Chapter 13 E-Commerce Contracts PowerPoint Slides to Accompany ESSENTIALS OF BUSINESS AND ONLINE COMMERCE LAW 1st Edition by Henry R. Cheeseman Chapter 13 E-Commerce Contracts Slides developed by Les Wiletzky

The Internet and World Wide Web E-Commerce The sale of goods and services by computer over the Internet Internet A collection of millions of computers that provide a network of electronic connections between computers World Wide Web An electronic connection of computers that support a standard set of rules for the exchange of information

Uniform Computer Information Transactions Act (UCITA) A model act that provides uniform and comprehensive rules for contracts involving: computer information transactions software licenses information licenses

Electronic Mail (E-mail) Electronic written communication between individuals using computers connected to the Internet Controlling the Assault of Non-Solicited Pornography and Marketing Act Called the CAN-SPAM Act Prohibits spammers from using falsified headers in e-mail messages Requires spammers who send sexually oriented e-mail to properly label it as such

E-Mail and Web Contracts E-mail is sometimes the method used to negotiate and agree on contract terms and to send and agree to the final contract Assuming that all of the elements to establish a contract are present, an e-mail contract is valid and enforceable Electronic contracts meet the writing requirements of the Statute of Frauds for most contracts

Electronic Signatures Electronic Signature in Global and National Commerce Act (E-Sign Act) Recognizes and gives electronic signatures the same force and effect as a pen-inscribed signature on paper The act is technology neutral i.e., the law does not define or decide which technologies should be used to create a legally binding signature in cyberspace The act specifies ways to verify electronic signatures

Domain Names Domain name – a unique name that identifies an individual’s or company’s Web site Internet Corporation for Assigned Names and Numbers (ICANN) Approves registrars of domain names Domain names may be registered by filing the appropriate form with the domain name registration service and paying the appropriate fee

Anticybersquatting Consumer Protection Act of 1999 Aimed at cybersquatters who register Internet domain names of famous companies and people and hold them hostage by demanding ransom payments from the famous company or person The name must be famous The domain name was registered in bad faith

E-Commerce and Licensing (1 of 2) Intellectual property and information rights are valuable assets of individuals and businesses License – a contract that transfers limited rights in intellectual property and informational rights Licensor – The owner of intellectual property or informational rights who transfers rights in the property or information to the licensee

E-Commerce and Licensing (2 of 2) Licensee – The party who is granted limited rights in or access to intellectual property or informational rights owned by the licensor Exclusive License – a license that grants the licensee exclusive rights to use informational rights for a specified duration

Licensing Arrangement Licensor License (transfer of rights in intellectual property or information) Licensee

Licensing Agreement Detailed and comprehensive written agreement between the licensor and licensee It sets forth the express terms of their agreement

Electronic Errors (1 of 2) The Uniform Computer Information Transactions Act (UCITA) provides that consumers are not bound by their unilateral electronic errors if the consumer: Promptly upon learning of the error notifies the licensor of the error Does not use or receive any benefit from the information, or make the information or benefit available to a third party

Electronic Errors (2 of 2) Delivers all copies of the information to the licensor or destroys all copies of the information, pursuant to reasonable instructions from the licensor Pays all shipping, reshipping, and processing costs of the licensor [UCITA § 217] Section 217 of the UCITA only applies to consumers who make electronic errors in contracting

Express Warranty Any affirmation of fact or promise by the licensor about the quality of its software or information The UCITA does not require a licensor to make an express warranty about the quality of its software or information [UCITA § 402] The UCITA permits a licensor to disclaim all implied warranties [UCITA § 406(c)]

Breach of License Agreements (1 of 2) The parties to a contract for the licensing of information owe a duty to perform the obligations stated in the contract If a party fails to perform as required, there is a breach of the contract Breach of contract by one party to a licensing agreement gives the non-breaching party certain rights, including recovering damages or other remedies [UCITA § 701]

Breach of License Agreements (2 of 2) Licensee’s refusal of defective tender Licensee’s revocation of acceptance Adequate assurance of performance

Remedies The UCITA provides various remedies that injured parties can obtain against breaching parties: Cancellation Licensor’s damages Licensor’s right to cure Licensee’s damages Specific performance Liquidation of damages

Limitations of Remedies The UCITA provides that the parties to an agreement may limit the remedies available for breach of the contract Limitation of remedies in licenses subject to the UCITA are enforceable unless they are unconscionable [UCITA § 803]

Electronic Communications Privacy Act (ECPA) Makes it a crime to intercept an “electronic communication” At the point of transmission While in transit When stored by a router or server After receipt by the intended recipient Makes it illegal to access stored e-mail as well as e-mail in transmission