9 - 1 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Chapter 17: E-Contracts and Licensing

9 - 2 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Uniform Computer Information Transactions Act A model state law that provides uniform and comprehensive rules for contracts involving: –computer information transactions –software licenses –information licenses

9 - 3 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Uniform Computer Information Transactions Act (continued) The UCITA covers the following aspects of licensing information rights: –Formation of a contract –Authenticating the record –Attribution procedure –Performance –Warranties –Breach of license agreements –Limitations of remedies

9 - 4 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman The Internet Collection of millions of computers that provide a network of electronic connections. Originally funded by the Department of Defense. National Science Foundation continued system to facilitate high-speed communications.

9 - 5 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman The World Wide Web Millions of computers supporting HTTP. Web sites and pages are stored on servers operated by Internet service providers. Pages are viewed through web browsers. Extremely attractive to commercial activities.

9 - 6 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Electronic Mail is a widely used application for communication over the Internet. Electronic writing Unique identifying address Allows for instantaneous communication around the world

9 - 7 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Domain Name Domain name – a unique name that identifies an individual’s or company’s Web site. Domain names may be registered by filing the appropriate form with the domain name registration service and paying the appropriate fee.

9 - 8 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Anticybersquatting Consumer Protection Act 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.

9 - 9 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman E-Contracts 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.

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman E-Contracts Writing Requirements Electronic Signature in Global and National Commerce Act –Electronic contracts meet the writing requirements of the Statute of Frauds. –Electronically signed contracts cannot be denied effect because they are in electronic form and are stored and delivered electronically.

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman E-Signatures Electronic Signature in Global and National Commerce Act –Recognizes electronic signatures –Same force and effect as pen- inscribed signature on paper –Allows for verification of digital signatures

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman E-Licensing The Uniform Computer Information Transactions Act (UCITA) governs the creation, performance, and enforcement of computer information transactions. Some states have adopted UCITA. Other states are applying state law and equity principals.

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Licensing 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.

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Licensing (continued) Licensor – The owner of intellectual property or informational rights who transfers rights in the property or information to the licensee. Licensee – The party who is granted limited rights in or access to intellectual property or informational rights owned by the licensor.

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Exclusive License A license that grants the licensee exclusive rights to use informational rights for a specified duration.

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Licensing Agreement Licensor Licensee License transfer of rights in intellectual property or information)

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Licensing Agreement (continued) Detailed and comprehensive written agreement between the licensor and licensee. It sets forth the express terms of their agreement.

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Breach of Licensing Agreements 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.

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Breach of Licensing Agreements (continued) Licensee’s refusal of defective tender Licensee’s revocation of acceptance Adequate assurance of performance

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman 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

© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman 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.