not to 
 60.30  impair another party's expectation of receiving due performance. 
 60.31  If reasonable grounds for insecurity arise with respect to the 
 60.32  performance of either party, the other may demand in a record 
 60.33  adequate assurance of due performance and, until that assurance 
 60.34  is received, if commercially reasonable, may suspend any 
 60.35  performance for which the agreed return performance has not 
 60.36  already been received. 
 61.1      (b) The reasonableness of grounds for insecurity and the 
 61.2   adequacy of the assurance offered is determined according to 
 61.3   commercial standards. 
 61.4      (c) Acceptance of improper delivery or payment does not 
 61.5   prejudice an aggrieved party's right to demand adequate 
 61.6   assurance of future performance. 
 61.7      (d) After receipt of a justified demand, failure to provide 
 61.8   within a reasonable time, not exceeding 30 days, assurance of 
 61.9   due performance that is adequate under the circumstances of the 
 61.10  particular case is a repudiation of the contract. 
 61.11     Sec. 83.  [336.2B-621] [ANTICIPATORY REPUDIATION.] 
 61.12     (a) If either party to a contract repudiates a performance 
 61.13  not yet due and the loss of performance will substantially 
 61.14  impair the value of the contract to the other, the aggrieved 
 61.15  party may: 
 61.16     (1) await performance by the repudiating party for a 
 61.17  commercially reasonable time or pursue any remedy for breach of 
 61.18  contract, even if it has urged the repudiating party to retract 
 61.19  the repudiation or has notified the repudiating party that it 
 61.20  would await the agreed performance; and 
 61.21     (2) in either case, suspend its own performance or proceed 
 61.22  under section 336.2B-710. 
 61.23     (b) Repudiation includes, but is not limited to, language 
 61.24  that one party will not or cannot make a performance still due 
 61.25  under the contract or voluntary affirmative conduct that reason 
 61.26  appears to the other party to make a future performance 
 61.27  impossible. 
 61.28     Sec. 84.  [336.2B-622] [RETRACTION OF ANTICIPATORY 
 61.29  REPUDIATION.] 
 61.30     (a) A repudiating party may retract a repudiation until its 
 61.31  next performance is due unless an aggrieved party, after the 
 61.32  repudiation, has canceled the contract, materially changed its 
 61.33  position, or otherwise indicated that the repudiation is 
 61.34  considered to be final. 
 61.35     (b) A retraction under subsection (a) may be by any method 
 61.36  that clearly indicates to the aggrieved party that the 
 62.1   repudiating party intends to perform the contract.  However, a 
 62.2   retraction must contain any assurance justifiably demanded under 
 62.3   section 336.2B-620. 
 62.4      (c) Retraction under subsection (a) reinstates a 
 62.5   repudiating party's rights under the contract with due excuse 
 62.6   and allowance to an aggrieved party for any delay caused by the 
 62.7   repudiation. 
 62.8                      E.  Loss and Impossibility 
 62.9      Sec. 85.  [336.2B-623] [RISK OF LOSS.] 
 62.10     (a) Except as otherwise provided in this section, the risk 
 62.11  of loss as to a copy of information passes to the licensee on 
 62.12  receipt of the copy.  If the contract does not contemplate that 
 62.13  a licensee take possession of a copy, risk of loss passes to the 
 62.14  licensee when it obtains control of the copy. 
 62.15     (b) If a contract requires or authorizes a licensor to send 
 62.16  a copy by carrier, the following rules apply: 
 62.17     (1) If the contract does not require delivery at a 
 62.18  particular destination, the risk of loss passes to the licensee 
 62.19  when the copy is delivered to the carrier, even if the shipment 
 62.20  is under reservation. 
 62.21     (2) If the contract requires delivery at a particular 
 62.22  destination and the copy arrives there in the possession of the 
 62.23  carrier, the risk of loss passes to the licensee when the copy 
 62.24  is tendered in a manner that enables the licensee to take 
 62.25  delivery. 
 62.26     (3) If a tender of delivery of a copy or a shipping 
 62.27  document fails to conform to the contract, the risk of loss 
 62.28  remains on the licensor until cure or acceptance. 
 62.29     (c) If a copy is held by a third party to be delivered 
 62.30  without being moved, the risk of loss passes to the licensee: 
 62.31     (1) upon the licensee's receipt of a negotiable document of 
 62.32  title covering the copy; 
 62.33     (2) upon acknowledgment by the third party to the licensee 
 62.34  of the licensee's right to possession of the copy; or 
 62.35     (3) after the licensee's receipt of a nonnegotiable 
 62.36  document of title or record directing delivery. 
 63.1      Sec. 86.  [336.2B-624] [CASUALTY TO IDENTIFIED PROPERTY.] 
 63.2      If the parties to a contract assume the continued existence 
 63.3   of information or a copy identified at the time of contracting 
 63.4   or to be developed during the contract and the information or 
 63.5   copy is destroyed and there is no backup, and those events occur 
 63.6   without the fault of either party before the risk of loss passes 
 63.7   from the party originally in control of the information, the 
 63.8   following rules apply: 
 63.9      (1) The party in control of the information shall 
 63.10  seasonably notify the other party of the nature and extent of 
 63.11  the loss. 
 63.12     (2) If the loss is total, the contract is avoided. 
 63.13     (3) If the loss is partial or the copy or the information 
 63.14  no longer conforms to the contract, the other party may 
 63.15  nevertheless demand inspection and may either treat the contract 
 63.16  as avoided or accept the information with due allowance from the 
 63.17  agreed price for the nonconformity but without further right 
 63.18  against the other party. 
 63.19     Sec. 87.  [336.2B-625] [INVALIDITY OF INTELLECTUAL 
 63.20  PROPERTY.] 
 63.21     If the parties to a contract assume the existence of 
 63.22  intellectual property rights that are declared invalid in a 
 63.23  final judgment by a court of competent jurisdiction, the 
 63.24  following rules apply: 
 63.25     (1) The party in control of the intellectual property 
 63.26  rights shall promptly notify the other party of the final 
 63.27  judgment. 
 63.28     (2) The other party may continue performance with due 
 63.29  allowance from the license fee for the invalidated intellectual 
 63.30  property rights or may treat the contract as avoided if the 
 63.31  rights declared invalid were material to the entire contract. 
 63.32     Sec. 88.  [336.2B-626] [EXCUSE BY FAILURE OF PRESUPPOSED 
 63.33  CONDITIONS.] 
 63.34     (a) Delay in performance or nonperformance by a party is 
 63.35  not a breach of contract if performance as agreed has been made 
 63.36  impracticable by: 
 64.1      (1) the occurrence of a contingency the nonoccurrence of 
 64.2   which was a basic assumption on which the contract was made; or 
 64.3      (2) compliance in good faith with any applicable foreign or 
 64.4   domestic governmental regulation, statute, or order, whether or 
 64.5   not it later proves to be invalid, if the parties assumed that 
 64.6   the delay would not occur. 
 64.7      (b) A party claiming excuse under subsection (a) shall 
 64.8   seasonably notify the other party that there will be delay or 
 64.9   nonperformance.  If the claimed excuse affects only a part of 
 64.10  the party's capacity to perform, the party claiming excuse shall 
 64.11  also allocate performance among its customers in a manner that 
 64.12  is fair and reasonable and notify the other party of the 
 64.13  estimated quota made available.  However, the party may include 
 64.14  regular customers not then under contract as well as its own 
 64.15  requirements for further manufacture. 
 64.16     (c) A party that receives notice in a record of a material 
 64.17  or indefinite delay, or of an allocation which would be a 
 64.18  material breach of the whole contract, may: 
 64.19     (1) terminate and thereby discharge any unexecuted portion 
 64.20  of the contract; or 
 64.21     (2) modify the contract by agreeing to take the available 
 64.22  allocation in substitution.  
 64.23     (d) If, after receipt of notification under subsection (b), 
 64.24  a party fails to terminate or modify the contract within a 
 64.25  reasonable time not exceeding 30 days, the contract lapses with 
 64.26  respect to any performance affected. 
 64.27     (e) The procedures in subsections (c) and (d) may be varied 
 64.28  by agreement only to the extent that the parties have assumed a 
 64.29  different obligation under subsection (a). 
 64.30                          F.  Termination 
 64.31     Sec. 89.  [336.2B-627] [SURVIVAL OF OBLIGATION AFTER 
 64.32  TERMINATION.] 
 64.33     (a) Except as otherwise provided in subsection (b), on 
 64.34  termination of the contract, all obligations that are still 
 64.35  executory on both sides are discharged. 
 64.36     (b) The following survive termination of the contract: 
 65.1      (1) a right or remedy based on breach of contract or 
 65.2   performance; 
 65.3      (2) a limitation on the use, scope, manner, method, or 
 65.4   location of the exercise of rights in the information; 
 65.5      (3) an obligation of confidentiality, nondisclosure, or 
 65.6   noncompetition; 
 65.7      (4) an obligation to return or dispose of information, 
 65.8   materials, documentation, copies, records, or the like to the 
 65.9   other party, which obligation must be promptly performed; 
 65.10     (5) a choice of law or forum; 
 65.11     (6) an obligation to arbitrate or otherwise resolve 
 65.12  contractual disputes through means of alternative dispute 
 65.13  resolution procedures; 
 65.14     (7) a term limiting the time for commencing an action or 
 65.15  for providing notice; 
 65.16     (8) an indemnity provision; and 
 65.17     (9) any right, remedy, or obligation stated in the 
 65.18  agreement as surviving. 
 65.19     Sec. 90.  [336.2B-628] [NOTICE OF TERMINATION.] 
 65.20     (a) Subject to subsection (b), a party may not terminate a 
 65.21  contract, except on the happening of an agreed event, such as 
 65.22  the expiration of the stated term, unless the party gives 
 65.23  reasonable notice of termination to the other party. 
 65.24     (b) Access to a facility under an access contract not 
 65.25  involving information that the licensee provided to the licensor 
 65.26  may be terminated without notice. 
 65.27     (c) In cases not governed by subsection (b), a contractual 
 65.28  term dispensing with notice required under this section is 
 65.29  invalid if its operation would be unconscionable, but a contract 
 65.30  term specifying standards for the nature and timing of notice is 
 65.31  enforceable if the standards are not manifestly unreasonable. 
 65.32     Sec. 91.  [336.2B-629] [TERMINATION; ENFORCEMENT AND 
 65.33  ELECTRONICS.] 
 65.34     (a) On termination of a license, a party in possession or 
 65.35  control of information, materials, or copies it does not own, 
 65.36  but which are the property of the other party or subject to a 
 66.1   possessory interest of the other party, shall return all 
 66.2   materials and copies or hold them for disposal on instructions 
 66.3   of the other party.  If the information, materials, or copies 
 66.4   were subject to restrictions on use or disclosure, the party in 
 66.5   possession or control following termination shall cease 
 66.6   continued exercise of the terminated rights.  Continued exercise 
 66.7   of the terminated rights or other use is a breach of contract 
 66.8   and wrongful as against the other party unless pursuant to a 
 66.9   contractual term that survives cancellation or which was 
 66.10  designated in the contract as irrevocable.  If information, 
 66.11  materials, or copies are jointly owned, the party in possession 
 66.12  or control shall make the materials or copies thereof available 
 66.13  to the other joint owner. 
 66.14     (b) Each party is entitled to enforce by judicial process 
 66.15  its rights under subsection (a).  To the extent necessary to 
 66.16  enforce those rights, a court may order the party or an officer 
 66.17  of the court to: 
 66.18     (1) take possession of copies or any other materials to be 
 66.19  returned under subsection (a); 
 66.20     (2) render unusable or eliminate the capability to exercise 
 66.21  rights in the licensed information and any other materials to be 
 66.22  returned under subsection (a) without removal; 
 66.23     (3) destroy or prevent access to any record, data, or files 
 66.24  containing the licensed information and any other materials to 
 66.25  be returned under subsection (a) under the control or in the 
 66.26  possession of the other party; and 
 66.27     (4) require that the party in possession or control of the 
 66.28  licensed information and any other materials to be returned 
 66.29  under subsection (a) assemble and make them available to the 
 66.30  other party at a place designated by that other party or destroy 
 66.31  records containing the materials. 
 66.32     (c) In an appropriate case, the court may grant injunctive 
 66.33  relief to enforce the rights under this section. 
 66.34     (d) A party may utilize electronic means to enforce 
 66.35  termination without judicial process pursuant to section 
 66.36  336.2B-320.  If termination is for reasons other than expiration 
 67.1   of the license term, the party terminating the contract by 
 67.2   electronic means shall notify the other party before using the 
 67.3   electronic means. 
 67.4                                Part 7
 67.5                               REMEDIES
 67.6                            A.  In General
 67.7      Sec. 92.  [336.2B-701] [REMEDIES IN GENERAL.] 
 67.8      (a) The remedies provided in this article must be liberally 
 67.9   administered with the purpose of placing the aggrieved party in 
 67.10  as good a position as if the other party had fully performed. 
 67.11     (b) Except as otherwise provided in this article, an 
 67.12  aggrieved party may not recover compensation for that part of a 
 67.13  loss that could have been avoided by taking measures reasonable 
 67.14  under the circumstances to avoid or reduce loss, including the 
 67.15  maintenance before breach of reasonable systems for backup or 
 67.16  retrieval of lost information.  The burden of establishing a 
 67.17  failure to take reasonable measures under the circumstances is 
 67.18  on the party in breach. 
 67.19     (c) Rights and remedies provided in this article are 
 67.20  cumulative, but a party may not recover more than once for the 
 67.21  same injury. 
 67.22     (d) Except as otherwise provided in a term liquidating 
 67.23  damages for breach of contract, a court may deny or limit a 
 67.24  remedy if, under the circumstances, it would put the aggrieved 
 67.25  party in a substantially better position than if the other party 
 67.26  had fully performed.  If a remedy cannot reasonably be applied 
 67.27  to a particular performance, the remedy is not available. 
 67.28     (e) In a case involving published informational content or 
 67.29  a nonmaterial breach that does not cause personal injury, 
 67.30  neither party is entitled to consequential damages unless the 
 67.31  agreement expressly so provides. 
 67.32     (f) If a party breaches a contract and the breach is 
 67.33  material as to the entire contract, the other party may exercise 
 67.34  or pursue all remedies available under this article or the 
 67.35  agreement, subject to the conditions and limitations applicable 
 67.36  to the remedy, including remedies available for nonmaterial 
 68.1   breach.  If a breach is material only as to a particular 
 68.2   performance, the remedies may be exercised only as to that 
 68.3   performance. 
 68.4      (g) If a party is in breach of contract, the party seeking 
 68.5   enforcement has the rights and remedies provided in this article 
 68.6   and the agreement and may enforce the rights and remedies 
 68.7   available to it under other law. 
 68.8      Sec. 93.  [336.2B-702] [DAMAGES FOR NONMATERIAL BREACH OF 
 68.9   CONTRACT.] 
 68.10     If a party breaches a contract and the breach is not 
 68.11  material or, in a material breach, if the aggrieved party so 
 68.12  elects, the aggrieved party may: 
 68.13     (1) recover any unpaid license fees and royalties for 
 68.14  performance accepted; 
 68.15     (2) recover general damages measured as compensation for 
 68.16  the loss resulting in the ordinary course from the breach as 
 68.17  determined in any reasonable manner, together with incidental 
 68.18  and consequential damages less expenses avoided as a result of 
 68.19  the breach; and 
 68.20     (3) exercise any rights or remedies provided in the 
 68.21  contract. 
 68.22     Sec. 94.  [336.2B-703] [LOSS OF CONFIDENTIAL INFORMATION.] 
 68.23     An aggrieved party that has a right or interest in 
 68.24  confidential or trade secret information may recover as 
 68.25  consequential damages an amount as measured in any reasonable 
 68.26  manner that compensates it for any loss of, or damage to, the 
 68.27  party's interest or right in that information caused by a breach 
 68.28  of contract involving disclosure of the information. 
 68.29     Sec. 95.  [336.2B-704] [CANCELLATION; EFFECT.] 
 68.30     (a) A party may cancel a contract if the other party's 
 68.31  conduct constitutes a material breach which has not been cured 
 68.32  or if the contract so provides. 
 68.33     (b) Cancellation is not effective until the canceling party 
 68.34  notifies the other party of cancellation. 
 68.35     (c) On cancellation, a party in possession or control of 
 68.36  information, materials, or copies shall comply with section 
 69.1   336.2B-629(a). 
 69.2      (d) On cancellation, all obligations that are executory at 
 69.3   the time of cancellation are discharged.  However, the rights, 
 69.4   duties, and remedies described in section 336.2B-627(b) survive 
 69.5   cancellation. 
 69.6      (e) A contractual term providing that a licensee's rights 
 69.7   may not be canceled is enforceable and precludes cancellation as 
 69.8   to those rights.  However, a party whose right to cancel is 
 69.9   limited retains all other rights and remedies under this article 
 69.10  or the contract. 
 69.11     (f) Unless a contrary intention clearly appears, language 
 69.12  of cancellation, rescission, or avoidance or similar language is 
 69.13  not a renunciation or discharge of any claim in damages for an 
 69.14  antecedent breach. 
 69.15     Sec. 96.  [336.2B-705] [SPECIFIC PERFORMANCE.] 
 69.16     (a) A court may enter a decree of specific performance of 
 69.17  any obligation, other than the obligation to pay a fee for 
 69.18  information or services already received, if: 
 69.19     (1) the agreement expressly provides for that remedy and 
 69.20  specific performance is possible; or 
 69.21     (2) the contract was not for personal services, but the 
 69.22  agreed performance is unique and monetary compensation would be 
 69.23  inadequate. 
 69.24     (b) A decree for specific performance may contain any terms 
 69.25  and conditions the court considers just, but must provide 
 69.26  adequate safeguards consistent with the terms of the contract to 
 69.27  protect the confidential information and intellectual property 
 69.28  of the party ordered to perform. 
 69.29     (c) An aggrieved party has a right to recover information 
 69.30  that was to be transferred to and thereafter owned by it, if the 
 69.31  information exists in a form capable of being transferred and, 
 69.32  after reasonable efforts, the aggrieved party is unable to 
 69.33  effect cover or the circumstances indicate that an effort to 
 69.34  obtain cover would be unavailing. 
 69.35     Sec. 97.  [336.2B-706] [CONTRACTUAL MODIFICATION OF 
 69.36  REMEDY.] 
 70.1      (a) An agreement may add to, limit, or provide a substitute 
 70.2   for the measure of damages recoverable for breach of contract, 
 70.3   or limit a party's other remedies such as by precluding the 
 70.4   licensor's right to cancel or limiting the remedies to return of 
 70.5   all copies of the information and refund of the license fee, or 
 70.6   repair and replacement of copies of the information by the 
 70.7   licensor. 
 70.8      (b) Resort to a modified or limited remedy is optional, but 
 70.9   a remedy expressly described as exclusive precludes resort to 
 70.10  other remedies.  However, if the agreed remedy requires 
 70.11  performance by the party that breached the contract and the 
 70.12  performance of that party in providing the agreed remedy fails 
 70.13  to give the other party the remedy, the aggrieved party is 
 70.14  entitled to specific enforcement of the agreed remedy, or to the 
 70.15  extent that the agreed remedy failed, subject to subsection (c), 
 70.16  to other remedies under this article. 
 70.17     (c) Failure or unconscionability of an agreed remedy does 
 70.18  not affect the enforceability of separate terms relating to 
 70.19  consequential or incidental damages unless the separate terms 
 70.20  are expressly made subject to the performance of the agreed 
 70.21  remedy. 
 70.22     (d) Consequential damages and incidental damages may be 
 70.23  excluded or limited by agreement, unless the exclusion or 
 70.24  limitation is unconscionable.  A term enforceable under this 
 70.25  section is not subject to invalidation under section 
 70.26  336.2B-308(b). 
 70.27     Sec. 98.  [336.2B-707] [LIQUIDATION OF DAMAGES; DEPOSITS.] 
 70.28     (a) Damages for breach of contract by either party may be 
 70.29  liquidated in an amount that is reasonable in the light of 
 70.30  either the actual loss or the then anticipated loss caused by 
 70.31  the breach and the difficulties of proof of loss in the event of 
 70.32  breach.  If a term liquidating damages is unenforceable, the 
 70.33  aggrieved party has the remedies provided in this article or the 
 70.34  agreement. 
 70.35     (b) A party in breach is entitled to restitution of the 
 70.36  amount by which the payments it made for which performance was 
 71.1   received exceeds the amount to which the other party is entitled 
 71.2   under terms liquidating damages in accordance with subsection 
 71.3   (a). 
 71.4      (c) A party's right under subsection (b) is subject to 
 71.5   offset to the extent that the other party establishes a right to 
 71.6   recover damages under this article other than under the terms 
 71.7   liquidating damages in accordance with subsection (a). 
 71.8      Sec. 99.  [336.2B-708] [STATUTE OF LIMITATIONS.] 
 71.9      (a) An action for breach of contract under this article 
 71.10  must be commenced within the later of four years after the right 
 71.11  of action accrues or one year after the breach was or should 
 71.12  have been discovered, but no longer than five years after the 
 71.13  right of action accrued.  By agreement, the parties may reduce 
 71.14  the period of limitations to not less than one year after the 
 71.15  right of action accrues and may extend it to a term of not 
 71.16  longer than ten years and the period may not be extended. 
 71.17     (b) A right of action accrues when the act or omission 
 71.18  constituting the breach occurs or should have occurred, even if 
 71.19  the aggrieved party did not know of the breach.  Breach of 
 71.20  warranty occurs when the transfer of rights occurs, except that 
 71.21  if a warranty extends to future conduct, breach of warranty 
 71.22  occurs when the conduct occurs, but no later than the date the 
 71.23  warranty expires. 
 71.24     (c) A right of action for breach of the warranty of 
 71.25  noninfringement or for a breach of contract involving disclosure 
 71.26  of confidential information accrues when the act or omission 
 71.27  constituting the breach is or should have been discovered by the 
 71.28  aggrieved party. 
 71.29     (d) This section does not apply to a right of action that 
 71.30  accrued before the effective date of this article. 
 71.31                      B.  Licensor's Remedies 
 71.32     Sec. 100.  [336.2B-709] [LICENSOR'S DAMAGES FOR BREACH OF 
 71.33  CONTRACT.] 
 71.34     (a) Subject to subsection (c), for a material breach of 
 71.35  contract by a licensee, the licensor may recover as damages 
 71.36  compensation for the particular breach or, if appropriate, as to 
 72.1   the entire contract, the sum of the following: 
 72.2      (1) as general damages, accrued and unpaid license fees for 
 72.3   any performance for which the licensor has not been paid, plus: 
 72.4      (A) the present value of the total unaccrued license fees 
 72.5   for the remaining contractual term, less the present value of 
 72.6   expenses saved as a result of the licensee's breach; 
 72.7      (B) the present value of the profit and general overhead 
 72.8   which the licensor would have received from full performance by 
 72.9   the licensee; or 
 72.10     (C) damages calculated pursuant to section 336.2B-702; and 
 72.11     (2) the present value of any consequential and incidental 
 72.12  damages, as permitted under this article and the agreement, 
 72.13  determined as of the date of entry of the judgment. 
 72.14     (b) The date for determining present value of unaccrued 
 72.15  license fees and date for determining the sum of accrued license 
 72.16  fees under subsection (a) is: 
 72.17     (1) if the licensee never received a transfer of rights, 
 72.18  the date of the breach of contract; 
 72.19     (2) if the licensor cancels and discontinues the right to 
 72.20  possession or use, the date the licensee no longer had 
 72.21  possession of or the actual ability to use the information; or 
 72.22     (3) if the licensee's rights were not canceled or 
 72.23  discontinued by the licensor as a result of the breach, the date 
 72.24  of the entry of judgment. 
 72.25     (c) To the extent necessary to obtain a full recovery, a 
 72.26  licensor may use any combination of damages provided in 
 72.27  subsection (a), but damages must be reduced by due allowance for 
 72.28  the proceeds of any substitute transaction entered into by the 
 72.29  licensor regarding the same subject matter and made possible by 
 72.30  the breach. 
 72.31     Sec. 101.  [336.2B-710] [LICENSOR'S RIGHT TO COMPLETE.] 
 72.32     On breach of contract by a licensee, the licensor, in the 
 72.33  exercise of reasonable commercial judgment for the purposes of 
 72.34  avoiding loss and of effective realization, may either complete 
 72.35  and identify the information to the contract or cease work on 
 72.36  the information.  In either case, the licensor may recover 
 73.1   damages or pursue other remedies. 
 73.2      Sec. 102.  [336.2B-711] [LICENSOR'S RIGHT TO OBTAIN 
 73.3   POSSESSION.] 
 73.4      (a) After a breach of a license by the licensee that is 
 73.5   material as to the entire contract, the licensor has a right to 
 73.6   take possession of any copies of the licensed information and of 
 73.7   any other materials that were to be returned by the licensee 
 73.8   pursuant to the contract and to prevent the licensee's continued 
 73.9   exercise of rights in the licensed information.  Subject to 
 73.10  subsection (c), to the extent necessary to enforce these rights, 
 73.11  a court may enjoin the licensee from continued exercise of 
 73.12  rights in the information and may order that the licensor or an 
 73.13  officer of the court take the steps described in section 
 73.14  336.2B-629(b).  The licensor may proceed by judicial action 
 73.15  under this section, but may proceed without judicial process if 
 73.16  it complies with section 336.2B-712.  
 73.17     (b) If the agreement so provides, a court may require the 
 73.18  licensee to assemble all copies of the information and other 
 73.19  information relating thereto and make them available to the 
 73.20  licensor at a place designated by the licensor which is 
 73.21  reasonably convenient to both parties. 
 73.22     (c) The remedies under this section are not available if 
 73.23  the information, before breach and in the ordinary course of 
 73.24  performance under the license, was altered or commingled so as 
 73.25  to be no longer reasonably separable or identifiable from other 
 73.26  property or information of the licensee to the extent the remedy 
 73.27  cannot be administered without undue harm to the information or 
 73.28  property of the licensee or another person. 
 73.29     Sec. 103.  [336.2B-712] [LICENSOR'S SELF-HELP.] 
 73.30     (a) A licensor may proceed under section 336.2B-711 without 
 73.31  judicial process only if there is a breach that is material as 
 73.32  to the entire contract without regard to contractual terms 
 73.33  defining material breach and acting without judicial process can 
 73.34  be done without a foreseeable breach of the peace, risk of 
 73.35  injury to person, or significant damage to or destruction of 
 73.36  information or property of the licensee. 
 74.1      (b) The limitations on a licensor's right to act without 
 74.2   judicial process may not be waived by the licensee before breach 
 74.3   of contract. 
 74.4      (c) A licensor may not include in the subject matter of a 
 74.5   license the means to enforce its rights under subsection (a) 
 74.6   unless the licensee manifests assent to a term of the license 
 74.7   providing that it may do so.  If a contractual term authorizes 
 74.8   the licensor to include a means to enforce its rights, the 
 74.9   following rules apply: 
 74.10     (1) The licensor's use of electronic remedies to prevent 
 74.11  further use of the information is subject to the limitations in 
 74.12  subsection (a) and section 336.2B-711.  Exercise of the means to 
 74.13  prevent further use in circumstances in which the licensee has 
 74.14  not committed a material breach of contract constitutes a breach 
 74.15  of contract by the licensor. 
 74.16     (2) If the licensor's use of the means to prevent further 
 74.17  use of the information harms property or information of the 
 74.18  licensee, the licensee may recover as damages for that harm 
 74.19  compensation for any loss resulting in the ordinary course as 
 74.20  measured in any manner that is reasonable, in light of the 
 74.21  difficulty or ease of restoring or recreating any information 
 74.22  that was harmed. 
 74.23     (d) Except as otherwise expressly provided in this section, 
 74.24  the licensee's remedies and the limitations on the licensor 
 74.25  under this section may not be waived or altered by agreement. 
 74.26     Sec. 104.  [336.2B-713] [LICENSOR'S RIGHT TO DISCONTINUE.] 
 74.27     In the event of a material breach of contract, a licensor 
 74.28  may:  
 74.29     (1) discontinue access by the licensee in a continuous 
 74.30  access contract; or 
 74.31     (2) instruct any third person that is assisting the 
 74.32  transfer of rights or performance of the contract to discontinue 
 74.33  its performance. 
 74.34                       C. Licensee's Remedies 
 74.35     Sec. 105.  [336.2B-714] [LICENSEE'S DAMAGES.] 
 74.36     (a) Subject to subsection (b), on material breach of 
 75.1   contract by a licensor, the licensee may recover as damages 
 75.2   compensation for the particular breach of performance or, if 
 75.3   appropriate, as to the entire contract, the sum of the following:
 75.4      (1) as general damages, payments made to the licensor for 
 75.5   performance that has not been rendered, plus: 
 75.6      (A) the present value, as of the date of breach, of the 
 75.7   market value if any of any performance not provided minus the 
 75.8   license fees for the performance, both of which must be 
 75.9   calculated in the case of damages for the entire contract, for 
 75.10  the remaining contractual term plus any extensions available as 
 75.11  of right; 
 75.12     (B) damages computed pursuant to section 336.2B-702; or 
 75.13     (C) if a licensee has accepted performance from the 
 75.14  licensor and not revoked acceptance, the present value, at the 
 75.15  time and place of performance, of the difference between the 
 75.16  value of the performance accepted and the value of the 
 75.17  performance had there been no defect, not to exceed the agreed 
 75.18  price; and 
 75.19     (2) the present value of incidental and consequential 
 75.20  damages resulting from the breach as of the date of the entry of 
 75.21  judgment. 
 75.22     (b) The amount of damages calculated under subsection (a) 
 75.23  must be: 
 75.24     (1) reduced by expenses avoided as a result of the breach; 
 75.25  and 
 75.26     (2) if further performance is not anticipated under the 
 75.27  agreement, reduced by any unpaid license fees that relate to 
 75.28  performance by the licensor which has been received by the 
 75.29  licensee, but increased by the amount of any license fees 
 75.30  already paid that relate to performance by the licensor which 
 75.31  have not been received by the licensee. 
 75.32     (c) Market value is determined as of the place for 
 75.33  performance.  Due weight must be given to any substitute 
 75.34  transaction entered into by the licensee based on the extent to 
 75.35  which the substitute transaction involved contractual terms, 
 75.36  performance, and information that were similar in terms, 
 76.1   quality, and character to the information or agreed performance. 
 76.2      (d) To the extent necessary to obtain a full recovery, a 
 76.3   licensee may use any combination of the measure of damages 
 76.4   provided in subsection (a). 
 76.5      Sec. 106.  [336.2B-715] [LICENSEE'S RIGHT OF RECOUPMENT.] 
 76.6      (a) If a licensor is in breach of contract, the licensee, 
 76.7   after notifying the licensor of its intention to do so, may 
 76.8   deduct all or any part of the damages resulting from breach from 
 76.9   any part of the license fee still due under the same contract. 
 76.10     (b) If a nonmaterial breach of contract has not been cured, 
 76.11  a licensee may exercise its rights under subsection (a) only if 
 76.12  the agreement does not require further affirmative performance 
 76.13  by the licensor and the amount of damages to be deducted can be 
 76.14  readily liquidated under the terms of the agreement. 
 76.15     Sec. 107.  [336.2B-716] [LICENSEE'S RIGHT TO CONTINUE USE.] 
 76.16     On breach of contract by a licensor, the licensee may 
 76.17  continue to exercise its rights under the contract.  If the 
 76.18  licensee elects to continue to exercise those rights, the 
 76.19  following rules apply: 
 76.20     (1) The licensee is bound by all of the terms and 
 76.21  conditions of the contract, including restrictions as to use, 
 76.22  disclosure, and noncompetition, and any obligations to pay 
 76.23  license fees or royalties. 
 76.24     (2) Subject to section 336.2B-.... (waiver), the licensee 
 76.25  may pursue remedies with respect to accepted transfers or 
 76.26  performance, including the right of recoupment. 
 76.27     (3) The licensor's rights and remedies remain in effect as 
 76.28  if the licensor had not been in breach. 
 76.29     Sec. 108.  [336.2B-717] [LICENSOR'S LIABILITY OVER.] 
 76.30     (a) If a licensee is sued by a third party other than for 
 76.31  infringement or other claims under subsection (b) and the 
 76.32  licensor is answerable over to the licensee, the licensee may 
 76.33  notify the licensor of the litigation.  If the notice states 
 76.34  that the licensor may come in and defend and that if it does not 
 76.35  do so the licensor will be bound in any action between the 
 76.36  licensor and the licensee by any determination of fact common in 
 77.1   the two litigations, the licensor is so bound unless the 
 77.2   licensor after seasonable receipt of the notice comes in and 
 77.3   defends. 
 77.4      (b) If a licensee receives notice of litigation against it 
 77.5   for infringement, defamation, and similar claims relating to 
 77.6   information provided by the licensor, or claims of the like in 
 77.7   reference to the information, the following rules apply: 
 77.8      (1) The licensee shall seasonably notify the licensor or be 
 77.9   barred from any remedy or recovery from or against the licensor 
 77.10  for liability established by the litigation. 
 77.11     (2) The licensor may demand in a record that the licensee 
 77.12  turn over control of the litigation, including settlement.  If 
 77.13  the licensor is answerable over to the licensee for the claim or 
 77.14  the contract is a nonexclusive license and the demand states 
 77.15  that the licensor will bear all of the expenses and satisfy any 
 77.16  adverse judgment or settlement and the licensor provides 
 77.17  reasonable assurance of its capability to do so, the licensee is 
 77.18  barred from any remedy over against the licensor except for 
 77.19  costs already incurred.  The licensor may obtain control of the 
 77.20  action by appropriate legal remedies unless the licensee after 
 77.21  seasonable receipt of the demand turns over control.