Fundamentals of Business Law
Summarized Cases, 8th Ed., and Excerpted Cases, 2nd Ed.
ROGER LeROY MILLER
Institute for University Studies
Arlington, Texas
GAYLORD A. JENTZ
Herbert D. Kelleher Emeritus
Professor in Business Law
University of Texas at Austin
Learning Objectives
• What are some important clauses to include
when making offers to form 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?
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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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).
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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Forming Contracts Online
• Dispute Settlement Provisions.
– Choice of Law.
– Choice of Forum.
– E-Bay uses online dispute resolution.
• Displaying the Offer (via hyperlink).
– CASE 13.1 Feldman v. Google, Inc. (Pennsylvania,
2007).
• How Offer Will Be Accepted.
– Amazon.com--Checkout.
– “I Accept” Button to Click.
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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Online Acceptances
• Click-on Agreements.
– CASE 13.2 Mortgage Plus, Inc. v. DocMagic, Inc.
(Kansas, 2004).
• 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.
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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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.
• Browse-Wrap Terms.
– CASE 13.3 Specht v. Netscape
Communications Company (2002).
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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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.
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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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.
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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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.
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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UETA and Federal E-SIGN
• E-SIGN explicitly
refers to UETA.
• Provides that ESIGN is pre-empted
by state passing of
UETA.
• But state law must
conform to
minimum E-SIGN
procedures.
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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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.
• Timing: “E-Mailbox” Rules.
– Dispatched when leaves control of sender.
– Received when enters recipient’s processing
system.
Copyright © 2010 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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