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E-Contracts

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Introduction

Most courts find E-Contracts involve basic principles of contract law, applied in the online context.

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§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).

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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.

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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).

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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).

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§ 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.

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§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.

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§ 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.

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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.

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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.

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§ 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.