§6612 — Title 15 Commerce and Trade | U.S. Code

Summary

For Y2K lawsuits that are not about breaking or refusing a contract, a defendant cannot be held responsible unless the person suing proves that the defendant knew or should have known about a real or possible Y2K problem. The proof must meet the state-law evidence standard that was in effect the day before January 1, 1999. For money-damage suits where the defendant is not the maker, seller, distributor, or service provider of the failing item, and the plaintiff is not in "substantial privity" with the defendant, the law explains what “substantial privity” means (either a contract between them or the plaintiff was specifically named as the person meant to benefit). Claims that require showing the defendant knew or should have known include fraud, breach of fiduciary duty, negligent misrepresentation, and interference with contracts or business, but do not include ordinary negligence. Simply selling, leasing, renting, or controlling the failed system or product is not alone enough to win damages. Any contract breach claim follows the contract terms. Protections for information shared under section 4 of the Year 2000 Information and Readiness Disclosure Act apply to Y2K cases.

Title 15, §6612

Commerce and Trade — Source: USLM XML via OLRC

(a)In a Y2K action other than a claim for breach or repudiation of contract, and in which the defendant’s actual or constructive awareness of an actual or potential Y2K failure is an element of the claim, the defendant is not liable unless the plaintiff establishes that element of the claim by the standard of evidence under applicable State law in effect on the day before January 1, 1999.

(b)(1)With respect to any Y2K action for money damages in which—

(A)the defendant is not the manufacturer, seller, or distributor of a product, or the provider of a service, that suffers or causes the Y2K failure at issue;

(B)the plaintiff is not in substantial privity with the defendant; and

(C)the defendant’s actual or constructive awareness of an actual or potential Y2K failure is an element of the claim under applicable law,

(2)For purposes of paragraph (1)(B), a plaintiff and a defendant are in substantial privity when, in a Y2K action arising out of the performance of professional services, the plaintiff and the defendant either have contractual relations with one another or the plaintiff is a person who, prior to the defendant’s performance of such services, was specifically identified to and acknowledged by the defendant as a person for whose special benefit the services were being performed.

(3)For purposes of paragraph (1)(C), claims in which the defendant’s actual or constructive awareness of an actual or potential Y2K failure is an element of the claim under applicable law do not include claims for negligence but do include claims such as fraud, constructive fraud, breach of fiduciary duty, negligent misrepresentation, and interference with contract or economic advantage.

(c)The fact that a Y2K failure occurred in an entity, facility, system, product, or component that was sold, leased, rented, or otherwise within the control of the party against whom a claim is asserted in a Y2K action shall not constitute the sole basis for recovery of damages in that action. A claim in a Y2K action for breach or repudiation of contract for such a failure is governed by the terms of the contract.

(d)The protections for the exchanges of information provided by section 4 of the Year 2000 Information and Readiness Disclosure Act (Public Law 105–271) shall apply to any Y2K action.

Editorial Notes

References in Text

section 4 of the Year 2000 Information and Readiness Disclosure Act, referred to in subsec. (d), is section 4 of Pub. L. 105–271, which was formerly set out in a note under section 1 of this title.

§6612 State of Mind; Bystander Liability; Control

Summary

Title 15, §6612

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Editorial Notes

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