E-Contracts and E-Signatures

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

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).

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.

Online Acceptances

Click-on Agreements and 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 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).



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.



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.



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.

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.

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.

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.