Interactive Activity LAW402

Identify one issue from the weekly reading and create a Legal Issue Brief.

Your brief should be no more than one page and follow the format below:

Shrinkwrap, Clickwrap and
Browsewrap Contracts & Electronic
Signatures
LAW 402: LAW OF E-COMMERCE
UPON COMPLETION OF THIS WEEK’S
ASSIGNMENTS, YOU WILL BE ABLE TO:
•Explain the validity and enforceability of clinkwrap, shrinkwrap and
browsewrap contracts.
•Discuss characteristics of the acceptance of license agreements that
are particular to electronic media.
•Summarize the functions of a signature in legal agreements.
•Discuss the issues that are unique to signatures and electronic
agreements.
SHRINKWRAP, CLICKWRAP AND
BROWSEWRAP CONTRACTS
Online contracts are, more likely than not, entered into
without paper and pen, and without spoken word.
As a result, shrinkwrap, clickwrap and browsewrap cases
arise when articles of disagreement occur over terms
incorporated into these types of transactions.
SHRINKWRAP
Shrinkwrap contracts derive their name from the clear plastic wrapping that
encloses goods.
• Include a notice saying that by opening the shrinkwrap, the purchaser
agrees to the terms and conditions enclosed.
• Typically include provisions such as an arbitration clause, a choice of law and
forum clause, disclaimers, limits of warranties and limitations of remedies.
Major Criticism: the consumer will be bound by terms and conditions unknown
at the time the contract is entered into (the time of which the package is
opened).
CLICKWRAP
Clickwrap agreements include terms and conditions in an online
contract formed on the internet.
• the user assents to a list of terms by clicking an onscreen button
marked, ‘I Agree’ or ‘I accept’.
• Advantage: user can read the terms and conditions before
assenting and the vendor can dictate the number of steps for the
user to pass through before reaching the assent stage.
ENFORCEABILITY OF CLINKWRAP
AGREEMENTS
•Note: unless expressing consent is extended to include clicking on a
computer screen, uncertainty can exist as a barrier that prevents
stability
•Once a customer clicks “I Accept” it can likely satisfy the
requirement of showing acceptance and therefore it is acceptable in
most cases as long as all of the contract details are supplied to the
customer before clicking on “I Accept”
BROWSEWRAP
Browsewrap agreement refers to the situation where a user enters
into an agreement without giving explicit consent to the terms and
conditions.
Example: a vendor of software to be downloaded may gives the user an
opportunity to browse the terms but has not made access to the product
conditional on reading the available terms and conditions. Vender instead places
a link to the “terms of download” on the download page and leaves the viewing
of the documents optional.
ELECTRONIC AGENT
Purpose: Preprogrammed computer programs established to find
information, make contracts and interact with computers of other
parties without the need for human interaction.
• An electronic offer and acceptance can be done automatically
Electronic agents operate transactions formed by electronic
messages when the messages of one or both of the parties will not
be reviewed by an individual as a step of contract formation.
FOUR REASONS TO PROMPT SIGNATURE REQUREMENTS
PER THE UNITED NATIONS COMMISSION ON INTERNET
TRADE LAW (UNCITRAL)
1. To reduce disputes
2. To make the parties aware of consequence of the deal
3. To provide evidence for third parties to rely upon
4. To facilitate tax, accounting and regulatory purposes
‘ELECTRONIC SIGNATURE’ DEfiNED
Any means of electronic authentication of the identity of a
person and of the intent of that person to indicate approval
or to associated with an electronic record.
SECURITY OF ELECTRONIC
SIGNATURE
Purpose: used to sign any electronic document or
record, with the same intention and for the same
purpose as a traditional signature on a paper record
or document.
SECURITY OF ELECTRONIC SIGNATURE
•Digitized signatures: handwritten signature that is scanned into a computer and
then placed electronically into an electronic document.
•Digital signatures: a subset of the electronic signature attached to specific data,
such as an email, computer file or web page.
•Standard encryption requires private encryption meaning that the sender and
the recipient of a message know and use the same secret code.
•The level of security available for an electronic signature is regarded as
impossible to duplicate.
SECURE SOCKET LAYER – TRANSPORT
LAYER SECURITY
Technology Purpose (SSL): to ensure that information stored in
electronic form or transmitted over networks is not accessible to any
person not authorized to view that information.
Transport Layer Security (TLS): is a security protocol ensuring privacy
between communicating applications and their users on the internet.
TLS ensures that a third party cannot interfere with or read a
message.
SSL AND TSL
•SSL and TLS both use a form of digital signature technology.
•SSL and TLS provide endpoint authentication and communications privacy using
cryptography.
•SSL and TLS protocols exchange records.
• records can be compressed, encrypted and packed with a message
authentication code.
• users to securely provide personal details to sites employing the
protocol.
•Client and server negotiate a ‘master secret’.
• key data is calculated from the ‘master secret’
APPLICATIONS
•SSL and TLS commonly found with hypertext
transfer protocol (HTTP/HTTPS)
•HTTPS is used to secure World Wide Web pages
for applications
•Uses public key certificates to verify and
identify endpoints
AUTHENTICATING ELECTRONIC
MESSAGES
•Messages and records must be authenticated for use as evidence
•Determining who signed a document is crucial for fixing liability
•Lack of prior identification raises legal and commercial issues when it comes to
verification
•Alteration or forgery of computer records is even harder to detect
•Most common form of authentication is a manual signature
•Passwords are common for authentication of electronic messages