Week 4 assignment Business law.

In Chapter 8, we pointed out that promises and agree- ments, and the knowledge that some of those promises and agreements will be legally enforced, are essential to civi- lized society. The homes we live in, the food we eat, the clothes we wear, and the cars we driveall of these have been pur- chased through implicit or explicit contractual agreements. Contract law developed overtime, through the common law tradition, to meet society's need to know with certainty what kinds of promises, or contracts, will be enforced and the point at which a valid and binding contract is formed. For a contract to be valid and enforceable, the requirements listed in Chapter 8 must be met. In this chapter1 we look closely at the rst of these requirements, agreement. Agreement is required to form a contract, regardless ofwhether it is formed in the traditional way by exchanging paper documents or created online by exchanging electronic messages or documents, as many contracts are formed today. We discuss online offers and acceptances and examine some laws that have been created to apply to electronic contracts, or e-contracts, in the latter part of the chapter. Can a series of e-mails bind Amazoncom to a contract? You will see what the court had to say when you read this chapter's Spotlight Case. Agreement An essential element for contract formation is agreement the parties must agree on the terms of the contract. Ordi- narily, agreement is evidenced by two events: an offer and an acceptance. One party offers a certain bargain to another party, who then accepts that bargain. or impliedly authorized normally is not effective until it is received by the offeror. When an offeror species how acoeptance should be made, such as by ovemight delivery, the contract is not formed unless the offeree uses that mode of acceptance. Both the offeror and the offeree are bound in contract the moment the specied meansof acceptance isemployed. I EXAM!!! 9.15 Motorola Mobility, Inc, offers to sell 144 Atrix 4G smartphones and 72 Lapdocks to Call Me Plus phone stores. The offer states that Call Me Plus must accept the offer via FedEx overnight delivery. The acceptance is effective (and a binding contract is formed) the moment that Call Me Plus gives the overnight envelope containing the acceptance to the FedEx driver. 0 If the offeror does not expressly authorize a certain mode of acceptance, then acceptance can be made by any reason- able means. '0 Courts look at the prevailing business usages and the surrounding circumstances to determine whether the mode of acceptance used was reasonable. Usually, the offer- or's choice of a particular means in making the offer implies that the offeree can use the some or nfaster means for accep- tance. If the offer is made via Priority U.S. mail, for example, it would be reasonable to accept the offer via Priority mail or by a faster method, such as e-mail, fax, or overnight delivery. Subslihlle Method ofAcceptance If the of feror authorizes a particular method of acceptance, but the offeree accepts by a different means, the acceptance may still be effective if the substituted method serves the same purpose as the rather than the passage of title (ownership rights) from theL seller to the buyer. 0 m9.\" Karen downloads an app on her iPad Air that enables her to work on spreadsheets. During the transaction, she has to click on several on-screen \"I agree\" boxes to indicate that she understands that she is purchasing only the right to use the app and will not obtain any ownership rights. After she agrees to these terms (the licensing agreement), she can download the app. 0 As you read through the following subsections, keep in mind that although we typically refer to the offeror and the offeree as a seller and a buyer: in many online transactions these parties would be more accurately described as a licensor and a licensee. Online Offers Sellers doing business via the internet can protect themselves against contract disputes and legal liability by creating offers that clearly spell out the terms that will govern their transac- tions if the offers are accepted. All important terms should be conspicuous and easy to view Displaying the Offer The seller's Web site should include a hypertext link to a page containing the full contract so that potential buyers are made aware of the terms to which they are assenting. The contract generally must be displayed online in a readable format such as in a twelve-point typeface. All provisions should be reasonably clear. authorized means. The use of a substitute method of accep- tance is not effective on dispatch, though, and no contract will be formed until the acceptance is received by the offeror. Thus, if an offer specifies FedEx overnight delivery but the offeree accepts by overnight delivery from another carrier, such as UPS, the acceptance will still be effective, but not until the offeror receives it. Agreement and E-Contracts Many contracts are formed online. Electronic contracts, or e-contracts, must meet the same basic requirements (agree- ment, consideration, contractual capacity, and legality) as paper contracts. Disputes concerning e-contracts, however, tend to center on contract terms and whether the parties vol- untarily agreed to those terms. Online contracts may be formed not only for the sale of goods and services but also for licensing. The \"sale" of software generally involves a license, or a right to use the software, 10. Note that UCC 22OOH Ho} states specifically that on acceptance of on offer for The sole of goods con be mode by any medium that is reosoncble under the circumstances, 0 was 9.17 Netquip sells a variety of heavy equipE ment, such as trucks and trailers, online at its Web site. Because Netquip's pricing schedule is very complex, the schedule must be fully provided and explained on the Web site. in addition, the terms of the sale (such as any warranties and the refund policy) must be fully disclosed. 0 Provisions to Include An important rule to keep in mind is that the offeror (seller) controls the offer and thus the resulting contract. The seller should therefore anticipate the terms she or he wants to include in a contract and provide for them in the offer. In some instances, a standardized con- tract form may sufce. At a minimum, an online offer should include the following provisions: 1. Acceptance of terms. A clause that clearly indicates what constitutes the buyer's agreementto the terms of the offer, such as a box containing the words \"I accept" that the buyer can click on to indicate acceptance. (Mechanisms for accepting online offers will be discussed later in this chapter.) 2. Payment. A provision specifying how payment for the goods (including any applicable taxes) must be made. THE VALIDITY OF E-SIGNATURES ON 7r AGREEMENTS WITH ONIJNE COLLEGES AND UNIVERSITIES " The number of online institutions offering bachelor's, master's, and even doctoral degrees has grown dramatically in recent years. Enrollment for these online colleges and universities is concluded online. Most, if not all, of these schools ask enrolling students to agree that any disputes will be solved by arbitration. How valid are these enrollment agreements when the students simply indicate their assent via electronic signatures, or esignatures? Two Students Clo'lnod That E-Signaium Were Involid One student, Soott Rosendohl, alleged that online Ashford Univer- sity's enrollment adviser claimed that Ashford offered one of the cheapest undergraduate degree programs in the country. In fact, it did not. Another student, Veronica Clarke, enrolled in the doctor of psychology progra'n at the online University of the Rockies. She alleged that its enrollment adviser told her that the doctor of psychology program would cpalify her to become a clinioal psy- chologist in the US. military, but that statement was false. Rosendahl and Clarke sued their respective universities for violation of unfair competition laws and False advertising laws, fraud, and negligent misrepresentation. These students claimed that their esignatures were invalid. The Online Universities Argued for Arbitration The universities pointed out that each student had electronically assented to the enrollment agreement, which clearly required that all disputes be arbitrated. Each agreement stated, \"Such arbitra tion shall be the sole remedy for the resolution of any dispute or controversies between the parties to this agreement." One issue was whether the e-signatures on the agreement were valid. Each application form had an "acknowledgment and signature\" paragraph that stated, \"My signature on this application certifies that I have read, understood, and agreed to my rights and responsibilities as set forth in this application." Both students had to -on an electronic box acknowledg- ing that they had read the agreement and consented to it. When they diCked on the box, the phrase "Signed by E-Signature" appeared on the signature line. The Court Ruled in Favor of the Onlino Urivorsiliu The universities submitted copies of Rosendahl's and Clarke's online application forms to the court. Both terms contained the arbi- tration agreement and were signed with esignatures. Rosendahl and Clarke provided no proof that they had not consented to the enrollment agreements. Thus, the court held that the online univer sities had proved the existence of valid arbitration agreements.'I Critical Think'ng Would the fact that the arbitration agreements were valid have prevented Rosendahi and Clarke from pursuing their claims for negligent misrepresentation and fraud? Why or why not? a. Rasendahl v. Bridgepdnt Education, inc., 2012 VVl. 667049 {S.D.Cal. 2012;. (such as a court or jurisdiction), for the resolution of any dispute arising under the contract. As discussed in Chapter 2, significant jurisdictional issues may occur when parties are at a great distance, as they often are when they form contracts via the Internet. A forum-selection clause will help to avert future jurisdictional problems and also help to ensure that the seller will not be required to appear in court in a distant state. Choice-oflaw Clause Some online contracts may also include a choice-of-law clausethat is, specifying that any dispute arising out of the contract will be settled in accor- dance with the law of a particular jurisdiction, such as a state or country. Choice-of-law clauses are particularly com- mon in international contracts, but they may also appear in e-contracts to specify which states laws will govern in the United States. Onljne Acceptances The Restatement (Second) of Contractsa compilation of com- mon law contract principlesstates that parties may agree to a contract \"by written or spoken words or by other action or by failure to act."11 The Uniform Commercial Code (UCC), which governs sales contracts, has a similar provision. Sec- tion 2204 of the UCC states that any contract for the sale of goods "may be made in any manner sufficient to show agree- ment, including conduct by both parties which recognizes agrees to abide by the terms of the limited license agreemen 0 M9.\" Aria] orders a new iMac from Big Do K Electronics, which ships it to her. Along with the Mac, the box contains an agreement setting forth the terms of the sale. including what remedies are available. The document also states that Arial's retention of the iMac for longer than thirty days will be construed as an acceptance of the terms. 0 In most instances, a shrink-wrap agreement is not between a retailer and a buyer, but between the manufacturer and the ultimate buyer-user. The terms generally concern warran- ties, remedies, and other issues associated with the use of the product. Shrink-Wrap Agreements and Enforoeoble Contract Terms In some cases, courts have enforced the terms of shrink-wrap agreements in the same way as the terms of other contracts. These courts have reasoned that by includ- ing the terms with the product, the seller proposed a contract that the buyer could accept by using the product after hav- ing an opportunity to read the terms. Thus, a buyers failure to object to terms contained within a shrink-wrapped soft- ware package may constitute an acceptance of the terms by conduct Shrink-Wrap Terms Thom/lay NotBe Enforced Sometimes, however, courts have refused to enforce certain terms in shrink-wrap agreements because the buyer did not expressly l2. at-0% Focebook, .'nc, 84] F.5upp_2d 829 |S.D_N_Y_ 2012}. Read the section of Chapter 9 about Click-on Agreements and Shrink-Wrap Agreements along with Case Example 9.18 on page 174 of the textbook. Have you yourself ever read any on these types of agreements before clicking on the "I agree" tab? Do you think anyone reads these agreements? Isn't part of the rationale for including onerous terms the realization that no one would be likely to review them? Is it fair or reasonable to hold people to contractual provisions such as the forum agreement on Facebook to resolve all issues with Facebook in Santa Clara, California? What are your thoughts? What would be a reasonable and workable alternative? + - V ber 9 CHAPTER Agreement in Traditional and E-Contracts LEARNING OBJECTIVES The five Learning Objectives below are designed to help improve your understanding of the chapter. After reading this chapter, you should be able to answer the following questions: 1 What elements are necessary for an effective offer? What are some examples of nonoffers? 2 In what circumstances will an offer be irrevocable? 3 What are the elements that are necessary for an effective acceptance? 4 How do shrink-wrap and click-on agreements differ from other contracts? How have traditional laws been applied to these agreements? 5 What is the Uniform Electronic Transactions Act? What are some of the major provisions of this act? tock.com)