Business Law Final Chpt 11

Terms

(expressed or implied) identification of the parties, object or subject matter of the contract, consideration to be paid, time of payment, delivery or performance.

Destruction of the Subject Matter

, before acceptance of offer, terminates the offer.

Contract must contain:

1. the identification of the parties 2. the identification of the object or subject matter of the contract (also the quantity, when appropriate), including the work to be performed, with specific identification of such items as goods, services, and land. 3. The consideration to be paid. 4. The time of payment, delivery, or performance.

C

A clause in an online contract that specifies that any dispute arising out of the contract will be settled in accordance with the law of a particular jurisdiction is called a: a. forum-selection clause. b. click-on agreement clause. c. choice-of-law clause. d. shrinkwrap agreement.

b

A forum-selection clause in an online contract indicates: a. what constitutes the buyer's agreement to the terms of the offer. b. the location in which contract disputes will be resolved. c. how payment for the goods must be made. d. the remedies available to the buyer if the goods are found to be defective.

A

A forum-selection clause indicates the place for the resolution of a dispute arising under a contract. a. True b. False

d

A major goal of the United Nations Convention on the Use of Electronic Communications in International Contracts was to: a. place more emphasis on business-to-business commerce in online venues. b. provide that e-signatures would be treated differently than signatures on paper documents. c. improve commercial certainty by determining an Internet user's location for legal purposes. d. All of these choices.

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 subsequently conducted electronically. They have entered into a(n): a. partnering agreement. b. shrink-wrap agreement. c. browse-wrap agreement. d. partnership.

b

A statement indicating how an online seller will use information gathered about the buyer is called a(n): a. limitation on remedies provision. b. privacy policy. c. disclaimer of liability. d. return policy.

Provisions to Include in an Online Offer

Acceptance of Terms: what constitutes an acceptance. Payment: how payment is made. Return Policy. Disclaimer: of liability for certain uses of the goods.

C

Acceptance takes effect, thus completing formation of the contract, at the time the offeree sends or delivers the communication via the mode expressly or impliedly authorized by the offeror. This is the: a. post office rule. b. post rule. c. mailbox rule. d. mail rule.

A

An acceptance subject to new conditions implicitly rejects the offer. a. True b. False

B

An advertisement—"this property for sale"—is an offer. a. True b. False

C

An electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record is called a(n): a. shrink-wrap agreement. b. browse-wrap term. c. e-signature. d. click-on license.

B

An expression of opinion—"your customers will like this"—is an offer. a. True b. False

d

An offer can be terminated by operation of law through: a. lapse of time. b. destruction of the specific subject matter of the offer. c. supervening illegality of the proposed contract. d. All of these choices.

Bilateral Contract

Communication of acceptance is necessary because of mutual exchange of promises. not necessary if offer does not require. Acceptance is timely if made before offer is terminated.

Shrink-Wrap Agreements

Contract terms are inside the box. Party opening box agree to terms by keeping merchandise. Enforceable vs. Unenforceable Terms

B

Deb buys a song through eSongs, an online music vendor. Before completing the purchase and downloading the song, Deb must agree to a provision not to make and sell copies of the song. This provision is a. a choice-of-law clause. b. a click-on agreement. c. a browse-wrap term. d. a shrink-wrap agreement.

D

Electronic contracts: a. need not meet the same basic requirements as paper contracts. b. must meet most of the same basic requirements as paper contracts. c. have completely different requirements as paper contracts. d. must meet the same basic requirements as paper contracts.

Authorized means of acceptance

For the mailbox rule. offer specifies (expressly or impliedly) how acceptance should be made. No acceptance if authorized means is not used.

Dispute Settlement Provisions

Forum-Selection Clause: Location or jurisdiction where disputes will be resolved. Choice-of-Law Clause: disputes will be settled in accordance with law of particular jurisdiction

a

In the case of Lucy v. Zehmer, the court considered whether an offer made "after a few drinks" met the: a. serious-intent requirement. b. subjective-intent requirement. c. serious-offer requirement. d. None of these choices.

C

Interstate Coffee Brokers, Inc. (ICBI), offers to sell Java Roasters, Inc., fifty bags of coffee beans. Java rejects the offer. The offer is a. valid for a reasonable time to give Java a "second chance." b. valid until ICBI revokes the offer. c. terminated. d. valid for the period of time prescribed by a state statute.

Provisions to Include in an Online Offer

Limitations on Remedies: if goods defective or contract is breached. Privacy policy. Dispute Resolution: usually arbitration or forum-selection clauses.

C

Nate tells Opal, "I might sell the skis that I bought last fall since I haven't used them and the skiing season is almost over." This is a. an acceptance of an offer. b. an invitation to accept an offer. c. a statement of future intent. d. an offer.

C

Royal Properties, Inc., mails a flyer to hundreds of firms, advertising a building for sale. Standard Manufacturing Company responds by saying, "We accept your offer." Between Royal and Standard, there is a. a contract for the sale of the building. b. a contract to negotiate a sale of the building. c. no contract. d. a contract to consider the offer before any others

protocols

Sellers and buyers agree as to ... to create online agreements. useful for electronic inventory (just in time) ordering of parts and supplies.

Offeror

The ... must have a serious intention to become bound by the offer. The terms of the offer must be reasonably certain, or definite, so that the parties and the court can ascertain the terms of the contract. The offer must be communicated to the offeree.

A

The Uniform Electronic Transactions Act (UETA): a. establishes that records, signatures, and contracts may not be denied enforceability solely due to their electronic terms. b. applies to all electronic writings and signatures. c. creates entirely new rules for electronic contracts. d. applies to wills and testamentary trusts as well as electronic contracts.

b

The federal E-SIGN Act: a. always preempts the UETA, since it is a federal law. b. does not refer explicitly to the UETA. c. allows states to enact alternative requirements for the use of electronic records or electronic signatures. d. governs if a state enacts the UETA with modifications and the modifications are consistent with the E-SIGN Act

C

The offeror's act of withdrawing an offer is known as: a. an option to revoke. b. irrevocation. c. revocation. d. None of these choices.

B

The primary purpose of the Uniform Electronic Transactions Act (UETA) is to: a. reduce the likelihood that disputes will arise in e-Contracts. b. remove barriers to e-commerce by giving the same legal effect to electronic records and signatures as is currently given to paper records and signatures. c. provide an economic advantage to electronic merchants over traditional brick-and-mortar merchants. d. remove all the risks involves with doing business online

C

Today, much of the e-commerce conducted on a worldwide basis involves buyers and sellers from: a. China. b. the European Union. c. the United States. d. South America.

B

Under Section 15 of the UETA, an electronic record is considered sent when it: a. enters the recipient's processing system in a readable form. b. is properly directed to the intended recipient in a form readable by the recipient's computer system. c. has been read by the recipient. d. has been replied to by the recipient.

A

Under federal law, an electronic signature can be as valid as a signature on paper. a. True b. False

B

Under the common law, all of the following elements are necessary for an offer to be effective except : a. the offer must be communicated both verbally and in writing. b. the offeror must have a serious intention to become bound by the offer. c. the offer must be communicated to the offeree. d. the terms of the offer must be reasonably certain.

B

Under the modern view, agreements to agree to the material terms of a contract at some future date: a. are not enforceable contracts. b. may be enforceable agreements (contracts) if it is clear that the parties intend to be bound by the agreements. c. are enforceable contracts. d. None of these choices

With modifications

When the UETA is enacted ... the state law governs if the state's procedures or requirements are consistent with the E-Sign Act. The state does not give priority to one type of technology, the state law was enacted after the E-SIGN act and refers to it. OR The E-SIGN governs if the ... are inconsistent with the E-SIGN act.

Without modifications

When the UETA is enacted .... then the state law governs.

Offer

a promise or commitment to do or refrain from doing some specified action in the future.

Partnering Agreement

a seller and buyer who frequently do business with each other agree in advance on the terms and conditions that will apply to all transactions subsequently conducted electronically.

Mailbox Rule

acceptance is effective when offeree uses authorized means of acceptance. If US Mail, acceptance upon dispatch. Does not apply to instantaneous communications.

Unilateral Contract

acceptance is evident, notification not necessary

Term

an offer can require specific ... to make the contract definite. A court can supply missing ... if the parties intend to form a contract.

Termination of the offer

an offer may be this prior to acceptance by either action of the parties or operation of law.

Mirror Image Rule

at common law, it requires the offeree's acceptance to match the offeror's offer exactly. any change in terms automatically terminates the offer and substitutes the counteroffer.

Counteroffer

by the offer = rejection of original offer and the simultaneous making of a new offer. mirror image rule.

Offeror's Serious Intention

contract is judged by what a reasonable person in the Offeree's position would conclude about the offer... in the case Lucy v. Zehmer.

Click-On Agreements

courts have concluded a binding contract can be formed by clicking on a box indicating "I Accept" or "I Agree." Contract can be formed via website or software. Law does not require parties read all the terms.

E-Mailbox rules

dispatched when leaves control of sender, received when enters recipient's processing system (even if unaware).

Online offers

displaying the offer. seller's website should include hyperlink to page with full contract. provisions to include: Acceptance of Terms, Payment, Return Policy, Disclaimer, Limitations on Remedies, Privacy Policy, and Dispute Resolution.

UETA

does not apply to wills or testamentary trusts. Does not apply unless each party has previously agreed to conduct electronic transactions. Can be implied by conduct and prior dealings.

UETA

does not create new rules, but rather enforces "real world" rules on electronic contracts. Only applies to e-records and e-signatures relating to "transaction"

E-Contracts

electronic contracts, must meet the same basic requirements (agreement, consideration, contractual capacity and legality) as paper contracts. These tend to center on contract terms and whether the parties voluntarily agreed to those terms.

E-Signature

electronic sound, symbol or process... associated with a record and ... adopted by a person with intent to sign the record.

E-signature

electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

E-SIGN

explicitly refers to UETA and provides that ... is pre-empted by state passing of UETA. But state law must conform to minimum ... procedures.

Substitute Method of Acceptance

for the Mailbox rule. effective if the substitute serves the same purpose. (fed-ex vs. Ups) Not effective on dispatch. Effective when received by the offeror.

E-SIGN

gives e-signatures and e-documents legal force. For an e-signature to be enforceable the contracting parties must have agreed to the use of electronic signatures. this does not apply to all documents. Ex. Court documents, divorce decrees, pre-nuptials, and wills.

Digitized Signature

graphical image of a handwritten signature

Exceptions to Mailbox Rule

if acceptance is not properly dispatched by offeree, if offer specifies that acceptance will not be effective until it is received, if acceptance is sent after rejection, whichever is received first is given effect.

Attributed

if electronic record or signature is an act of a particular person, the record or signature is .... to that person. However, state law governs issues of agency, authority, forgery, contract formulation.

Rejection by the offeree

if the offeree rejects the offer-by words or by contract- the offer is terminated. Effective only when it is received by the offeror or offeror's agent.

Choice-of-Law Clause

in which the parties specify that any disputes will be settled in accordance with law of particular jurisdiction.

Record

information that is inscribed on a tangible medium or stored in electronic or other medium that is retrievable in visual form.

Transaction

interaction between two people relating to business, commercial or government activities.

Restatement (second) of Contracts

is a compilation of common law contract principles, states that parties may agree to a contract "by written or spoken words or by other action or by failure to act."

Expressions of opinions

it is not an offer. it does not indicate an intention to enter into a binding agreement. Ex. When someone tells you that you will probably heal, they are not offering that they are actually going to heal you. You cannot hold them responsible if it doesnt work out how you wanted it to.

Cybernotary

legally recognized certification authority, issues the key pair, identifies the owners of the keys, and certifies the validity of the public key.

Supervening Illegality ...

legislation or court decision automatically terminates offer or renders contracts unenforceable. Sometimes if the statute is enacted after someone accepts the offer, a valid contract is formed, but the contract may still be unenforceable.

Browse-Wrap Terms

like click-on agreements, these can occur in transactions over internet. Unlike click-on, terms do not require assent and are usually unenforceable.

Forum-Selection Clause

location or jurisdiction where disputes will be resolved

Silence

may be an acceptance when an offeree takes the benefit of offered services even though he or she had an opportunity to reject them and knew that they were offered with the expectation of compensation.

State law

must conform to minimum E-SIGN procedures

Revocation

of the offer by the offeror is when offer can be withdraw anytime before offeree accepts the offer. effective when the offeree or offeree's agent receives it.

Death or Incompetence of the Offeror or Offeree

of the offeror or offeree: automatically terminates unless irrevocable offer.

Agreement

offer and acceptance. Parties must show mutual assent to terms of contract. Once this is reached, if the other elements of a contract are present, a valid contract is formed.

Lapse of Time

offer terminates by law when the period of time specified in the offer has passed. if no time period for acceptance is specified, the offer terminates at the end of a reasonable period of time.

Agreements to agree

offer's serious intention: modern view, can be enforceable if parties intended to be bound. Basis Technology Corp. v. Amazon.com, Inc.

Auctions

offer's serious intention: these are typically not offers but they become an invitation for offers through an auctioneer With reserve: can withdraw goods Without reserve: cannot withdraw goods

General Rule

offeree should not be legally obligated to affirmatively reject an offer.

Communication of Offer

offeree's knowledge of the offer: directly by the offeror or use of agents. Alexander v. Lafayette Crime Stoppers, Inc. When was this ..... to the plaintiff?

Requirements of the offer

offeror's serious intention, definiteness of terms, communication to offeree

Hague Conventions

on the choice of Court Agreements... provides certainty on jurisdiction and enforcement

Licensing

online contracts may be formed not only for the sale of goods and services but also for ... The sale of software generally involves a ... or a right to use the software, rather than a passage of title from the seller to the buyer.

Option Contract

other than a "firm offer" another type of irrevocable offer, in which is created when an offeror promises to hold an offer open for a specified period of time in return of consideration given by the offeree. It takes away the offeror's power to revoke the offer for the period of time specified in the option. They are usually used in the sale or lease of real estate.

The Uniform Electronic Transaction Act

purpose is to remove barriers to forming electronic commerce. Must have a E-signiture.

not offers

statements of future intention (offers or not)

Offeree

the one to whom the offer or proposal is made.

Offeror

the ones who make an offer or proposal to another party

Agreement

the parties must agree on the terms of contract and manifest to each other their mutual assent (agreement) to the same bargain. Two events occur: An offer and an acceptance. One party offers a certain bargain to another party, who then accepts that bargain. The ... does not necessarily have to be in writing.

Acceptance

the voluntary act (expressed or implied) by the Offeree that shows assent (agreement) to the terms of an offer. It must be unequivocal and must be communicated to the offeror.

Preliminary Negotiations

these are not offers but they are request or invitation to negotiate. It only expresses a willingness to discuss the possibility of entering into a contract.

Advertisements

these are not offers to contract, but they are invitations to negotiate. These include respresentations made in mail-order catalogues, price lists, and circulars.

Irrevocable Offers

this means that the offer cannot be revoked. courts are generally unwilling to allow revocation when offeree has changed position based on justifiable reliance on the offer. (Option Contract)

Unequivocally

to exercise the power of acceptance effectively, the offeree must accept ...

Public-Key Infrastructure

two mathematically linked but different private and public keys are generated. Cyber notary.

Duty to Speak

when offeree has .... he takes benefit of services with opportunity to reject. Prior dealings with offeror.

Uniform Commercial Code

which governs the sale of contracts, states that any contract for the sale of goods "may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract."