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

2. 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
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman

3. 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
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman

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

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

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

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

8. 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.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman

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 contract is valid and enforceable.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman

10. 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

11. © 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

12. © 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

13. © 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

14. 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

15. © 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

16. © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
Licensing Agreement
Licensor
License
transfer of rights in intellectual property or information)
Licensee
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman

17. 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

18. 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

19. 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

20. © 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

21. 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.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman