Humans, Computers, and Binding Commitment
Posted: 21 Jul 2000
Contracts in electronic commerce do not look like the traditional contract theory picture of a meeting of the minds or autonomous consent. Increasingly, deals are being made between a human and a computer, or between two computers managed only remotely by humans. This paper addresses the implications of that trend on our understanding of contractual commitment, and on the law that determines which commitments are binding.
Specifically, the paper addresses (a) "click wrap" contracts, which purport to be formed by on-screen acts such as clicking on a button labeled "I agree," or even by the mere act of visiting a web site; (b) "machine-made" contracts, which are formed directly by software programs acting as "agents" for humans or for firms; and (c) "viral contracts," in which restrictions on use are built directly into a software product or other digitized information content, thereby purporting to bind all subsequent users (as well as the initial purchaser). Each of these has analogies in pre-electronic law -- for example, in contracts of adhesion; in the actions of shipping clerks in the so-called "battle of the forms;" and in covenants running with real property. But each of these pre-electronic practices is usually viewed as an exception to our "normal" picture of contract formation. The current trends in electronic contracting threaten to make those exceptions the rule.
This paper distinguishes between autonomy-based theories of contract, in which all of the above practices are highly problematic, from efficiency-based theories, in which many of these practices are not (necessarily) problematic at all. It also draws an analogy to Calabresi and Melamed's distinction between property rules and liability rules: the contract-formation issue is, in many respects, a question about what one party may or must do in order to alter the legal rights of another. Finally, the paper also describes and critiques some proposed legislative solutions, including the Uniform Computer Information Transactions Act (UCITA) and the Uniform Electronic Transactions Act (UETA).
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