[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4240 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4240

To provide that an action, including one to recover damages, resulting 
  from a computer date failure shall be deemed to be based solely in 
contract when certain conditions have been met, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 16, 1998

   Mr. Dreier (for himself and Mr. Cox of California) introduced the 
  following bill; which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
To provide that an action, including one to recover damages, resulting 
  from a computer date failure shall be deemed to be based solely in 
contract when certain conditions have been met, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Y2K Liability and Antitrust Reform 
Act''.

SEC. 2. LIABILITY FOR COMPUTER DATE FAILURE.

    (a) General Rule.--
            (1) Designers, developers, and manufacturers.--An action 
        which is brought in a Federal or State court against a person 
        because of a computer date failure shall be deemed to be based 
        solely in contract and shall only allow recovery for 
        consequential business loss and costs of repairs or replacement 
        resulting from the failure if the following conditions are met:
                    (A) The plaintiff in the action has not suffered 
                any personal injury, excluding emotional harm, as a 
                result of the computer date failure.
                    (B) The defendant in the action has--
                            (i) given notice, described in paragraph 
                        (2), by mail to all buyers known to the 
                        defendant of the computer system or any 
                        component of the system or computer program or 
                        software or hardware that experiences or may 
                        experience a computer date failure and with 
                        respect to buyers not known to the defendant 
                        given notice on the defendant's World Wide Web 
                        site on the Internet;
                            (ii) made available at no charge to the 
                        buyer a repair or replacement for a computer 
                        program or software or hardware which was first 
                        introduced for sale after December 31, 1994, 
                        and which was involved in the computer date 
                        failure; and
                            (iii) made available to the buyer a repair 
                        or replacement for a computer program or 
                        software or hardware which was first introduced 
                        for sale before January 1, 1995, and which was 
                        involved in a computer date failure.
            (2) Notice.--The notice specified in paragraph (1)(B)(i) 
        shall specify the computer system or component of the system or 
        computer program or software supplied by the defendant that 
        experiences or may experience a computer date failure and shall 
        explain the manner by which the buyer may obtain repair or 
        replacement of the computer system or component of the system 
        or computer program or software if repair or replacement is 
        available or obtain additional information on such system, 
        component, program, or software.
            (3) Application.--This subsection shall not be construed to 
        limit the ability of contracting parties to enter into 
        agreements as they deem appropriate on the issues of liability 
        and damages resulting from computer date failure.
            (4) Definition.--For purposes of this subsection, the term 
        ``person'' means a person who is engaged in commerce to design, 
        develop, or manufacture a computer system, computer program or 
        software, or component.
    (b) Special Rule.--
            (1) Other persons.--An action which is brought in a Federal 
        or State court against a person (other than a person described 
        in subsection (a)) because of a computer date failure shall be 
        deemed to be based solely in contract and shall only allow 
        recovery for consequential business loss and costs of repairs 
        or replacement resulting from the failure if the following 
        conditions are met:
                    (A) The plaintiff in the action has not suffered 
                any personal injury, excluding emotional harm, as a 
                result of the computer date failure.
                    (B) The defendant in the action has--
                            (i) made all reasonable efforts to protect 
                        its system, program, or software from a 
                        computer date failure, including efforts to 
                        acquire hardware or software that will not 
                        experience a computer date failure;
                            (ii) not later than July 1, 1999, tested 
                        its systems, programs, or software by actually 
                        simulating the transition from December 31, 
                        1999 to January 1, 2000 and made any other test 
                        that a reasonable person would believe 
                        necessary to prevent a computer date failure;
                            (iii) not later than August 1, 1999, 
                        provided notice to its customers and to the 
                        President's Council on the Year 2000 Conversion 
                        of efforts to avoid a computer date failure, 
                        including a general description of its 
                        compliance efforts, the results of the tests 
                        under clause (ii), and the likelihood that it 
                        will make transition to the Year 2000 without a 
                        computer date failure; and
                            (iv) not later than August 1, 1999, posted 
                        the notice it made under clause (iii) 
                        prominently in its place of business for public 
                        review.
                The President's Council on the Year 2000 Conversion 
                shall make available the notice it received under 
                clause (iii) on the Council's homepage on the worldwide 
                web.
            (2) Application.--This subsection shall not be construed to 
        limit the ability of contracting parties to enter into 
        agreements as they deem appropriate on the issues of liability 
        and damages resulting from computer date failure.
    (c) Definitions.--For purposes of this section:
            (1) Action.--The term ``action'' means an action to recover 
        damages resulting directly or indirectly from a computer date 
        failure, an action based on breach of contract, a shareholder 
        or derivative action, and an action based on an alleged failure 
        to properly detect, disclose, prevent, report on, or remediate 
        a computer date failure.
            (2) Computer date failure.--The term ``computer date 
        failure'' means--
                    (A) a present or future inability of the computer 
                system or computer program or software to accurately 
                store, process, provide, or receive data from, into, 
                and between the years 1999 and 2000 and beyond if all 
                other technology used in combination with such system, 
                program, or software properly exchanges data with it; 
                or
                    (B) the possibility of the existence of any such 
                inability or incompatibility.
            (3) Computer program or software.--The term ``computer 
        program or software'' is a set of statements or instructions to 
        be used directly or indirectly in a computer in order to bring 
        about a certain result.
            (4) Computer system.--The term ``computer system'' means 
        any electronic device or collection of devices, including 
        support devices, networks, and embedded chips and excluding 
        calculators that are not programmable, that contains computer 
        programs or electronic instructions and that performs 
        functions, including logic, arithmetic, data processing, data 
        storage and retrieval, communication, or control.

SEC. 3. TEMPORARY ANTITRUST EXEMPTION.

    (a) Exemption.--Except as provided in subsection (b), the antitrust 
laws shall not apply to conduct engaged in, including making and 
implementing an agreement, solely for the purpose of establishing 
responses designed to mitigate the impact of computer date failure in a 
computer system, in a component of a computer system, or in a computer 
program or software if such conduct occurs, or such agreement is made 
and implemented, only in the period beginning on the date of the 
enactment of this Act and ending December 31, 2001.
    (b) Exception to Exemption.--Subsection (a) shall not apply with 
respect to conduct that results in a boycott of any person.
    (c) Definition of Antitrust Laws.--For purposes of this section, 
the term ``antitrust laws''--
            (1) has the meaning given it in subsection (a) of the first 
        section of the Clayton Act (15 U.S.C. 12(a)), except that such 
        term includes section 5 of the Federal Trade Commission Act (15 
        U.S.C. 45) to the extent such section 5 applies to unfair 
        methods of competition, and
            (2) includes any State law similar to the laws referred to 
        in subparagraph (A).
                                 <all>