© 2008 West Legal Studies in Business A Division of Thomson Learning 1 BUSINESS LAW TODAY Essentials 8 th Ed. Roger LeRoy Miller - Institute for University Studies, Arlington, Texas Gaylord A. Jentz - University of Texas at Austin, Emeritus Chapter 10 E-Contracts and E-Signatures

© 2008 West Legal Studies in Business A Division of Thomson Learning 2 Learning Objectives  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 3 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).

© 2008 West Legal Studies in Business A Division of Thomson Learning 4 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.

© 2008 West Legal Studies in Business A Division of Thomson Learning 5 Click-On Agreements  CASE 10.1 Mortgage Plus, Inc. v. DocMagic, Inc. (2004).

© 2008 West Legal Studies in Business A Division of Thomson Learning 6 Online Acceptances  Shrink-Wrap Agreements. Contract terms are inside the box. Party opening box agrees to terms by keeping merchandise.  Enforceable Contract Terms. (UCC ).  Additional Terms.

© 2008 West Legal Studies in Business A Division of Thomson Learning 7 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).

© 2008 West Legal Studies in Business A Division of Thomson Learning 8 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 e- documents legal force. CASE 10.3 Amber Chemical, Inc. v. Reilly Industries, Inc. (2007).

© 2008 West Legal Studies in Business A Division of Thomson Learning 9 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 e- signatures relating to a transaction.

© 2008 West Legal Studies in Business A Division of Thomson Learning 10 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.

© 2008 West Legal Studies in Business A Division of Thomson Learning 11 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.  “ box” Rules. Dispatched when leaves control of sender. Received when enters recipient’s processing system.

© 2008 West Legal Studies in Business A Division of Thomson Learning 12 UETA Summary