BUSINESS LAW
Alternate Edition 11thEd.
Jentz  Miller  Cross
Chapter 19
E-Contracts and E-Signatures
Copyright © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
§1: Online Contract Formation
 Online Offers.
–Displaying the Offer. Seller’s
website should include hyperlink to
page with full contract.
–CASE 19.1 Feldman v. Google,
Inc. (2007).
Copyright © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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Provisions to Include
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Remedies for Seller and 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 © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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Provisions to Include
 Dispute Settlement Provisions.
– Choice of Law.
– Choice of Forum.
– E-Bay uses online dispute resolution.
 How Offer Will Be Accepted.
– Amazon.com--Checkout.
– “I Accept” Button to Click.
Copyright © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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Click Agreements
 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 © 2009 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.
– CASE 19.2 Mortgage Plus, Inc. v.
DocMagic, Inc. (2004).
 Browse-Wrap Terms.
Copyright © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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§ 2: E-Signatures
 E-Signature Technologies.
– Digitized Handwritten Signatures (credit
card checkout).
– Cyber Notary.
 State Law Governing E-Signatures.
– Uniform Electronic Transactions Act
(1999).
Copyright © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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Federal Law on E-Signatures
 E-SIGN (2000) gives e-signatures and edocuments legal force.
 CASE 19.3 Amber Chemical, Inc. v.
Reilly Industries, Inc. (2007).
Copyright © 2009 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 © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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§ 3: The Uniform Electronic
Transactions Act
 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 © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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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 ESIGN procedures.
Copyright © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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E-Sign and UETA
Copyright © 2009 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.
Copyright © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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Highlights of UETA
 Electronic Errors.
 “E-Mailbox” Rules.
– Dispatched when leaves control of
sender.
– Received when enters recipient’s
processing system (even if unaware).
Copyright © 2009 South-Western Legal Studies in Business,
a part of South-Western Cengage Learning.
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