Signals, Assent and Internet Contracting

Abstract:     
This article takes a critical look at the developing body of cases that address the threshold issue in Internet contracting: the issue of assent. While the Uniform Electronic Transactions Act and the federal Electronic Signatures in Global and National Commerce Act remove barriers to Internet contracting by providing that a contract shall not be denied legal effect solely because it is in electronic form, the statutes leave the substantive law of contracts intact. Therefore, it is up to the courts to define the extent to which the rules of assent should be modified to adapt to electronic transactions.

While the Internet is new, the challenges presented by Internet contracts are not. Traditional contract rules, based on the paradigm of two individuals meeting face-to-face to negotiate written terms, have been modified over the years to accommodate diverse methods of communicating contract terms. These modifications have been fashioned to account for the different signals sent to offerees by new methods of contracting.

Today's courts, however, virtually ignore the fact that the common law of contracts has developed rules that account for the different signals sent by contract terms that are delivered in novel ways. This article argues that courts must consider the cautionary function that the paper contract form has traditionally served and account for the different signals sent by electronic contracts. To support this argument, the article reviews the electronic contracting case law and compares it to older cases addressing the issue of assent when contract terms are delivered by novel methods. The paper then discusses the factual differences between paper and electronic contracts, drawing on computer science and marketing scholarship examining the ways that individuals perceive electronic communications. The paper concludes by suggesting approaches to the assent issue that take these different perceptions into account.

Keywords: contracts, internet

Accepted Paper Series