Ch14-SG-BLTS-8e

Chapter 14: 

E-Contracts and E-Signatures

92

WHAT THIS CHAPTER IS ABOUT E-contracts include any contract entered into in e-commerce, whether business to business (B2B) or business to consumer (B2C), and any contract involving the computer industry. This chapter reviews some of the problems of  e-contracts.

CHAPTER OUTLINE I.

FORM FORMIN ING G CONT CONTRA RACT CTS S ONLI ONLINE NE Disputes arising from contracts entered into online concern the terms and the parties’ assent to those terms. A. ONLNE OFFERS Terms should be conspicuous and clearly spelled out. On a Web site, this can be done with a link to a separate page that contains the details. Subjects include remedies, dispute resolution, payment, taxes, refund and return policies, disclaimers, and privacy policies. A click-on acceptance box should also be included. B. ONLNE ACCEPTANCES Generally, a contract can be made and agreed to in any words or conduct sufficient to show agreement. 1.

Click-On Click-On Agreements Agreements A click-on agreement is when a buyer, completing a transaction on a computer, indicates his or her assent to be bound by the terms of the offer by clicking on a button that says, for example, “I agree.” The terms may appear on a Web site through which a buyer obtains goods or services, or on a computer screen when software is loaded.

2.

Shrink-Wrap Shrink-Wrap Agreements Agreements A shrink-wrap agreement is an agreement whose terms are expressed inside a box in which a product is packaged. Usually, the agreement is not between a seller and a buyer, but a manufacturer and the product’s user. Terms generally concern concern warranties, remedies, and and other issues. a. Shrink-Wrap Agreements and Enforceable Contract Terms Courts often enforce shrink-wrap agreements, reasoning that the seller proposed an offer that the  buyer accepted after an opportunity to read the terms. Also, it is more practical to enclose the full terms of sale in a box. b. Shrink-Wra Shrink-Wrap p Terms Terms That May Not Not Be Enforced Enforced If a court finds that the buyer learned of the shrink-wrap terms after the parties entered into a contract, the court might conclude that those terms were proposals for additional terms, which were not part of the contract unless the buyer expressly agreed to them.

3.

II.

Browse Browse-Wr -Wrap ap Terms Terms Browse-wrap terms do not require a user to assent to the terms before going ahead with an online transaction. Offerors of these terms generally assert that they are binding without the user’s active consent. Critics argue that a user should at least be required to navigate past the terms before they should be considered binding.

E-SI E-SIG GNATU NATURE RES S How are e-signatures created and verified, and what is their legal effect? A. E-S E-SIGNATURE TECHNOLOGIES 93

Methods for creating and verifying e-signatures include— 1.

Digitized Digitized Handwritt Handwritten en Signatures Signatures These are graphical images of handwritten signatures that can be created by, for example, a digital pen and pad.

2.

Public-Key Infrastructure-Based Digital Signatures Asymmetric cryptographic keys provide private code for one party and public software for another party, who reads the code to verify the first party’s identity. A cybernotary issues the keys.

3.

Othe Otherr Form Formss A smart card is a credit-card size device embedded with code that can be read by a computer to establish a person’s identity or signature. Other possibilities include retina- and face-scanning.

B. STATE LAWS GOVERNING E-SIGNATURES Most states have laws governing e-signatures, although the laws are not uniform. The Uniform Electronic Transactions Act (UETA), issued in 1999, was an attempt by the National Conference of Commissioners on Uniform State Laws (NCCUSL) to create more uniformity. C. FEDERAL LAW ON E-SIGNATURES AND E-DOCUMENTS In 2000, Congress enacted the Electronic Signatures in Global and National Commerce (E-SIGN) Act to provide that no contract, record, or signature may be denied legal effect solely because it is in an electronic form. Some documents are excluded (such as those governed by UCC Articles 3, 4, and 9.)

III. III.

PARTNE PARTNERIN RING G AGREEM AGREEMENT ENTS S Through a partnering agreement, a seller and a buyer agree in advance on the terms to apply in all transactions subsequently conducted electronically. These terms may include access and identification codes. A partnering agreement, like any contract, can prevent later disputes.

IV.

THE UNIFORM UNIFORM ELECTRONIC ELECTRONIC TRANSACTIO TRANSACTIONS NS ACT The UETA removes barriers to e-commerce by giving the same legal effect to e-records and e-signatures as to paper documents and signatures. A. THE SCOPE AND APPLICABILITY OF THE UETA The UETA applies only to e-records and e-signatures in a transaction (an interaction between two or more people relating to business, commercial, or government activities). The UETA does not apply to laws governing wills or testamentary trusts, the UCC (except Articles 2 and 2A), the UCITA, and other laws excluded by the states that adopt the UETA. B. THE FEDERAL E-SIGN ACT AND THE UETA 1.

Does the E-SIGN E-SIGN Act Act Preempt Preempt the UETA? If a state enacts the UETA without modifying it, the E-SIGN Act does not preempt it. The E-SIGN Act preempts modified versions of the UETA to the extent that they are inconsistent with the E-SIGN Act.

2.

Can the the States Enact Alternative Procedures or Requirements? Under the E-SIGN Act, states may enact alternative procedures or requirements for the use or acceptance of e-records or e-signatures if— a. b. c.

The procedures or requirements are consistent with the E-SIGN Act. The procedures do not give greater legal effect to any specific type of technology. The state law refers to the E-SIGN Act if the state adopts the alternative after the enactment of  the E-SIGN Act.

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C. HIGHLIGHTS OF THE UETA Individual state versions of the UETA as enacted may vary. 1.

The Parties Parties Must Agree to Conduct Their Transaction Transaction Electronically Electronically This agreement may be implied by the circumstances and the parties’ conduct (for example, giving out a business card with an e-mail address on it). Consent may also be withdrawn.

2.

Parties Parties Can “Opt Out” Parties can waive or vary any or all of the UETA, but the UETA applies in the absence of an agreement to the contrary.

3.

Attrib Attributi ution on The effect effect of an e-rec e-record ord in a transa transacti ction on is determ determine ined d from from its contex contextt and circu circumst mstanc ances. es. Attribution refers to the identification of a party. a.

Names Names and “Signa “Signatur tures” es” A person’s name is not necessary to give effect to an e-record, but if, for example, a person types his or her name at the bottom of an e-mail purchase order, that typing qualifies as a “signature” and is attributed to the person.

b.

Rele Releva vant nt Evid Eviden ence ce Any relevant evidence can prove that an e-record or e-signature is, or is not, attributable to a certain person.

c.

Issues Issues Arisi Arising ng outsi outside de the UETA UETA State laws other than the UETA apply to issues that relate to agency, authority, forgery, or contract formation.

4.

Notari Notarizat zation ion A document can be notarized by a notary’s e-signature.

5.

The Effect Effect of Errors Errors If the parties agree to a security procedure and one party does not detect an error because it did not follow the procedure, the conforming party can avoid the effect of the error [UETA 10]. a.

When Other Other State State Laws Determin Determine e the the Effect Effect of an Error Error Other state laws determine the effect if the parties do not agree on a security procedure.

b.

To Avoid Avoid the Effect Effect of an Error Error A party must (1) promptly notify the other party of the error and of his or her intent not to be   bound by it and (2) take reasonable steps to return any benefit or consideration received. If  restitution cannot be made, the transaction may be unavoidable.

6. Timi Timing ng a.

When When Is an E-Reco E-Record rd “Sent” “Sent”?? When it is directed from the sender’s place of business to the intended recipient in a form readable by the recipient’s computer at the recipient’s place of business with the closest relation to the deal (or either party’s residence, if there is no place of business). Once an e-record leaves the sender’s control or comes under the recipient’s control, it is sent.

b.

When Is an E-Record E-Record “Received” “Received”?? When it enters the recipient’s processing system in a readable form—even if no person is aware of its receipt [UETA 15].

TRUE-FALSE QUESTIONS (Answers at the Back of the Book) 1.

A shrink-wrap agreement is normally not enforced.

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2.

A click-on agreement is normally enforced.

3.

State e-signature laws are not uniform.

4.

Under federal law, a signature may be denied legal effect simply because it is in electronic form.

5.

The Uniform Electronic Transactions Act (UETA) is a federal law.

6.

The UETA does not apply to a transaction unless the parties agree to apply it.

7.

Under the UETA, a person’s name is not necessary to give effect to an electronic record.

8.

Under the UETA, a contract is enforceable even if it is in electronic form.

9.

An e-record is considered received under the UETA only if a person is aware of its receipt.

10.

Under the UETA, once an e-record leaves the sender’s control or comes under the recipient’s control, it is sent.

FILL-IN QUESTIONS (Answers at the Back of the Book) Parties __________________ (must/need not) participate in e-commerce e-commerce to make binding contracts, according to the UETA. E-records E-records are valid under the ___________ ________________ _______ (E-SIGN Act only/UETA only/UETA only/E-SIGN only/E-SIGN Act and the UETA). UETA). The UETA supports all e-transactions, _________________ (and creates/ but does not create) rules for them. The UETA __________________ (applies/ does not apply) unless contracting parties agree to use e-commerce in their transactions.

MULTIPLE-CHOICE QUESTIONS (Answers at the Back of the Book) 1.

Alpha Corporation attempts to enter into shrink-wrap agreements with buyers of its products. A shrinkwrap agreement is an agreement whose terms are expressed

a.  b. c. d.

in code code at at the end of a computer computer program. program. inside inside a box box in which which a product product is packaged packaged.. in small small print at the end of a paper contract signed by both parties. on a computer computer screen. screen.

2.

Beta, Beta, Inc., Inc., includ includes es a shrink shrink-wr -wrap ap agreem agreement ent with with its produc products. ts. A court court would would likely likely enforc enforcee this this agreement if a buyer used the product

a.   b. c. d.

after after having having had an opportuni opportunity ty to read read the agreement agreement.. before having had an opportunity to read the agreement. agreement. only after actually actually reading reading the the agreem agreement. ent. none none of the above. above.

3.

Gamma Company agrees to sell software to Holly from Gamma’s Web site. To complete the deal, Holly clicks on a button that, with reference to certain terms, states, “I agree.” The parties have

a.  b. c. d.

a binding binding contract contract that does not not includ includee the terms. terms. a binding contract that includes includes only the terms to which Holly later later agrees. a binding binding contract contract that that inclu includes des the terms. terms. no contrac contract. t.

4.

Local Delivery Company and Regional Trucking, Inc., attempt to enter into a contract in electronic form. Under the Electronic Signatures in Global and National Commerce Act (E-SIGN Act), because this contract is in electronic form, it

a.  b. c. d.

may be denied denied legal legal effect. effect. may not be denie denied d legal legal effect. effect. will be limite limited d to to certai certain n terms. terms. will not be enforced. enforced.

5.

International Investments, Inc., enters into contracts in e-commerce and in traditional commerce. The UETA applies, if at all, only to those transactions in which the parties agree to use

a.   b. c. d.

e-com e-commer merce. ce. traditiona traditionall commerce. commerce. e-commerc e-commercee or traditional traditional commerce. commerce. none none of the above. above.

6.

American Sales Company and B2C Corporation enter into a contract over the Internet. The contract says nothing about the UETA. The UETA applies to

a.   b. c. d.

none of the contract. contract. only the part of the contract that that does not involve involve computer computer information. information. only the part of the contract that involves computer information. the entire entire contract. contract.

7.

Digital Tech, Inc., e-mails an e-record, as part of a business deal, to E-Engineering Corporation. Under the UETA, an e-record is considered sent

a.   b. c. d.

only when it leave leavess the sender’s sender’s control. control. only when it comes under the recipient’s control. when it leaves leaves the sender’s control or comes under the recipient’s control. when it is midway between between the sender sender and recipient.

8.

New Software, Inc. (NSI), and Open Source Company (OSC) agree to follow a certain security procedure in transacting business. NSI fails to follow the procedure and, for this reason, does not detect an error in its deal with OSC. OSC can avoid the effect of the error

a.  b. c. d.

only if NSI’s name name is affixed to the e-record evidencing the error. only if OSC takes reasonable steps to return any benefit benefit or consideration consideration received. received. under under any circumstanc circumstances. es. under under no circumstan circumstances. ces.

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9.

First Financial Corporation and Great Applications, Inc., enter into a contract that falls under the UETA. The UETA covers contracts that are also covered by

a.  b. c. d.

laws governing governing wills wills and trusts only. the Uniform Uniform Commercial Commercial Code only. the Uniform Commercial Information Transactions Act only. none none of the above. above.

10.

a.   b. c. d.

Delta Company and Epsilon, Inc., engage in e-commerce without expressly opting in or out of the UETA. The UETA covers none of the contract. contract. only the part of the contract that does not involve involve e-commerce. only the part of the contract that involves e-signatures. the entire entire contract. contract.

SHORT ESSAY QUESTIONS 1.

Are shrink-wrap and click-on agreements enforceable?

2.

What are some of the provisions of the UETA?

ISSUE SPOTTERS (Answers at the Back of the Book) 1. Applied Products, Inc., does business with Best Suppliers, Inc., online. Under the UETA, what determines the effect of the electronic documents evidencing the parties’ deal? Is a party’s “signature” necessary? 2. Technical Support, Inc., and United Services Corporation enter into a contract that may be subject to the E-SIGN Act and the UETA. Does one of these statutes take precedence over the other? 3. Computer Applications Corporation and Digitized Data, Inc., agree to a contract in e-commerce. Assuming the deal falls under the UETA, what effect might the UETA have in this situation?

CUMULATIVE HYPOTHETICAL PROBLEM FOR UNIT TWO—INCLUDING CHAPTERS 8–14 (Answers at the Back of the Book) Doe & Roe is a small small accoun accountin ting g firm firm that that provid provides es bookke bookkeepi eping, ng, payroll payroll,, and tax servic services es for small small  businesses. Java, Inc., is a small manufacturing firm, making and selling commercial espresso machines. 1.

a.

Java sends e-mail to Doe & Roe, offering to contract for Doe & Roe’s services for a certain price. The offer is sent on June 1 and is seen by Doe on June 2. The offer states that it will be open until July 1. This offer cannot cannot be revoke revoked d because because it it is a firm firm offer. offer.

  b. cannot be be revoked revoked because because it is is an option contract. contract. c. could could have have been been revoked revoked only before before Doe saw saw it. it. d. may be revoked revoked any time time before before it is is accepted. accepted. 2.

Java and Doe & Roe discuss terms for a contract, but nothing is put in writing. If a dispute develops later, and one party files a suit against the other, alleging breach of contract, the court will determine whether or not there is a contract between the parties by looking at

a.  b. c. d.

the fairness fairness of the circumstanc circumstances. es. the offeree’s offeree’s subjective subjective intent. intent. the parties’ parties’ objective objective intent. intent. the parties’ parties’ subjective subjective intent. intent.

3.

Java and Doe & Roe sign a written contract for Doe & Roe’s services. The contract includes a large arithmetical error. Java later files a breach breach of contract suit against Doe & Roe, which asserts the mistake mistake as a defense. Doe & Roe will win

a.   b. c. d.

if Java wrote the contract. contract. if the mistake mistake was was unilateral unilateral and Java Java knew it. only if the mistake mistake was due to to Java’s Java’s neglige negligence. nce. only if the the mistake mistake was was mutual. mutual.

4.

Java and Doe & Roe sign a written contract for Doe & Roe’s services. Java later files a breach of contract suit against Doe & Roe. Doe & Roe could avoid liability on the contract if 

a.   b. c. d.

the contract contract has been assigned. assigned. there is an unexecuted unexecuted accord between the parties. Java has been discharged discharged by a novation. novation. none none of the above. above.

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5.

Java and Doe & Roe sign a written contract for Doe & Roe’s services. Java later files a suit against Doe & Roe. Doe & Roe is held to be in breach of contract. The court is most likely to grant relief to Java in the form of 

a.   b. c. d.

dama damage ges. s. specific specific performanc performance. e. damages damages and specific specific performanc performance. e. none none of the above. above.

QUESTIONS ON THE EXTENDED CASE STUDY FOR UNIT TWO—  F RIEZO RIEZO V . F  RIEZO RIEZO

(Answers at the Back of the Book) 1.

A Con Connec nectic ticut ut state state statut statutee provid provides es that that a prenup prenuptia tiall agreem agreement ent is not enforc enforceab eable le if, before before its execution, either party does not receive a “fair and reasonable disclosure” of the other’s property, financial obligations, and income. According to the majority in the Friezo case, this

a.  b. c. d.

includes extraneous factors such such as the timing timing of the disclosure. refers to the nature, extent, extent, and accuracy of the information information disclosed. mandates mandates that that the disclosure disclosure be be exact exact and precise. precise. requires the disclosure of income and assets but not financial financial liabilities. liabilities.

2.

In the Friezo case, with respect to the enforceability of the prenuptial agreement at issue, the majority cited as a significant factor that

a. the prospective husband acknowledged acknowledged in the agreement agreement that he had examined examined it and and understood it.   b. the prospecti prospective ve husban husband d had consider considerabl ablee financ financial ial experi experienc encee and spent spent much much tim timee drafti drafting ng the prenuptial agreement. c. the prospective wife acknowledged in in the agreement that she had examined examined it and understood it. d. the prospective wife wife had little little time to evaluate the agreement and lacked financial experience. experience. 3.

In the Friezo case, with respect to the enforceability of the prenuptial agreement at issue, the dissent cited as a significant factor that

a. the prospective husband acknowledged acknowledged in the agreement agreement that he had examined examined it and and understood it.   b. the prospecti prospective ve husban husband d had consider considerabl ablee financ financial ial experi experienc encee and spent spent much much tim timee drafti drafting ng the prenuptial agreement. c. the prospective wife acknowledged in in the agreement that she had examined examined it and understood it. d. the prospective wife wife had little little time to evaluate the agreement and lacked financial experience. experience.

From book website

An e-contract can e-contract can be defined as: any contract formed between merchants involved in e-commerce, regardless of whether the a. contract is formed online or offline.  b. any contract formed formed electronically, such as over the Internet. c. an electronic contract contract formed between merchants only. d. an electronic contract formed between a merchant merchant and a consumer. status: correct (1.0) correct: b your answer: b feedback: Correct. An e-contract is one that is formed electronically. Typically, the term is used to refer to contracts formed via the Internet. 2 With respect to online offers, an important rule for a seller to keep in mind is that: a. buyers buyers never read online online offers. offers.  b. the offeror controls controls the offer and thus the resulting resulting contract. c. the offeree controls the offer and thus the resulting resulting contract. the full text of an offer should never be displayed online because this will limit the seller's d. ability to change the offer. status: correct (1.0) correct: b your answer: b feedback: Correct. The seller should make sure, when drafting the offer, to include the terms that he or she wants to be contained in the resulting contract. 3 A forum-selection clause indicates: a. the location for the resolution resolution of any dispute arising arising under the contract.  b. the specific court in which arbitration arbitration proceedings will be held. c. which state or nation's laws laws will govern any dispute that arises under the contract. contract. that a force majeure will excuse the parties from showing up at the dispute-resolution forum if  d. a dispute arises under the contract. status: correct (1.0) correct: a your answer: a feedback: Correct. This is what a forum-selection clause indicates. 4 A shrink-wrap agreement is one whose terms are:

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Quiz from class

Question 1

1 out of 1 points The terms in a click-on agreement may be enforced if they are construed as parts of a contract. Sele Select cted ed Answ Answer er:: True True Correct An Answer: True

Question

1 out of 1 points

2

Under federal law, an e-document is as valid as a paper document, without exceptions. Sele Select cted ed Answ Answer er:: Fals Falsee Correct Ans Answer: False Question

1 out of 1 points

3

Integrity Manufacturing, Inc., and Jiffy Delivery Service make a deal ov er the Internet that involves e-documents. Under the E-SIGN Act, for an e-document to be enforceable, it must  be in a form that can be Select Selected ed Answer Answer::

accura accuratel tely y reprod reproduced uced and retain retained. ed.

Corr Correc ectt Answ Answer er::

accur accurat atel ely y repr reprod oduce uced d and and reta retain ined ed..

Question

1 out of 1 points

4

Dina buys from E-Things, Inc., a product that includes a shrink-wrap agreement. A dispute arises, and E-Things files a suit against Dina. The court will enforce the agreement if Dina used the product Select Selected ed Answ Answer: er:

after after having having had an opportu opportunit nity y to to read read the agreem agreement ent..

Correc Correctt Answer Answer::

after after having having had an opportu opportunit nity y to read read the agreem agreement ent..

Question

1 out of 1 points

5 Parties cannot opt out of the UETA. Sele Select cted ed Answ Answer er:: Fals Falsee Correct Ans Answer: False Question 6

1 out of 1 points Eagle Oil Company and Federated Refining, Re fining, Inc., attempt to enter into a contract in electronic form. Under the Electronic Signatures in Global and National Commerce (ESIGN) Act, solely because this contract is in electronic form, it

Sele Select cted ed Answ Answer er::

may may not not be deni denied ed legal legal effe effect ct..

Corr Correc ectt Answ Answer er::

may may not not be deni denied ed lega legall effe effect ct..

Question

1 out of 1 points

7

In e-transactions, attribution refers to procedures that may be used to ensure that a person sending an e-record is the same person whose e-signature accompanies the record. Sele Select cted ed Answ Answer er:: True True Correct An Answer: True Question

1 out of 1 points

8 Under the UETA, a contract solely in electronic form is enforceable. Sele Select cted ed Answ Answer er:: True True Correct An Answer: True Question

0 out of 1 points

9

In Case 14.2, Specht v. Netscape Communications Corp., Corp., the court held that because the  plaintiffs did not expressly assent to the terms of the contract, they Select Selected ed Answ Answer: er:

must must stop stop using using the product product downloa downloaded ded from from the the defe defendan ndant. t.

Corr Correc ectt Answ Answer er::

need need not not subm submit it to arbi arbitr trat atio ion. n.

Question 10

1 out of 1 points A contract, to be enforced, may require the signature of the party against whom enforcement is sought. Sele Select cted ed Answ Answer er:: True True Correct An Answer: True

Question 11

0 out of 1 points Under federal law, an e-signature is as valid as a signature on paper, without exceptions. Sele Select cted ed Answ Answer er:: True True Correct Answer: False

Question 12

1 out of 1 points First Design Corporation, a business firm, and Gary, a consumer, make a deal over the Internet that involves e-signatures. Under the E-SIGN Act, for the e-signatures to be

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UNIT TWO: CONTRACTS

enforceable Select Selected ed Answer Answer::

both both partie partiess must must have agreed agreed to use e-sign e-signatu atures res..

Corr Correc ectt Ans Answe wer: r:

both both par parti ties es must must have have agre agreed ed to use use e-s e-sig igna natu ture res. s.

Question 13

0 out of 1 points Select Food Company and Tasty Goods, Inc., enter into a contract that the UETA covers. The UETA covers issues relating to Selected Answer:

contract formation only.

Corr Correc ectt Answ Answer er::

neit neither her agenc agency y nor nor cont contra ract ct form format atio ion. n.

Question 14

1 out of 1 points  National Shipping Corporation and Office Software Company (OSC) make a deal for  OSCs products, communicating entirely online. Under the UETA, an electronic record is considered sent Selected Answer:

when it leaves the sender's control or comes into the recipient's control.

Correc Correctt Answ Answer: er:

when when it it leaves leaves the sender sender's 's contro controll or or comes comes into into the the recipi recipient ent's 's control.

Question 15

0 out of 1 points The UETA requires that an agreement to conduct a transaction electronically be made electronically. electronically. Sele Select cted ed Answ Answer er:: True True Correct Answer: False

Question 16

1 out of 1 points A shrink-wrap agreement is normally enforceable. Sele Select cted ed Answ Answer er:: True True Correct An Answer: True

Question 17

1 out of 1 points The UETA requires the use of security procedures to verify changes to e-documents. Sele Select cted ed Answ Answer er:: Fals Falsee

Correct Answer:

False

Question 18

1 out of 1 points All of the terms presented in shrink-wrap agreements have been enforced. Sele Select cted ed Answ Answer er:: Fals Falsee Correct Answer: False

Question 19

1 out of 1 points Under the UETA, a signature may be b e denied legal effect solely because it is in electronic form. Sele Select cted ed Answ Answer er:: Fals Falsee Correct Answer: False

Question 20

1 out of 1 points Applications Corporation (AC) sends an electronic record to Best Systems, Inc., an AC customer. Under the UETA, the record will be considered received when it Selected Answer:

enters Best's processing system in a readable form, even if no person is aware of its receipt.

Correct Answer:

enters Best's processing system in a readable form, even if no person is aware of its receipt.

E-Contracts Top of Form

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instructor

Quiz Results for

Quiz Results for B

Your Full Name: Your Email Address: (required) The Email address of an instructor to mail your quiz results to: 1. An e-contract can be defined as: a. any contract formed between merchants involved in e-commerce, regardless of whether the contract is formed online or offline. b. any contract formed electronically, such as over the Internet.

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c. an electronic contract formed between merchants only. d. an electronic contract formed between a merchant and a consumer. 2. With respect to online offers, an important rule for a seller to keep in mind is that: a. buyers never read online offers. b. the offeror controls the offer and thus the resulting contract. c. the offeree controls the offer a nd thus the resulting contract. d. the full text of an offer should never be displayed online because this will limit the seller's ability to change the offer. 3. A forum-selection clause indicates: a. the location for the resolution of any dispute arising under the contract. b. the specific court in which arbitration proceedings will be held. c. which state or nation's laws will govern any dispute that arises under the contract. d. that a force majeure will excuse the parties from showing up at the dispute-resolution forum if a dispute arises under the contract. 4. Typically, an online offer provides that to accept the offer, the offeree must: a. sign the offer and return it to the offeror. b. call the offeror and accept the offer by phone. c. agree to arbitrate any dispute arising under the contract in a court located in the offeror's state. d. click on an "I agree" or "I accept" icon or box on the computer screen. 5. A shrink-wrap agreement is one whose terms are: a. disclosed on the outside of a shrink-wrapped product so that the buyer can review them before purchasing the product. b. typically favorable to the buyer so that the seller does not have to contend with returned, unwrapped packages. c. found inside a box in which the goods are packaged. d. an agreement wrapped in a plastic substance. 6. In most cases, the parties to a shrink-wrap agreement are: a. a manufacturer and a retailer. b. a retailer and a consumer who purchases the shrink-wrapped product. c. a consumer and another consumer. d. a manufacturer and the ultimate buyer-user of the shrink-wrapped product. 7. The courts have enforced shrink-wrap agreements: a. in many cases. b. in no cases.

c. in all cases. d. only in a few cases. 8. If a court finds that a buyer learned of the shrink-wrap terms after the parties entered into a contract, the court might conclude that the terms were proposals for additional terms that: a. automatically became part of the contract. b. automatically made the contract void. c. were not part of the contract unless the seller expressly agreed to them. d. were not part of the contract unless the buyer expressly agreed to them. 9. With respect to the enforceability of terms in shrink-wrap agreements, one important consideration is: a. whether the buyer learned of the shrink-wrap terms before or after the parties entered into a contract. b. whether the buyer really wanted to purchase the shrink-wrapped product. c. the overall quality of the shrink-wrapped product. d. the durability of the shrink-wrapped product. 10. The issue in the case of Klocek of Klocek v. Gateway, Inc., Inc., had to do with the enforceability of: a. a forum-selection clause in a shrink-wrap agreement. b. an arbitration clause in a shrink-wrap agreement. c. a click-on agreement. d. a browse-wrap term. 11. "Click-on" agreements, which arise when parties click Web site boxes stating "I agree" or "I accept" with respect to the terms of an online offer, are: a. never enforceable, regardless of the circumstances. b. always enforceable, regardless of the circumstances. circumstances. c. enforceable, depending on the circumstances. d. enforceable, but only if the buyers agree to their enforceability. 12. In the case of Caspi of Caspi v. Microsoft Network, LLC , the issue concerned: a. whether an arbitration clause in a click-on agreement was enforceable. b. whether a forum-selection clause contained in a click-on agreement became part of the parties' contract. c. whether a browse-wrap term in a contract to purchase a computer was enforceable. d. whether Microsoft had violated antitrust la ws. 13. The difference between browse-wrap terms and terms in a click-on agreement is that browse-wrap terms: a. do not require an Internet user to assent to the terms before downloading or using certain software. b. require an Internet user to assent to the terms before downloading or using certain

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software. c. are found only in shrink-wrap agreements whereas click-on agreements are always formed online. d. are not found in shrink-wrap agreements, unlike click-on terms, which are always found in shrink-wrap agreements. 14. The case of Specht of Specht v. Netscape Communications Corp. involved which of the following issues? a. The enforceability of a shrink-wrap agreement. b. The enforceability of an arbitration clause in a browse-wrap agreement. c. The enforceability of a forum-selection clause in a click-on agreement. d. The enforceability of an online offer. 15. Providing links on one's Web site to others' Web pages: a. is always illegal. b. is legal, but only with the permission of the owners of the linked sites. c. is legal and does not require permission. d. is avoided by most online businesses to prevent lawsuits for trademark infringement. 16. E-signature technologies do not include not include which of the following? a. Digital signatures. b. Signature dynamics. c. Symmetric cryptosystems. cryptosystems. d. Smart cards. 17. It can generally be said that: a. most states have laws governing e-signatures. b. only a few states have laws governing e-signatures. c. the only law governing e-signatures in the United States today is the federal E-SIGN Act of 2000. d. no state has a law governing e-signatures. 18. The federal Electronic Signatures in Global and National Commerce Act (E-SIGN Act) of 2000 provides that: a. the act applies to all documents requiring signatures. b. only agreements governed by the Uniform Commercial Code (UCC) fall under the a ct. c. the act is a uniform law that must be adopted by the states before it becomes effective. d. no contract, record, or signature may be "denied legal effect" solely because it is in electronic form. 19. A partnering agreement is one in which: a. a seller and a buyer who frequently do business with each other agree in advance on the terms and conditions that will apply to all transactions. b. a seller and a buyer who frequently do business with each other agree to do business

together solely in the online e nvironment. c. two or more persons agree to establish a partnership form of business. d. two or more persons agree to use e-signatures. 20. Article 2 of the Uniform Commercial Code (UCC) could not be applied to most transactions involving software because, among other things: a. software is a "good," and the sale of goods is not covered by Article 2 of the UCC. b. software is not "tangible property" and thus is not covered by Article 2 of the UCC. c. software falls within the category of "real property" and thus is not covered by Article 2 of the UCC. d. the "sale" of software generally involves the passage of title from the seller to the buyer, a topic not addressed by the UCC. 21. The Uniform Computer Information Transactions Act (UCITA) was drafted and proposed to the states for adoption by the: a. National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Trial Lawyers Association (ATLA). b. NCCUSL and the American Law Institute (ALI). c. ATLA and the ALI. d. NCCUSL and the American Association of Independent Attorneys (AAIA). 22. The UCITA establishes a comprehensive set of rules covering: a. contracts involving arbitration clauses. b. contracts involving bulk sales. c. contracts involving computer information. d. contracts involving consumers who purchase tangible goods from online auctions. 23. The UCITA generally provides that if the primary subject matter of a contract deals with computer and information rights: a. the act applies to only that part of the transaction involving computer and information rights. b. the act applies to the entire transaction. c. the act applies only to the seller (licensor) of the computer and information rights. d. the act applies only to the buyer (licensee) of the computer and information rights. 24. With respect to warranties, the UCITA: a. provides for basically the same warranties as provided for in UCC Article 2. b. does not deal with warranties. c. provides for express warranties but not implied warranties. d. provides for warranties but not with respect to mass-market licenses. 25. The Uniform Electronic Transactions Act (UETA) is:

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a. the name of the preliminary draft of the UCITA. b. the name of the final proposed draft of the UCITA. c. a uniform law proposed by the NCCUSL to support the enforcement of e-contracts. d. a uniform law proposed by the ALI to amend UCC Article 2 to include provisions relating to e-contracts. Subm Submit your answ ers Bottom of Form