Business Law II – Week 2 Lecture 2

e-Contracts

The Internet has had a powerful effect on the law of contracts. As more and more individuals engage in e-commerce, laws have had to be enacted, amended and otherwise changed. This lecture will discuss some of these issues.

The first issue relates to contracts formed online. The offer to these online contracts need to be conspicuous and clearly spelled out. This often takes the form of a link to a separate page that contains the details of the agreement and requiring acceptance of these terms before the transaction is concluded. The terms of these contracts often cover matters, such as remedies and forum selection. There are additional problems surrounding acceptance. For example, shrink-wrap agreements have gained increasing prominence. These agreements are expressed inside the box that hardware and software is packaged. Although these may not be apparent when the item is purchased, the courts often enforce these, especially where the consumer has the right to return the item after reading the terms. Click-on agreements are another type of online acceptance. This is where the buyer is required to indicate assent to terms by clicking on a button on a webpage that that indicates assent, such as a box that says “I agree.”

The next issue concerns e-signatures. States have sought to update the law to allow the acceptance of these e-signatures. For example, The Uniform Electronic Transactions ACT (UETA), which is in effect in many states, updated the law to permit electronic methods of signing. This is done by broadening the definition of a signature to include such actions as a standard webpage click through process. So long as the court finds that a person intended to agree to the terms, this will be considered a valid assent. The UETA applies to e-records and e-signatures relating to a transaction. It requires that the parties consent to conduct the transaction electronically. And a party is permitted to opt out of the UETA. However, the UETA will apply absent this opt out. The law allows consideration of all the circumstances to determine the attribution of a putative e-signature. This law also relates to federal laws that state that no contract, record, or signature may be denied legal effect solely because it is in an electronic form.