I. Agreement- the parties must agree on the terms of the contract and manifest to each other their mutual assent to the same bargain. Evidenced by an offer and acceptance.
a. Requirements of the Offer –an offer is a promise or commitment to do or refrain from doing some specified action in the future.
i. Three elements are required: offeror must have serious intention to become bound by offer, the term of the offer must be reasonably certain or definite, and the offer must be communicated to the offeree.
ii. Intentions – excludes offers made in obvious anger/jest/excitement. Other examples that don’t count as intention are:
1. Expressions of Opionion- such as a doctor describing healing time
2. Statements of Future Intent – such as saying “I plan to…”
3. Preliminary Negotiations- a request to negotiate such as “will you sell Blythe estate?” or a contract bid
4. Advertisments- ads and price lists don’t count with the exception of a reward for the return of lost property
a. With Reserve- seller may withdraw the goods at any time before the auctioneer closes the sale. Typical auction
b. Without Reserve-the goods cannot be withdrawn by the seller and must be sold to the highest bidder.
6. Agreements to Agree- agree to agree to the material terms of a contract at a future date. They can be enforceable contracts if it is clear that the parties intended to be bound and no disputed issues remain to be resolved.
iii. Definiteness of Term – identification of the parties, identification of the object or subject matter of the contract, consideration to be paid, time of payment/delivery/performance
iv. Communication-the offer must be communicated. This is important when returning a lost dog without bringing proof of the reward sign.
b. Termination of the Offer – can occur by action of the parties or operation of law
i. Revocation- offeror’s act of withdrawing an offer. It can be revoked as long as the offeree hasn’t accepted it yet. Effective when the offeree receives it.
1. Irrevocable Offers include a merchant’s firm offer, and an option contract (offer promises to hold an offer for a specified period of time in return for a payment)
ii. Rejection of the Offer by the Offeree – expressed through words or conduct
iii. Counteroffer by the Offeree- rejection of original offer and simultaneous making of a new offer.
1. Mirror Image Rule requires the offeree’s acceptance to match the offeror’s offer exactly.
iv. Termination by Operation of Law
1. Lapse of Time
2. Destruction of the specific subject matter of the offer
3. Death or incompetence of the offeror or the offeree
4. Supervening illegality of the proposed contract.
c. Acceptance- voluntary act by the offeree that shows assent to the terms of an offer. It must be an unequivocal acceptance, which is about the mirror image rule.
i. Silence is not acceptance unless the offeree has a duty to speak or both parties are working from a prior dealing and routine.
ii. Communication of Acceptance is required for a bilateral contract, but not a unilateral contract. A bilateral contract acceptance must be timely, which is before the offer is terminated.
iii. Mailbox Rule- acceptance begins when the the offere sends or delivers communication via the mode expressly or impliedly authorized by the offeror. It does not apply for instantaneous forms of contact such as face-to-face.
iv. Substitute Method of Acceptance-a substituted form of acceptance may be effective if it serves the same purpose as the authorized means. However, the contract won’t be formed until the acceptance is received by the offeror.
II. Agreements in E-Contracts
a. Online Offers
i. Displaying the Offer- seller’s websiete should include a link to the page containing the full contract
iii. Dispute- Settlement Provisions- The forum selection clause indicates a forum or location in which contract disputes will be resolved. Choice-of-law clause specifies that any dispute arising out of the contract will be settled in accordance with the law of a particular jurisdiction
b. Online Acceptances –
i. Click-on agreement is a way to accept based on the principles of The Restatement (Second) of Contracts and the UCC
ii. Shrink Wrap Agreements- usually between the manufacturer and end user. The terms are expressed inside the box in which the goods are packaged.
iii. Browse-Wrap Agreement – similar to click-on, but the offeree doesn’t have to click accept.
c. E-Signature Technologies – 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.
i. Digitized- graphic image of signature
ii. Public-key infrastructure- binary code that allows for private signing. It must be legally recognized by a cybernotary.
d. State Laws Governing E-Signatures – in 1999 the Uniformed Electronic Transactions Act (UETA) created to establish uniformity after some states had different agreements to the use of e-signatures.
e. Federal Law on E-Signatures and E-Documents – in 2000, congress enacted E-SIGN Act. Both parties must agree to use e-signature and then it is ok. It cannot be used on health insurance terminations, divorce decrees, court papers, evictions, prenuos, and wills.
f. Partnering Agreements – 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
III. The Uniform Electronic Transactions Act
a. The Scope and Applicability of the UETA – establishes that records, signatures, and contracts cannot be denied enforceability solely due to their electronic format. It does not apply to a transaction unless each of the parties has previously agree to conduct transactions by electronic means.
b. The Federal E-SIGN Act and the UETA – UETA is not preempted by the E-SIGN Act. The E-SIGN allows states to enact alternative requirements.
c. The Effect of Errors- if there is a mistake and one party doesn’t notice it, the conforming party can make the contract void. The parties should notify each other immediately when a mistake is made.
d. Timing an electronic record is received when it enters the recipient’s processing system, even if no individual is aware.
IV. International Treaties Affecting E-Contracts discussed at UN Convention and established the United Nations Convention on the Use of Electronic Communications in International Contracts in 2005. It creates srandards for functional equivalence.