Sales Law
October 20, 2009
Winn
Sales Law October 20
• Reading estimate for Thursday 10/22
– Finish Statute of Frauds; Unconscionability 2-13, 2-14
(skip 2-15)
• Review common contract terms; finish
conclusory terms exercise
• Battle of the forms strategy
– Diagram transaction: where is Offer? Acceptance?
– Open statute book, start with 2-207(1), do not rely
on comments or your outline alone
Contract Formation & New Media I
• Unambiguous new contract formation systems
– Business-to-business electronic data interchange
• Corinthian Pharmaceuticals v. Lederle case
– Clickwrap (with appropriate graphical user interface)
– Email exchange (provided not mere preliminary
negotiations in light of content)
• Bad design/drafting can make this ambiguous
– “Please review and agree to the terms of the Netscape
license” (including arbitration term) not binding Specht
v. Netscape 150 F. Supp. 2d 585 (S.D.N.Y. 2005, aff’d 2nd
Cir. 2002)
Ambiguous Clickwrap Interface
Unambiguous Clickwrap Interface
Contract Formation & New Media II
• Ambiguous new contract formation systems
– Pay now, terms later/telephone order
• If existence of terms in box not disclosed in telephone call, why are they
binding just because consumer didn’t return the product?
– Shrinkwrap
• If copyright license terms not provided prior to formation of contract, then
end user gets implied license based on end user’s reasonable expectations
– Browsewrap
• If no unambiguous manifestation of assent, then access to website is
governed by implied copyright license, not by express terms of “site
license”
• Litigated cases all involve B2B unfair trade practices, not consumers
• Unambiguous but unpopular solution under Restatement of
Contracts
– Condition subsequent: if you do not accept these additional terms,
then you must return the computer promptly for a refund
• Information asymmetry & bounded rationality problem: If ethical
merchants did this, then consumers would think they were unethical and
choose unethical merchants instead….
What about “rolling contracts”?
• Most law professors reject, focus on oral
contract/F2F payment for goods in store
– Under Restatement, terms in box are mere proposals
that customer is free not to accept
– Under UCC, additional terms are mere proposals if
buyer is consumer; deemed accepted unless material if
buyer is merchant
• Most practitioners accept, focus on “expectations
of parties” that restrictive terms will come in box
– Under Restatement, implied condition that buyer will
review additional terms and return computer if not
acceptable
– Under UCC, 2-204(3) not 2-207(2)