Contracts Commons^™

Washington's Electronic Signature Act: An Anachronism In The New Millennium, Stephanie Curry

Washington Law Review

Today, electronic contracting is at the forefront of how consumers, governments, and businesses conduct their affairs. Over the last several decades, electronic contracting has taken on new forms that have raised doubts about contract formation and enforceability. In order to facilitate commerce, the federal government and forty-nine states have responded by passing legislation that gives broad legal recognition to electronic signatures. Washington State is currently the only state that has not updated its electronic signature statute to comport with modern technology and ways of doing business. As a result, Washington’s Electronic Authentication Act is likely preempted by federal law, and …

Stevens V. Publicis: The Rise Of "No E-Mail Modification" Clauses?, Stephanie Holmes

Washington Journal of Law, Technology & Arts

E-mails occupy an ambiguous space between informal oral conversation and formal written documents. Their legal significance in contract modification is, however, becoming increasingly clear. In April 2008, the Supreme Court of New York, Appellate Division, decided Stevens v. Publicis, S.A. and in the process, raised the legal status of e-mail exchanges in the context of contract modification. Before Stevens v. Publicis, S.A., an e-mail could constitute a “signed writing” under New York law, thus satisfying the statute of frauds. An e-mail exchange could also amend a contract if, for instance, it had been validated by the parties’ reliance on …

Electronic Pitfalls: The Online Modification Of Ongoing Consumer Service Agreements, Ben Casady

Washington Journal of Law, Technology & Arts

This Article examines the procedure for online modification of an ongoing consumer contract. It reviews the relevant case law, including Douglas v. U.S. District Court, a recent Ninth Circuit decision that calls into question the validity of changing contractual terms by merely posting the changes on the service provider’s Web site. The Article also examines the discrete components found in an effective online contract modification and provides practical pointers for contract drafters.

Conditions And Covenants In License Contracts: Tales From A Test Of The Artistic License, Robert W. Gomulkiewicz

Articles

Pity the poor Artistic License version 1.0 (ALv1). The Free Software Foundation criticizes the license as “too vague” with some passages “too clever for their own good.” The Open Source Initiative suggests that it has been “superseded.” ALv1’s authors at the Perl Foundation even acknowledge its flaws.

Yet it is the ALv1, not the venerable GNU General Public License (GPL), which the Federal Circuit upheld in Jacobsen v. Katzer [535 F.3d 1373 (Fed. Cir. 2008)], establishing at long last that open source licenses are enforceable. Although that outcome received most of the headlines, the case’s greater significance lies elsewhere.

Jacobsen …

Selling It First, Stealing It Later: The Trouble With Trademarks In Corporate Transactions In Bankruptcy, Xuan-Thao Nguyen

Articles

Why does AI get two bites of the “Apple” trademark? Should AI be allowed to grant the right to use the trademark “perpetual and exclusive” with the sale of the music division and steal it back for free, ten years later? This article is part of an ongoing and broader inquiry into the intersection of trademark, contract and bankruptcy laws. This article argues that recent bankruptcy decisional law, notably the In re Exide Technologies decision, misunderstands the “perpetual and exclusive” trademark transaction, deeming it as an ordinary “license” when it is truly an outright sale. This article explains that the …

Toward A Fairer Model Of Consumer Assent To Standard Form Contracts: In Defense Of Restatement Subsection 211(3), Wayne R. Barnes

Washington Law Review

Standard form contracts permeate our very existence, and now even include contracts we assent to online by way of "clickwrap" and "browsewrap" methods. Notwithstanding the ever-increasing presence and complexity of such standard form contracts, both offline and online, the law of contracts in this area has remained fairly static since before the nineteenth century. The only meaningful salve to the problem of misinformed assent to onerous clauses in standard form contracts thus far has been the unconscionability doctrine, but that doctrine tends to be reserved for the harshest and severest terms. Therefore, a new tool is needed for courts to …

Toward A Fairer Model Of Consumer Assent To Standard Form Contracts: In Defense Of Restatement Subsection 211(3), Wayne R. Barnes

Washington Law Review

Standard form contracts permeate our very existence, and now even include contracts we assent to online by way of "clickwrap" and "browsewrap" methods. Notwithstanding the ever-increasing presence and complexity of such standard form contracts, both offline and online, the law of contracts in this area has remained fairly static since before the nineteenth century. The only meaningful salve to the problem of misinformed assent to onerous clauses in standard form contracts thus far has been the unconscionability doctrine, but that doctrine tends to be reserved for the harshest and severest terms. Therefore, a new tool is needed for courts to …

Enforcement Of Contractual Terms In Clickwrap Agreements: Courts Refusing To Enforce Forum Selection And Binding Arbitration Clauses, Rachel Cormier Anderson

Washington Journal of Law, Technology & Arts

In three recent cases, courts have invalidated portions of consumer clickwrap agreements containing either forum selection or binding arbitration clauses. In the first case, the Washington State Court of Appeals invalidated a forum selection clause found in a clickwrap agreement because the clause was contrary to state consumer protection policies. In the second case, the California Court of Appeals rejected a clickwrap agreement calling for binding arbitration in a specified forum when the plaintiff sought to bring a class action claim. Finally, the U.S. Court of Appeals for the Fifth Circuit recently declared a binding arbitration clause because it was …

E-Contract Formation: U.S. And Eu Perspectives, Sylvia Mercado Kierkegaard

Washington Journal of Law, Technology & Arts

The United States (“U.S.”) and the European Union (“EU”) offer contrasting approaches to contract formation in Cyberspace. Two foci can be identified with EU law: (1) consumer protection and (2) market harmonisation. The American approach, however, is characterized by self-regulation and economic rationale. This Article examines and compares the EU and U.S. regulatory approaches to electronic contracting.

Clicking Away The Competition: The Legal Ramifications Of Click Fraud For Companies That Offer Pay Per Click Advertising Services, Daniel L. Hadjinian

Washington Journal of Law, Technology & Arts

Two businesses that advertise online, Lane's Gifts and Collectibles and Advanced Internet Technologies, recently filed lawsuits against Google, and other intermediaries that offer sponsored advertising services. The companies allege that these intermediaries failed to adequately protect them against "click fraud." Click fraud refers to the practice whereby competitors and other persons may click to view an online ad with no intention of buying, learning about the advertiser's services, or engaging in any other action that the ad aims to achieve. Plaintiffs allege that the intermediaries breached their contractual duties by charging the companies whose ads they hosted for fraudulent clicks, …

The Use Of Mtas To Control Commercialization Of Stem Cell Diagnostics And Therapeutics, Sean O'Connor

Articles

The recent focus on patents as a hindrance to stem cell research may turn out to be a red herring. The real culprits are material transfer agreements (MTAs), which govern the transfer of cell lines and other biological materials. The MTA’s primary purpose in life sciences research is to set contractual rights and obligations between parties where one party transfers biological materials to the other. For example, MTAs often focus on the physical handling, use, and distribution of the materials by the recipient, ensuring that the recipient complies with regulations for research involving humans or animals.

Although these interests are …

Diverging Perspectives On Electronic Contracting In The U.S. And Eu, Jane K. Winn, Brian H. Bix

Articles

The focus of this Article is the interrelated set of issues that have arisen, on one hand, from Internet transactions regarding the downloading of free or purchased software, as well as other Internet sales, and on the other hand, the distinctive transactional problems that modern business practices have created under the rubric of "shrink-wrap" or "terms in the box"—a late presentation of terms associated with the sale of computers or the licensing of software (with the terms included in the packaging, rather than presented to the user ahead of time)—but not necessarily confined to those transactions.

Such transactions raise novel …

The Impact Of Eu Unfair Contract Terms Law On U.S. Business-To-Consumer Internet Merchants, Jane K. Winn, Mark Webber

Articles

This article focuses on the application of European Union unfair contract terms law to retail Internet transactions that U.S. businesses might engage in with European consumers. It compares attitudes toward consumer protection regulation in the U.S. and the EU to provide some context within which the specific provisions of unfair contract terms law can be understood.

While many lawyers and legal academics in the U.S. who study the development of online markets are aware of the profound differences in U.S. and EU information privacy laws, the magnitude of the divergence in consumer electronic contracting law is not as widely recognized. …

Contracting Spyware By Contract, Jane K. Winn

Articles

The question of what constitutes "spyware" is controversial because many programs that are adware in the eyes of their distributors may be perceived as spyware in the eyes of the end user. Many of these programs are loaded on the computers of end users after the end user has agreed to the terms of a license presented in a click-through interface.

This paper analyzes whether it might be possible to reduce the volume of unwanted software loaded on end users' computers by applying contract law doctrine more strictly. Unwanted programs are often bundled with programs that the end user wants, …

Getting Serious About User-Friendly Mass Market Licensing For Software, Robert W. Gomulkiewicz

Articles

Software publishers use standard form end user licenses (“EULAs”) in mass market transactions on a regular basis. Most software users find EULAs perplexing and generally ignore them. Scholars, however, have focused on them intently. In the past twenty years over a hundred scholarly articles have been written on the subject. Most of these articles criticize EULAs and argue that courts should not enforce them. In their critique of EULAs, some scholars examine the adequacy of the offer, acceptance, and consideration. Others discuss EULAs as part of the troublesome issue of standard form contracting, and whether standard forms, on balance, harm …

Back To Prima Paint Corp. V. Flood & Conklin Manufacturing Co.: To Challenge An Arbitration Agreement You Must Challenge The Arbitration Agreement, Andre V. Egle

Washington Law Review

The Federal Arbitration Act (FAA) requires courts to order parties in a dispute arising out of a commercial contract containing an arbitration provision to proceed to arbitration unless the formation or performance of the arbitration agreement itself is at issue. In 1967, the U.S. Supreme Court held in Prima Paint Corp. v. Flood & Conklin Manufacturing Co. that under the FAA, courts, instead of arbitrators, should resolve claims for fraudulent inducement of arbitration agreements. However, courts were not permitted to resolve claims for fraud in the inducement of the underlying commercial contracts. The Court also held that when deciding whether …

Whose Deal Is It? Teaching About Structural Inequality By Teaching Contracts Transactionally, Kellye Y. Testy

Articles

Although Scott Burnham and others have urged the use of more contracts to teach Contracts for some time,'9 it is safe to say that the majority of Contracts courses in the United States do not put actual contracts front and center. While particular phrases or provisions surely are referenced in the steady diet of appellate decisions that comprise the first-year course, those decisions very rarely include the actual contract at issue for study. Moreover, in the increased compression of the first year course," few professors believe they can justify the time for transactional exercises or simulations in the rush to …

Legal Protection For Software: Still A Work In Progress, Robert W. Gomulkiewicz

Articles

Software began as geekware-something written by programmers for programmers. Now, software is a business and consumer staple. Cryptic character-based user interfaces have given way to friendly graphical ones; multi-media is everywhere; people own multiple computers of varying sizes; computers are connected to one another across the globe; email and instant electronic messages have replaced letters and telephone calls for many people.

The issue of whether the law should protect software seems quaint to us now. Over the past twenty-five years, legislatures and courts have concluded that copyright, patent, trade secret, trademark, and contract law all can be used to protect …

An Inquiry Into Several Difficult Problems In Enacting China's Uniform Contract Law, Wang Lliming, Keith Hand

Washington International Law Journal

Translator's Forward: In March of 1999, China's Ninth National People's Congress ("NPC") passed the Contract Law of People's Republic of China. The new law is the product of nearly six years of drafting work by China's Legislative Affairs Commission and contains over 400 articles, including 129 general contract provisions and 299 articles dealing with specific types of contracts. When the law takes effect on October 1, 1999, it will unify China's contract law by replacing the three principal contract statutes currently in force, the Economic Contract Law, the Foreign-related Economic Contract Law, and the Technology Contract Law. The passage of …

Despatches From The Front: Recent Skirmishes Along The Frontiers Of Electronic Contracting Law, Jane Kaufman Winn, Michael Rhoades Pullen

Articles

This Article will provide a short overview of the current efforts in the United States and the European Union to reform contract law to accommodate recent innovations in electronic contracting. Whether changes are needed to current contract law doctrines governing contract formation, effectiveness of contract terms, choice of law and forum provisions, special protections for consumers, and signature and writing requirements, revisions in these areas have all proved controversial. Even in those areas where a consensus may be emerging on whether law reform may be appropriate in some form, consensus is often still lacking with regard to the specific legislation …

Privately Legislated Intellectual Property Rights: Reconciling Freedom Of Contract With Public Good Uses Of Information, J.H. Reichman, Jonathan A. Franklin

Librarians' Articles

In an age of omnipresent clickwrap licenses, we acknowledge the need for a uniform set of default rules that would validate non-negotiable licenses as a mechanism for minimizing transaction costs likely to hinder economic development in a networked environment. However, we contend that any model of contract formation not driven by the traditional norms of mutual assent requires specially formulated doctrinal tools to avoid undermining long-established public good uses of information for such purposes as education and research, technical innovation, free speech, and the preservation of free competition.

With the convergence of digital and telecommunications technologies, creators and innovators who …

The License Is The Product: Comments On The Promise Of Article 2b For Software And Information Licensing, Robert W. Gomulkiewicz

Articles

Article 2B promises to draw together contract principles for software and information licensing that, at present, are spread among various bodies of law.

This Article argues that Article 2B must affirm industry standard licensing practices in order to prove beneficial. For example, Article 2B's affirmation of industry standard mass market licensing is important for both publishers and end users. Article 2B must also provide the flexibility to accommodate new distribution and licensing models that will arise as electronic commerce matures. Any other approach would fundamentally disrupt the software and information industries.

Moreover, this Article urges the drafters of Article 2B …

Preserving Real Estate Contract Financing In Washington: Resisting The Pressure To Eliminate Forfeiture, Thomas Leo Mckeirnan

Washington Law Review

There is pressure in Washington to abolish the forfeiture remedy from real estate contracts. Eliminating forfeiture would cripple the real estate contract and thus provide a disincentive for sellers to finance sales of their property. This result would be economically unsound and in conflict with the public policy in favor of promoting home ownership. Instead of abolishing forfeiture, the Washington State Legislature should amend current legislation to provide a more sensible and certain forfeiture remedy.

Contract Societies: Japan And The United States Contrasted, Shinichirō Michida, Veronica L. Taylor

Washington International Law Journal

This translation of an original Japanese language work by Michida Shinichirō contrasts the differences between the understanding of contractual obligations in the United States and in Japan. The translation cites specific differences between each country's statutes and case law, as well as distinct cultural factors that are important when considering respective understandings of contract in these societies. Translator's Introductory Note: This translation is intended to give readers an introduction to Japanese contract law theory and its operation in that society. Professor Shinichirō Michida was writing for a general audience in Japan, not simply for those with legal training. One of …

And Then There Were None: Requirements Contracts And The Buyer Who Does Not Buy, Cheryl R. Guttenberg

Washington Law Review

In requirements contract cases where buyer has significantly reduced—or no—requirements, courts employ inconsistent reasoning, resulting in legal uncertainty and economically inefficient exchanges. This Comment proposes a more predictable, efficient rule that would allow buyer to reduce its requirements after giving seller a business reason for the reduction, placing the risk of reduced requirements explicitly on seller.

Software Distribution Agreements And Bankruptcy: The Licensor's Perspective, J. Dianne Brinson

Washington Law Review

This Article addresses a special problem within the software-industry—licensee bankruptcy and the need to protect the rights of licensors in the software. Although federal law now protects the rights of a software licensee in the technology when a licensor undergoes bankruptcy, little guidance exists as to the effects of licensee bankruptcy upon the software licensor. This Article thoroughly reviews the relevant bankruptcy and copyright law as they relate to the computer software area, and then discusses why a licensor should consider avoiding the possibility of a software license being treated as an executory contract. The author concludes by offering practical …

Extending Legal Malpractice Liability To Nonclients—The Washington Supreme Court Considers The Privity Requirement—Bowman V. John Doe Two, 104 Wn. 2d 181, 704 P.2d 140 (1985), Scott Peterson

Washington Law Review

In Bowman v. John Doe Two, the Washington Supreme Court considered whether an attorney owes a duty of reasonable care to a third party in the absence of privity of contract. The attorney in Bowman represented a seventeen-year-old boy in juvenile court against charges brought by his mother. The boy's mother subsequently sued the attorney for acts of professional negligence that allegedly resulted in injury to the parent-child relationship. The court in Bowman held that the attorney owed no duty to the parent. However, dicta in the opinion indicates that the privity requirement may soon be relaxed in Washington. The …

Notes On The Reliance Interest, Robert Birmingham

Washington Law Review

The topic is Contract Damages. The interests are defined by how we protect them. Imagine a breaching promisor. We protect the reliance interest of the promisee by requiring the promisor to put her in a position as good as she would have been in had the parties not contracted. The other interests are the restitution interest, which we protect by requiring the promisor to give back what the promisee has given him; and the expectation interest, which we protect by requiring the promisor to put the promisee in a position as good as she would have been in had he …

The Warranty Of Merchantability And Computer Software Contracts: A Square Peg Won't Fit In A Round Hole, Edward G. Durney

Washington Law Review

Courts have consistently held that Article 2 of the Uniform Commercial Code (U.C.C.) governs transactions involving computer hardware. Treatment of computer software transactions has been less consistent. This Comment contends that computer software, an intangible, is not within the scope of Article 2. It further contends that the warranty of merchantability cannot meaningfully be applied by analogy in computer software contracts. Finally, this Comment concludes that existing tort and contract causes of action provide software users with sufficient protection.

Restricted Distribution Contracts And The Opportunistic Pursuit Of Treble Damages, Henry N. Butler

Washington Law Review

The analysis presented in this article addresses the narrow issue of the effects of potential treble damage actions on the behavior of contractually-related manufacturers and distributors. Part II of this article presents the notion of opportunistic behavior, which has influenced much of the economic analysis and the Supreme Court's recent treatment of vertical nonprice restraints. The transformation of the threat of opportunism into socially-wasteful expenditures of resources is also discussed. Part III examines the problematic role of opportunism in the distribution of goods, restricted distribution practices that aim to solve the problem, and the antitrust treatment of such restricted distribution …