© 2005 West Legal Studies in Business A Division of Thomson Learning 1 Food for Thought of the Day "Living with integrity means: Not settling for less than what you know you deserve in your relationships. Asking for what you want and need from others. Speaking your truth, even though it might create conflict or tension. Behaving in ways that are in harmony with your personal values. Making choices based on what you believe, and not what others believe.“ -Barbara De Angelis

© 2005 West Legal Studies in Business A Division of Thomson Learning 2 Welcome to Introduction to Business BUS 002 Agenda TOPIC: Contracts: E-Contracts Check-Ins: Questions, Comments, Reflections, AhHa Moments FYI Article “Like, The Constitution is So Hot”: source WWD Return Think & Write 2 (See me if you have not completed a Think & Write or an Independent Challenge) E-Contracts –Online Offer (Ex. Yahoo’s On-line, Privacy, Copyright Agreements) –Online Acceptance –UETA; E-Sign Act Reflection Emancipate

© 2005 West Legal Studies in Business A Division of Thomson Learning 3 What are some important clauses to include when making offers to form electronic contracts, or e- contracts? How do shrink wrap and click-on agreements differ from other contracts? What is an electronic signature? Are electronic signatures valid? What is a partnering agreement? What purpose does it serve? What is the UETA? What are some of the major provisions of this act? Learning Objectives

© 2005 West Legal Studies in Business A Division of Thomson Learning 4 Terms Online Contract Online Agreement Shrink-Wrap Agreements Browse-Wrap Agreements UCC – Uniform Commercial Code –Law governing sales contract Click-On Agreements E-Signatures

© 2005 West Legal Studies in Business A Division of Thomson Learning 5 Forming Contracts Online Online Offers should include: –Remedies for Buyer. –Statute of Limitations. –What constitutes Buyer’s acceptance. –Method of Payment (including shipping/handling). –Seller’s Refund and Return Policies. –Disclaimers of Liability (seller not accepting responsibility for buyer relying on product). –How Seller will Use Buyer’s Information (Privacy).

© 2005 West Legal Studies in Business A Division of Thomson Learning 6 Online Contract Formation Dispute Settlement Provisions. –Choice of Law (arbitration, etc.). –Choice of Forum (location). –E-Bay uses online dispute resolution. Displaying the Offer (via hyperlink). How Offer Will Be Accepted. –Amazon.com--Checkout. –“I Accept” Button to Click. Review Yahoo!’s online, privacy, copyright agreements

© 2005 West Legal Studies in Business A Division of Thomson Learning 7 Online Acceptances Shrink-Wrap Agreements. (ex. software) –Contract terms are inside the box. –Party opening box agrees to terms by keeping merchandise. Click-On/Click-Wrap Agreements occur when Buyer “checks out” or clicks on “I Accept” button on Seller’s website or when software is installed. –i.LAN Systems Inc. v. NetScout Service Level Corp. (2002). Browse-Wrap Agreements occur when an Internet user at the time of using or downloading a product in which no agreement is required before use. –Specht v. Netscape Communications (2002).

© 2005 West Legal Studies in Business A Division of Thomson Learning 8 E-Signatures E-Signature Technologies. –E-Signature is an electronic signature of a person’s agreement with the terms of an on-line contract. –Asymmetric Cryptosystem (creates a digital signature using a private code). –Cyber Notary (legally verifies the signature) State Law Governing E-Signatures. –Uniform Electronic Transactions Act (UETA) (1999). –Most states have joined – 46 so far. –Not all states have the same laws governing e- signatures, California is one of them. Federal Law. –E-SIGN (2000) gives e-signatures and e-documents legal force globally and nationally.

© 2005 West Legal Studies in Business A Division of Thomson Learning 9 What do you think? In groups of 3-4, answer the following questions? Read and discuss Case 10.3 In re: Cafeteria Operators on p. 315

© 2005 West Legal Studies in Business A Division of Thomson Learning 10 Partnering Agreements Sellers and Buyers agree to do business frequently and establishes terms for all online agreements. At your seat, write down some types of Partnering Agreements

© 2005 West Legal Studies in Business A Division of Thomson Learning 11 Uniform Electronic Transactions Act (UETA & E-Sign) Purpose is to remove barriers to forming electronic commerce. UETA is model state law – enacted by 46 states and the District of Columbia – recognizing the validity of electronic contracts, records, and signatures. UETA applies only to e-records ( , faxes, etc.) and e-signatures relating to a transaction. E-SIGN is pre-empted (stopped) if state has passed UETA. State law must conform to minimum E-SIGN procedures (ex. Must be available to be retained and reproduced online, banking online, etc).

© 2005 West Legal Studies in Business A Division of Thomson Learning 12 Highlights of UETA Parties must agree to Conduct Transactions Electronically. –A party can “opt out” of UETA terms. Attribution—process to ensure person sending an electronic record is in fact the real person. Electronic Errors (ex. breach in security). “ box” Rules. –Dispatched when leaves control of sender. –Received when enters recipient’s processing system.

© 2005 West Legal Studies in Business A Division of Thomson Learning 13 Uniform Computer Information Transaction Act (UCITA) Model state legislation governing contracts for computer information – that is, electronic information obtained from or through the use of a computer, or that is in a form capable of being processed by a computer. Applies to computer information. Software is not a “good” but intellectual property. Software is licensed, not sold; License contract gives Buyer (Licensee) only specific rights. Attribution and Authentication. Mass Market Licenses.

© 2005 West Legal Studies in Business A Division of Thomson Learning 14 Website Resources for Online Contracts

© 2005 West Legal Studies in Business A Division of Thomson Learning 15 What do you think? View the Video “Offer & Acceptance” Did I just sale my car? In groups of 3-4, answer the following questions? #1… Has a contract been formed? Has there been a valid offer and acceptance? Has the contract been formed yet? Oscar and Maria have now begun negotiations on Maria's truck. What mistakes did Vinny make in the video that Oscar and Maria should avoid in their negotiations? # 2…Reframe (change)…How could this scenario be changed to an E-Contract situation?

© 2005 West Legal Studies in Business A Division of Thomson Learning 16 Reflection How might today’s content impact my practice in business? What implications might today’s content have on the local, state, national, and global communities? What have I learned about law and business that will influence my practice?