Chapter 14:

E­Contracts and E­Signatures

92
 WHAT THIS CHAPTER IS ABOUT
E­contracts include any contract entered into in e­commerce, 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 
e­contracts.

CHAPTER OUTLINE
I. FORMING CONTRACTS ONLINE
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 click­on 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. Click­On Agreements
A  click­on 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. Shrink­Wrap Agreements
A shrink­wrap 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 warranties, remedies, and other issues.

a. Shrink­Wrap Agreements and Enforceable Contract Terms
Courts often enforce shrink­wrap 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. Shrink­Wrap Terms That May Not Be Enforced
If a court finds that the buyer learned of the shrink­wrap 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. Browse­Wrap Terms
Browse­wrap 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.

II. E­SIGNATURES
How are e­signatures created and verified, and what is their legal effect?

A. E­SIGNATURE TECHNOLOGIES
93
 Methods for creating and verifying e­signatures include—

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

2. Public­Key Infrastructure­Based 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. Other Forms
A smart card is a credit­card 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 face­scanning.

B. STATE LAWS GOVERNING E­SIGNATURES
Most states have laws governing e­signatures, 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 E­SIGNATURES AND E­DOCUMENTS
In 2000, Congress enacted the Electronic Signatures in Global and National Commerce (E­SIGN) 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. PARTNERING AGREEMENTS
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 ELECTRONIC TRANSACTIONS ACT
The UETA removes barriers to e­commerce by giving the same legal effect to e­records and e­signatures as to 
paper documents and signatures.

A. THE SCOPE AND APPLICABILITY OF THE UETA
The UETA applies only to e­records and e­signatures 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 E­SIGN ACT AND THE UETA

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

2. Can the States Enact Alternative Procedures or Requirements?
Under   the   E­SIGN   Act,   states   may   enact   alternative   procedures   or   requirements   for   the   use   or 
acceptance of e­records or e­signatures if—

a. The procedures or requirements are consistent with the E­SIGN Act.
b. The procedures do not give greater legal effect to any specific type of technology.
c. The state law refers to the E­SIGN Act if the state adopts the alternative after the enactment of 
the E­SIGN Act.
95 UNIT TWO: CONTRACTS

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

1. The Parties Must Agree to Conduct Their Transaction Electronically
This agreement may be implied by the circumstances and the parties’ conduct (for example, giving 
out a business card with an e­mail address on it). Consent may also be withdrawn.
 2. 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. Attribution
The   effect   of   an   e­record   in   a   transaction   is   determined   from   its   context   and   circumstances. 
Attribution refers to the identification of a party.

a. Names and “Signatures”
A person’s name is not necessary to give effect to an e­record, but if, for example, a person types 
his or her name at the bottom of an e­mail purchase order, that typing qualifies as a “signature” 
and is attributed to the person.

b. Relevant Evidence
Any relevant evidence can prove that an e­record or e­signature is, or is not, attributable to a 
certain person.

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

4. Notarization
A document can be notarized by a notary’s e­signature.

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

b. To Avoid the Effect of an 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. Timing

a. When Is an E­Record “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 e­record leaves 
the sender’s control or comes under the recipient’s control, it is sent.

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

TRUE­FALSE QUESTIONS
(Answers at the Back of the Book)
        1. A shrink­wrap agreement is normally not enforced.
97 UNIT TWO: CONTRACTS

        2. A click­on agreement is normally enforced.

        3. State e­signature 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 e­record is considered received under the UETA only if a person is aware of its receipt.

        10. Under the UETA, once an e­record leaves the sender’s control or comes under the recipient’s control, it is 

sent.

FILL­IN QUESTIONS
(Answers at the Back of the Book)
Parties __________________  (must/need not) participate in e­commerce to make binding contracts, according to 
the UETA. E­records are valid under the    _________________  (E­SIGN Act only/UETA only/E­SIGN Act and the 
UETA). The  UETA supports all e­transactions, _________________ (and creates/ but does not create) rules for them. 
The UETA __________________  (applies/ does not apply) unless contracting parties agree to use e­commerce in their 
transactions.

MULTIPLE­CHOICE QUESTIONS
(Answers at the Back of the Book)
        1. Alpha Corporation attempts to enter into shrink­wrap agreements with buyers of its products. A shrink­
wrap agreement is an agreement whose terms are expressed

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

        2. Beta,   Inc.,   includes   a   shrink­wrap   agreement   with   its   products.   A   court   would   likely   enforce   this 
agreement if a buyer used the product

a. after having had an opportunity to read the agreement.
b. before having had an opportunity to read the agreement.
c. only after actually reading the agreement.
d. none of the 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. a binding contract that does not include the terms.
b. a binding contract that includes only the terms to which Holly later agrees.
c. a binding contract that includes the terms.
d. no contract.

        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   (E­SIGN   Act),   because   this 
contract is in electronic form, it

a. may be denied legal effect.
b. may not be denied legal effect.
c. will be limited to certain terms.
d. will not be enforced.

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

a. e­commerce.
b. traditional commerce.
c. e­commerce or traditional commerce.
d. none of the 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. none of the contract.
b. only the part of the contract that does  not involve computer information.
c. only the part of the contract that involves computer information.
d. the entire contract.

        7. Digital Tech, Inc., e­mails an e­record, as part of a business deal, to E­Engineering Corporation. Under the 
UETA, an e­record is considered sent

a. only when it leaves the sender’s control.
b. only when it comes under the recipient’s control.
c. when it leaves the sender’s control or comes under the recipient’s control.
d. when it is midway between the 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. only if NSI’s name is affixed to the e­record evidencing the error.
b. only if OSC takes reasonable steps to return any benefit or consideration received.
c. under any circumstances.
d. under no circumstances.
99 UNIT TWO: CONTRACTS

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

        10. Delta Company and Epsilon, Inc., engage in e­commerce without expressly opting in or out of the UETA. 

The UETA covers

a. none of the contract.
b. only the part of the contract that does  not involve e­commerce.
c. only the part of the contract that involves e­signatures.
d. the entire contract.

SHORT ESSAY QUESTIONS
1. Are shrink­wrap and click­on 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 E­SIGN 
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 e­commerce. 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   accounting   firm   that   provides   bookkeeping,   payroll,   and   tax   services   for   small 
businesses. Java, Inc., is a small manufacturing firm, making and selling commercial espresso machines.

        1. Java sends e­mail 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

a. cannot be revoked because it is a firm offer.
 b. cannot be revoked because it is an option contract.
c. could have been revoked only before Doe saw it.
d. may be revoked any time before it is 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. the fairness of the circumstances.
b. the offeree’s subjective intent.
c. the parties’ objective intent.
d. the parties’ subjective 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 of contract suit against Doe & Roe, which asserts the mistake 
as a defense. Doe & Roe will win

a. if Java wrote the contract.
b. if the mistake was unilateral and Java knew it.
c. only if the mistake was due to Java’s negligence.
d. only if the mistake was 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. the contract has been assigned.
b. there is an unexecuted accord between the parties.
c. Java has been discharged by a novation.
d. none of the above.
101 UNIT TWO: CONTRACTS

        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. damages.
b. specific performance.
c. damages and specific performance.
d. none of the above.

QUESTIONS ON THE EXTENDED CASE STUDY FOR UNIT TWO—
FRIEZO V. FRIEZO
(Answers at the Back of the Book)
        1. A   Connecticut   state   statute   provides   that   a   prenuptial   agreement   is   not   enforceable   if,   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. includes extraneous factors such as the timing of the disclosure.
b. refers to the nature, extent, and accuracy of the information disclosed.
c. mandates that the disclosure be exact and precise.
d. requires the disclosure of income and assets but not financial 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 in the agreement that he had examined it and understood it.
b. the   prospective   husband   had   considerable   financial   experience   and   spent   much   time   drafting   the 
prenuptial agreement.
c. the prospective wife acknowledged in the agreement that she had examined it and understood it.
d. the prospective wife had little time to evaluate the agreement and lacked financial 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 in the agreement that he had examined it and understood it.
b. the   prospective   husband   had   considerable   financial   experience   and   spent   much   time   drafting   the 
prenuptial agreement.
c. the prospective wife acknowledged in the agreement that she had examined it and understood it.
d. the prospective wife had little time to evaluate the agreement and lacked financial experience.

From book website
An 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 electronically, such as over the Internet.

c. an electronic contract formed between merchants only.

d. an electronic contract formed between a 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 never read online offers.

b. the offeror controls the offer and thus the resulting contract.

c. the offeree controls the offer and thus the 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 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.
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:
103 UNIT TWO: CONTRACTS

Quiz from class

Question
1 out of 1 points
1
The terms in a click-on agreement may be enforced if they are construed as parts of a
contract.
Selected Answer: True
Correct Answer: True

Question
1 out of 1 points
2
Under federal law, an e-document is as valid as a paper document, without exceptions.
Selected Answer: False
Correct Answer: False

Question
1 out of 1 points
3
Integrity Manufacturing, Inc., and Jiffy Delivery Service make a deal over 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
Selected Answer: accurately reproduced and retained.
Correct Answer: accurately reproduced and retained.

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
Selected Answer: after having had an opportunity to read the agreement.
Correct Answer: after having had an opportunity to read the agreement.

Question
1 out of 1 points
5
Parties cannot opt out of the UETA.
Selected Answer: False
Correct Answer: False

Question
1 out of 1 points
6
Eagle Oil Company and Federated Refining, Inc., attempt to enter into a contract in
electronic form. Under the Electronic Signatures in Global and National Commerce (E-
SIGN) Act, solely because this contract is in electronic form, it
 Selected Answer: may not be denied legal effect.
Correct Answer: may not be denied legal effect.

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.
Selected Answer: True
Correct Answer: True

Question
1 out of 1 points
8
Under the UETA, a contract solely in electronic form is enforceable.
Selected Answer: True
Correct Answer: True

Question
0 out of 1 points
9
In Case 14.2, Specht v. Netscape Communications Corp., the court held that because the
plaintiffs did not expressly assent to the terms of the contract, they
Selected Answer: must stop using the product downloaded from the defendant.
Correct Answer: need not submit to arbitration.

Question
1 out of 1 points
10
A contract, to be enforced, may require the signature of the party against whom
enforcement is sought.
Selected Answer: True
Correct Answer: True

Question
0 out of 1 points
11
Under federal law, an e-signature is as valid as a signature on paper, without exceptions.
Selected Answer: True
Correct Answer: False

Question
1 out of 1 points
12
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
105 UNIT TWO: CONTRACTS

enforceable
Selected Answer: both parties must have agreed to use e-signatures.
Correct Answer: both parties must have agreed to use e-signatures.

Question
0 out of 1 points
13
Select Food Company and Tasty Goods, Inc., enter into a contract that the UETA covers.
The UETA covers issues relating to
Selected contract formation only.
Answer:
Correct Answer: neither agency nor contract formation.

Question
1 out of 1 points
14
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 when it leaves the sender's control or comes into the recipient's
Answer: control.
Correct Answer: when it leaves the sender's control or comes into the recipient's
control.

Question
0 out of 1 points
15
The UETA requires that an agreement to conduct a transaction electronically be made
electronically.
Selected Answer: True
Correct Answer: False

Question
1 out of 1 points
16
A shrink-wrap agreement is normally enforceable.
Selected Answer: True
Correct Answer: True

Question
1 out of 1 points
17
The UETA requires the use of security procedures to verify changes to e-documents.
Selected Answer: False
 Correct Answer: False

Question
1 out of 1 points
18
All of the terms presented in shrink-wrap agreements have been enforced.
Selected Answer: False
Correct Answer: False

Question
1 out of 1 points
19
Under the UETA, a signature may be denied legal effect solely because it is in electronic
form.
Selected Answer: False
Correct Answer: False

Question
1 out of 1 points
20
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 enters Best's processing system in a readable form, even if no person
Answer: is aware of its receipt.
Correct enters Best's processing system in a readable form, even if no person
Answer: is aware of its receipt.

E-Contracts
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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.

107 UNIT TWO: CONTRACTS

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 and 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 v. Gateway, 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.

c. enforceable, depending on the circumstances.

d. enforceable, but only if the buyers agree to their enforceability.

12. In the case 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 laws.

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
109 UNIT TWO: CONTRACTS

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 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 which of the following?

a. Digital signatures.

b. Signature dynamics.

c. Symmetric 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 act.

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 environment.

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:
111 UNIT TWO: CONTRACTS

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.
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