chapter 19 e-contracts and e-signatures copyright © 2009 south-western legal studies in business, a...

Chapter 19 Chapter 19 E-Contracts and E-SignaturesE-Contracts and E-Signatures

Copyright © 2009 South-Western Legal Studies in Business,

a part of South-Western Cengage Learning.

Jentz Miller Cross

BUSINESS LAW BUSINESS LAW Alternate Edition 11Alternate Edition 11ththEd.Ed.



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§1: Online Contract §1: Online Contract FormationFormation

Online Offers.Online Offers.–Displaying the Offer. Seller’s Displaying the Offer. Seller’s

website should include hyperlink to website should include hyperlink to page with full contract.page with full contract.

–CASE 19.1 CASE 19.1 Feldman v. Google, Feldman v. Google, Inc.Inc. (2007). (2007).



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Provisions to IncludeProvisions to Include

Remedies for Seller and Buyer.Remedies for Seller and Buyer. Statute of Limitations.Statute of Limitations. What constitutes Buyer’s acceptance.What constitutes Buyer’s acceptance. Method of Payment.Method of Payment. Seller’s Refund and Return Policies.Seller’s Refund and Return Policies. Disclaimers of Liability.Disclaimers of Liability. How Seller will Use Buyer’s Information How Seller will Use Buyer’s Information

(Privacy).(Privacy).



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Provisions to IncludeProvisions to Include

Dispute Settlement Provisions.Dispute Settlement Provisions.– Choice of Law.Choice of Law.– Choice of Forum.Choice of Forum.– E-Bay uses online dispute resolution.E-Bay uses online dispute resolution.

How Offer Will Be Accepted.How Offer Will Be Accepted.– Amazon.com--Checkout.Amazon.com--Checkout.– ““I Accept” Button to Click.I Accept” Button to Click.



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Click AgreementsClick Agreements

Shrink-Wrap Agreements.Shrink-Wrap Agreements.– Contract terms are inside the box.Contract terms are inside the box.– Party opening box agrees to terms by keeping Party opening box agrees to terms by keeping

merchandise.merchandise.

Enforceable Contract Terms. (UCC 2-Enforceable Contract Terms. (UCC 2-204).204).

Additional Terms.Additional Terms.



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Online AcceptancesOnline Acceptances Click-OnClick-On Agreements occur when Buyer Agreements occur when Buyer

“checks out” or clicks on “I Accept” button “checks out” or clicks on “I Accept” button on Seller’s website or when software is on Seller’s website or when software is installed.installed.

– CASE 19.2 CASE 19.2 Mortgage Plus, Inc. v. Mortgage Plus, Inc. v. DocMagic, Inc.DocMagic, Inc. (2004). (2004).

Browse-Wrap Terms.Browse-Wrap Terms.



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§ 2: E-Signatures§ 2: E-Signatures

E-Signature Technologies.E-Signature Technologies.– Digitized Handwritten Signatures (credit Digitized Handwritten Signatures (credit

card checkout).card checkout).

– Cyber Notary.Cyber Notary.

State Law Governing E-Signatures.State Law Governing E-Signatures.– Uniform Electronic Transactions Act Uniform Electronic Transactions Act

(1999).(1999).



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Federal Law on E-Federal Law on E-SignaturesSignatures

E-SIGN (2000) gives e-signatures and e-E-SIGN (2000) gives e-signatures and e-documents legal force.documents legal force.

CASE 19.3 CASE 19.3 Amber Chemical, Inc. v. Amber Chemical, Inc. v. Reilly Industries, Inc.Reilly Industries, Inc. (2007). (2007).



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Partnering AgreementsPartnering Agreements

Sellers and Buyers agree as to protocols Sellers and Buyers agree as to protocols to create online agreements.to create online agreements.

Useful for electronic inventory (Just In Useful for electronic inventory (Just In Time) ordering of parts and supplies. Time) ordering of parts and supplies.



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§ 3: The Uniform Electronic § 3: The Uniform Electronic Transactions ActTransactions Act

Purpose is to remove barriers to forming Purpose is to remove barriers to forming electronic commerce.electronic commerce.

E-Signature is “electronic sound, symbol E-Signature is “electronic sound, symbol or process…associated with a record or process…associated with a record and… adopted by a person with intent to and… adopted by a person with intent to sign the record.”sign the record.”

UETA applies only to e-records and e-UETA applies only to e-records and e-signatures relating to a transaction.signatures relating to a transaction.



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UETA and E-SIGNUETA and E-SIGN

E-SIGN explicitly refers to UETA.E-SIGN explicitly refers to UETA. Provides that E-SIGN is pre-empted by Provides that E-SIGN is pre-empted by

state passing of UETA.state passing of UETA. But state law must conform to minimum E-But state law must conform to minimum E-

SIGN procedures.SIGN procedures.



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E-Sign and UETAE-Sign and UETA



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Highlights of UETAHighlights of UETA Parties must agree to Conduct Parties must agree to Conduct

Transactions Electronically.Transactions Electronically.– A party can “opt out” of UETA terms.A party can “opt out” of UETA terms.

Attribution—process to ensure person Attribution—process to ensure person sending an electronic record is sending an electronic record is in factin fact the real person.the real person.



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Highlights of UETAHighlights of UETA

Electronic Errors.Electronic Errors. ““E-Mailbox” Rules. E-Mailbox” Rules.

– Dispatched when leaves control of Dispatched when leaves control of sender.sender.

– Received when enters recipient’s Received when enters recipient’s processing system (even if unaware).processing system (even if unaware).

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