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.
§ “I Accept” Button to Click.
§ Contract terms are inside the box.
§ Party opening box agrees to terms by keeping merchandise.
Enforceable Contract Terms. (UCC 2-204).
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).
Case 18.3: Specht v. Netscape Communications (2002).
§ Asymmetric Cryptosystem.
§ Cyber Notary.
State Law Governing E-Signatures.
§ Uniform Electronic Transactions Act (1999).
§ E-SIGN (2000) gives e-signatures and e-documents legal force.
Sellers and Buyers agree as to protocols to create online agreements.
Useful for electronic inventory (Just in Time) ordering of parts and supplies.
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.
§ Dispatched when leaves control of sender.
§ Received when enters recipient’s processing system.
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.