I
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 Representa-
tives 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 MANUFAC-
TURERS.—An action which is brought in a Federal
or State court against a person because of a com-
puter date failure shall be deemed to be based solely
in contract and shall only allow recovery for con-
sequential business loss and costs of repairs or re-
placement resulting from the failure if the following
conditions are met:
(A) The plaintiff in the action has not suf-
fered 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 para-
graph (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 ex-
periences 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 com-
puter program or software or hardware
(4) DEFINITION.—For purposes of this sub-
section, the term ‘‘person’’ means a person who is
engaged in commerce to design, develop, or manu-
facture 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)) be-
cause of a computer date failure shall be deemed to
be based solely in contract and shall only allow re-
covery 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 suf-
fered 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 pro-
tect 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 actu-
ally simulating the transition from Decem-
ber 31, 1999 to January 1, 2000 and
made any other test that a reasonable per-
son 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 Con-
version 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 Con-
version shall make available the notice it re-
ceived under clause (iii) on the Council’s home-
page 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 ac-
tion to recover damages resulting directly or indi-
rectly from a computer date failure, an action based
on breach of contract, a shareholder or derivative ac-
tion, and an action based on an alleged failure to
properly detect, disclose, prevent, report on, or reme-
diate 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 soft-
ware to accurately store, process, provide, or re-
ceive data from, into, and between the years
1999 and 2000 and beyond if all other tech-
nology 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 in-
directly in a computer in order to bring about a cer-
tain 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 func-
tions, including logic, arithmetic, data processing,
data storage and retrieval, communication, or con-
trol.
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 com-
puter 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 pur-
poses 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 meth-
ods of competition, and
(2) includes any State law similar to the laws
referred to in subparagraph (A).
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