Cyberlaw and the Global Economy Class 2.1: Online Transactions Harvard Law School Fall, 2004 John Palfrey September 16, 2004

Cyberlaw and the Global Economy Commercial Transactions Intellectual Property Data Protection, Security and Privacy ICT and Development 2.1 Online Transactions 2.2 Spam 2.3 Mergers & Acquisitions

Roadmap for today Online TransactionsOnline Transactions –Blocking and tackling of transactions in digital goods and services ShrinkwrapShrinkwrap ClickwrapClickwrap BrowsewrapBrowsewrap –Cross-border dynamics –[Other issues, if time permits Taxation problemsTaxation problems E-signatures: UETA, E-Sign, EU Directives]E-signatures: UETA, E-Sign, EU Directives]

Shrinkwrap Software purchase in shrinkwrapSoftware purchase in shrinkwrap MicrosoftXP Office box reads:MicrosoftXP Office box reads: “You must accept the enclosed License Agreement before you can use this product. … If you do not accept the terms of the License Agreement, you should promptly return the product for a refund.”

Shrinkwrap - II MicrosoftXP OfficeMicrosoftXP Office Privacy Policy:Privacy Policy: “Instructions and Microsoft’s privacy policy will be detailed to the user during launch of the product.”

Shrinkwrap – III Delayed presentation of termsDelayed presentation of terms –When is a contract formed? –On what grounds might it not be a binding contract? “Take it or leave it” situation?“Take it or leave it” situation? –Brower v. Gateway 2000, Inc.

Shrinkwrap – IV Transaction in shrinkwrapped software.Transaction in shrinkwrapped software. –Customer is in Amsterdam. –Seller is in the Bay Area. –Customer is bound by an arbitration agreement in California. –Customer can return the goods, but they only cost $9.99 USD.

Clickwrap Method by which assent is obtained: who offers, who accepts? Why and how does it matter?Method by which assent is obtained: who offers, who accepts? Why and how does it matter? When is a contract formed?When is a contract formed? How many people actually read the agreements as they go through them? Does it matter if no one reads them?How many people actually read the agreements as they go through them? Does it matter if no one reads them? Do we seek a contract regime that is more protective of consumers online in some fashion?Do we seek a contract regime that is more protective of consumers online in some fashion? Impact of the unsympathetic plaintiffs?Impact of the unsympathetic plaintiffs? –Rudder v. Microsoft (Ontario, 1999)

Browsewrap Is it enough for the contract that you seek to bind your customer is linked from somewhere on the site?Is it enough for the contract that you seek to bind your customer is linked from somewhere on the site? Is a click-through strictly necessary to create a binding contract?Is a click-through strictly necessary to create a binding contract? –Specht v. Netscape Communications (2001)

Unconscionability PayPal v. Comb:PayPal v. Comb: –Is it a browsewrap case or an unconscionability case? Does it differ from Brower v. Gateway?Does it differ from Brower v. Gateway? Does this doctrine help with cross-border problems?Does this doctrine help with cross-border problems?

Problem 13.5, Mann p. 214 “Article 10 Information to be provided […]“Article 10 Information to be provided […] 3. Contract terms and general conditions provided to the recipient must be made available in a way that allows him to store and reproduce them.” -- EU E-Commerce Directive EU E-Commerce DirectiveEU E-Commerce Directive

Conflict Imagine a dispute in a transaction between the customer in Amsterdam and the company in the United States.Imagine a dispute in a transaction between the customer in Amsterdam and the company in the United States. How do we determine the choice of law that shall apply?How do we determine the choice of law that shall apply? –If it’s in the contract, is that the end of the story? Does the European customer lose her consumer protections as her home country has defined them? (EU Distance Sale Directive, E- Commerce Directive). –If the contract is silent on this term, what do we do? –(Might consider the impact of CISG. How do we know if it’s “goods” that are involved in digital transactions? B2B v. B2C distinction.) CISG Taxation: Can the Bellas Hess rule work globally?Taxation: Can the Bellas Hess rule work globally? –Grants safe harbor to sellers “whose only connection with customers in the taxing State is by common carrier or the US Mail”.

Admin Please sign up:Please sign up: –H2O (required) H2O (Questions? Office Hours:Office Hours: –Thursdays, 1:00 – 3:00 p.m. to reserve time)

Berkman Center for Internet & Society Harvard Law School John Palfrey September 16, 2004