Affirmative Act Of Agreement Contracts Richard Warner Affirmative

Affirmative Act Of Agreement Contracts Richard Warner

Affirmative Act Of Agreement Contracts o o Example: a “legal terms and conditions” hyperlink is close to the “submit” button one clicks on to send credit card payment information, and below the button it says, “This sale is governed by the contract accessible through this link. By clicking on this button you agree to these terms and conditions. ” Courts routinely enforce these contracts.

Non-Internet Analogy o o In Carnival Cruise Lines, the a couple in California contracted to take a cruise that began in Florida. The cruise did not go well, and the couple sued for breach of contract. They sued in California although the contract required that they sue in Florida. The couple argued that they had not read the contract. The court enforced the contract anyway.

The Duty To Read o o If you have an adequate opportunity to read and understand a agreement, and you enter into the agreement without reading it, the law will, within broad limits, treat you as if you read and understood the agreement.

Caspi v. Microsoft o “The scenario presented here is different because of the medium used, electronic versus printed; but, in any sense that matters, there is no significant distinction. The plaintiffs in Carnival could have perused all the fine-print provisions of their travel contract if they wished before accepting the terms by purchasing their cruise ticket. The plaintiffs in this case were free to scroll through the various computer screens that presented the terms of their contracts before clicking their agreement. ” (emphasis added, (732 A. 2 d 528 (1999))

What Do Such Contracts Do? o o Businesses typically perform above their contractual obligations. Litigation is rare n n n Renegotiation and cooperation are the norm In consumer contracts the amounts are too small to justify litigation Market forces compel performance more than the threat of litigation

Insurance and Norms o The contracts are disaster insurance n The severely limit liability in a variety of ways o o The US and Europe differ in what they allow here Do they do any more? n They reflect and support the shared normative framework in which the market operates

Note On Promising o o In the eyes of the law, your words and actions count as a promise if a reasonable person would, in the circumstances interpret them as a promise It does not matter whether you really meant your words and actions as a promise

Marketing and Contracting o “The nature of your relationship with each of your customers. . . will be collaborative. Instead of having to be “sold to, ” your customers increasingly will “sell themselves, ” stepping hand in hand with you through the complicated information exchanges that will, more and more, accompany individual product sales. ” n Don Peppers & Martha Rogers, The One To One Future: Building Relationships One Customer at a Time 16 (1993).

Marketing Bots o “The v. Rep offered by Native. Minds. . . understands questions and identifies the correct reply by matching information from the “input string” with patterns found in its scripts. . . The v. Reps have a long-term memory that retains facts about individual Website visitors from one session to the next, and a conversation database that logs bot-visitor conversations. ” o Business 2. 0, March 6, 2001, p. 59

The Problem o o o How do you know what you promised whom? Not a serious problem for large companies with legal staff that continuously and systematically reviews the web site But it is a problem for companies without this legal resource—e. g. , tradeshop. com.

The Traditional Solution: Entire Agreement Clauses o o “These terms and conditions. . . constitute the entire agreement with regard to this sale and expressly supersede and replace any prior or contemporaneous agreements, whether written or oral. . . ” The point is planning--to define the extent of one’s contractual commitments in one place. As the law says: to make it the complete and exclusive statement of the parties’ obligations

Legal Effect of Entire Agreement Clauses o o Putting an entire agreement clause in a contract does not automatically make it the complete and exclusive statement of the parties’ obligations The test is intent: Do the parties intend it to be the complete and exclusive statement of their obligations with regard to the sale?

Legal Effect On The Web o o It is doubtful that Entire Agreement Clauses are effective in Web site contracts Think of the structure of a commercial Web site: There is a standard form contract behind a hypertext link, and there a lot of statements about products and services all over the web site

Example o o Fred sells makeup over the Web. To get customers to buy from him, he sets up a 24 x 7 hotline. His home page says in large bold type: “Why buy from Fred? Best quality, best prices, and a 24 x 7 hotline for all your questions and problems!” Is the representation of 24 x 7 support an enforceable promise?

Status Of The Representation o o o Sales talk or promise? No misrepresentation? Two views: n n All web site promises that are part of the basis of the bargain are part of a single written contract o The single contract approach is not attractive A written contract and a promise outside that contract

Party Intent o o o Do the parties intend that the standard form contract represent the complete and exclusive statement of their obligations? No. And, a clear basis of the bargain lies outside the contract This is a limitation on the duty to read

Why This Matters o o So what is so important about this? It is a traditional problem in contract law But the problem is ameliorated by the fact that in many cases the salespersons representations are oral Which means it is difficult to prove they were made On the Web, they are all written down

A Different Sort Of Clause? o o One solution is to police the Web site carefully and control its content. Large e-commerce concerns do this Smaller concerns may lack the time and money to adequately police their site Complications from “one-to-one” marketing Can a different kind of clause help?

Cancellation Clauses o “With thirty days notice to the buyer, the seller has the right to cancel or modify any part of the agreement that is not contained in this written contract”