BUSINESSthLAW TODAY
Essentials 8 Ed.
Roger LeRoy Miller - Institute for University Studies, Arlington, Texas
Gaylord A. Jentz - University of Texas at Austin, Emeritus
Chapter
10
© 2008 West Legal Studies in Business
A Division of Thomson Learning
E-Contracts and
E-Signatures
1
Learning Objectives
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What are some important clauses to include
when making offers to form electronic contracts
(or e-contracts)?
How do shrink wrap and click-on agreements
differ from other contracts? How have traditional
laws been applied to these agreements?
What is an electronic signature? Are electronic
signatures valid?
What is a partnering agreement? What purpose
does it serve?
What is the UETA? What are some of the major
provisions of this act?
© 2008 West Legal Studies in Business
A Division of Thomson Learning
2
Forming Contracts Online
 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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A Division of Thomson Learning
3
Provisions to Include
 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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4
Click-On Agreements
 CASE 10.1
Mortgage Plus, Inc. v.
DocMagic, Inc. (2004).
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5
Online Acceptances
 Shrink-Wrap Agreements.
Contract terms are inside the box.
Party opening box agrees to terms by keeping
merchandise.
 Enforceable Contract Terms. (UCC 2204).
 Additional Terms.
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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.
 Browse-Wrap Terms.
CASE 10.2 Specht v. Netscape
Communications (2002).
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A Division of Thomson Learning
7
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 edocuments legal force.
CASE 10.3 Amber Chemical, Inc. v. Reilly
Industries, Inc. (2007).
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A Division of Thomson Learning
8
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 esignatures relating to a transaction.
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A Division of Thomson Learning
9
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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A Division of Thomson Learning
10
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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A Division of Thomson Learning
11
UETA Summary
© 2008 West Legal Studies in Business
A Division of Thomson Learning
12