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The Year 2000 Information & Readiness Disclosure Act

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In conjunction with the start of "National Y2K Action Week," President Clinton signed The Year 2000 Information & Readiness Disclosure Act ("Act") on October 19, 1998.

The purpose of the Act is to encourage the free exchange and disclosure of information regarding Year 2000 issues. The chief components of the Act are to define Year 2000 Statements and Year 2000 Readiness Disclosures.

A. Year 2000 Statements.

1. Contracts. The Act does not amend a contract or warranty unless: (1) expressly agreed; or (2) the Year 2000 Statement was made in conjunction with the contract's or warranty's formation.

2. Claims. A claim based on an allegedly false, misleading, or inaccurate Year 2000 Statement is not valid unless: (1) the statement was material; and (2) the statement is made (a) with knowledge that it was false, inaccurate or misleading; (b) with intent to deceive or mislead, or (c) with a reckless disregard for the statement's accuracy.

3. Internet. The Act provides that the reasonable posting of a Year 2000 Statement on an enterprise's web site is sufficient notice, except in the case of: (1) personal injury or serious physical property damage; (2) prior representations or course of dealing; (3) situations where actual notice is clearly more commercially reasonable; or (4) actual requirements of law.

4. Exclusions. The exceptions and exclusions are complex, but the definition of Year 2000 Statement does not include and the Act does not apply to: (a) filings with the Securities and Exchange Commission or federal banking regulators; (b) statements accompanied by the solicitation of an offer or sale of securities; (c) statements made by manufacturers or sellers to consumers as part of a solicitation; or (d) statements made by manufacturers or sellers of Year 2000 remediation products or services as part of a solicitation, unless the statements contain a notice recited in the Act.

B. Year 2000 Readiness Disclosures. The Act deems Year 2000 Readiness Disclosures as inadmissible against their maker to prove the accuracy or truth of any Year 2000 Statement in the disclosures except: (1) claims for anticipatory breach or repudiation of a contract; or (2) determinations by the court of bad faith, fraud or unreasonableness.

C. Antitrust. The Act provides a very narrow exemption from antitrust claims for conduct between October 19, 1998 and July 14, 2001.

D. Applicability. The Act only applies to Year 2000 Statements between July 14, 1998 and July 14, 2001 and Year 2000 Readiness Disclosures made between October 19, 1998 and July 14, 2001.

E. National Website. The Act requires the Administrator of General Services to create and maintain a national Year 2000 website until July 14, 2002.

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