1. © 2004 West Legal Studies in Business A Division of Thomson Learning 1 Chapter 18 E-Contracts Chapter 18 E-Contracts

2. © 2004 West Legal Studies in Business A Division of Thomson Learning 2 Introduction Most courts find E-Contracts involve basic principles of contract law, applied in the online context.

3. © 2004 West Legal Studies in Business A Division of Thomson Learning 3 §1: Online Contract Formation Online Offers should include:  Remedies for Buyer.  Statute of Limitations.  What constitutes Buyer’s acceptance.  Method of Payment.  Seller’s Refund and Return Policies.  Disclaimers of Liability.  How Seller will Use Buyer’s Information (Privacy). Online Offers should include:  Remedies for Buyer.  Statute of Limitations.  What constitutes Buyer’s acceptance.  Method of Payment.  Seller’s Refund and Return Policies.  Disclaimers of Liability.  How Seller will Use Buyer’s Information (Privacy).

4. © 2004 West Legal Studies in Business A Division of Thomson Learning 4 Online Contract Formation Dispute Settlement Provisions.  Choice of Law.  Choice of Forum.  E-Bay uses online dispute resolution. Displaying the Offer (via hyperlink). How Offer Will Be Accepted.  Amazon.com--Checkout.  “I Accept” Button to Click. Dispute Settlement Provisions.  Choice of Law.  Choice of Forum.  E-Bay uses online dispute resolution. Displaying the Offer (via hyperlink). How Offer Will Be Accepted.  Amazon.com--Checkout.  “I Accept” Button to Click.

5. © 2004 West Legal Studies in Business A Division of Thomson Learning 5 Online Acceptances Click-on Agreements. Shrink-Wrap Agreements.  Contract terms are inside the box.  Party opening box agrees to terms by keeping merchandise. Enforceable Contract Terms. (UCC 2-204). Additional Terms.  Case 18.1: Klocek v. Gateway Inc. (2000). Click-on Agreements. Shrink-Wrap Agreements.  Contract terms are inside the box.  Party opening box agrees to terms by keeping merchandise. Enforceable Contract Terms. (UCC 2-204). Additional Terms.  Case 18.1: Klocek v. Gateway Inc. (2000).

6. © 2004 West Legal Studies in Business A Division of Thomson Learning 6 Online Acceptances Click-On Agreements occur when Buyer “checks out” or clicks on “I Accept” button on Seller’s website or when software is installed.  Case 18.2: i.LAN Systems Inc. v. NetScout Service Level Corp. (2002). Browse-Wrap Terms.  Case 18.3: Specht v. Netscape Communications (2002). Click-On Agreements occur when Buyer “checks out” or clicks on “I Accept” button on Seller’s website or when software is installed.  Case 18.2: i.LAN Systems Inc. v. NetScout Service Level Corp. (2002). Browse-Wrap Terms.  Case 18.3: Specht v. Netscape Communications (2002).

7. © 2004 West Legal Studies in Business A Division of Thomson Learning 7 § 2: E-Signatures E-Signature Technologies.  Asymmetric Cryptosystem.  Cyber Notary. State Law Governing E-Signatures.  Uniform Electronic Transactions Act (1999). Federal Law.  E-SIGN (2000) gives e-signatures and e-documents legal force. E-Signature Technologies.  Asymmetric Cryptosystem.  Cyber Notary. State Law Governing E-Signatures.  Uniform Electronic Transactions Act (1999). Federal Law.  E-SIGN (2000) gives e-signatures and e-documents legal force.

8. © 2004 West Legal Studies in Business A Division of Thomson Learning 8 §3: Partnering Agreements Sellers and Buyers agree as to protocols to create online agreements. Useful for electronic inventory (Just In Time) ordering of parts and supplies. Sellers and Buyers agree as to protocols to create online agreements. Useful for electronic inventory (Just In Time) ordering of parts and supplies.

9. © 2004 West Legal Studies in Business A Division of Thomson Learning 9 § 4: UETA Purpose is to remove barriers to forming electronic commerce. E-Signature is “electronic sound, symbol or process…associated with a record and… adopted by a person with intent to sign the record.” UETA applies only to e-records and e-signatures relating to a transaction. Purpose is to remove barriers to forming electronic commerce. E-Signature is “electronic sound, symbol or process…associated with a record and… adopted by a person with intent to sign the record.” UETA applies only to e-records and e-signatures relating to a transaction.

10. © 2004 West Legal Studies in Business A Division of Thomson Learning 10 UETA and E-SIGN E-SIGN explicitly refers to UETA. Provides that E-SIGN is pre-empted by state passing of UETA. But state law must conform to minimum E-SIGN procedures. E-SIGN explicitly refers to UETA. Provides that E-SIGN is pre-empted by state passing of UETA. But state law must conform to minimum E-SIGN procedures.

11. © 2004 West Legal Studies in Business A Division of Thomson Learning 11 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. “E-Mailbox” Rules.  Dispatched when leaves control of sender.  Received when enters recipient’s processing system. 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. “E-Mailbox” Rules.  Dispatched when leaves control of sender.  Received when enters recipient’s processing system.

12. © 2004 West Legal Studies in Business A Division of Thomson Learning 12 § 5: UCITA 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. 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.

13. © 2004 West Legal Studies in Business A Division of Thomson Learning 13 Law on the Web University of Pennsylvania Law School of UCC Article 2. University of Pennsylvania Law School of UCC Article 2. Baker and McKenzie on E-SIGN. National Conference of Commissioners on Uniform State Laws. National Conference of Commissioners on Uniform State Laws. Legal Research Exercises on the Web. University of Pennsylvania Law School of UCC Article 2. University of Pennsylvania Law School of UCC Article 2. Baker and McKenzie on E-SIGN. National Conference of Commissioners on Uniform State Laws. National Conference of Commissioners on Uniform State Laws. Legal Research Exercises on the Web.