Contracts

• Practical Business Necessities.
  You may be particularly concerned about the identity of the other party, accuracy of purchase orders (especially for custom parts), or maintaining confidentiality.

• Evidentiary Purposes.
  Should it become necessary to enforce the contract, you wil need to consider evidentiary issues, including hearsay rules and the business records exception, best evidence rules, and parole evidence rules.

• Legal Requirements.
  In order to be enforceable, certain transactions have minimal legal requirements, such as being in "writing," being "signed," or being notarized.

Depending on the context of the transaction, some or all of the following factors should be addressed. Consider the interplay of each factor and the three perspectives: practical business necessities, evidentiary purposes, and legal requirements.

• Authenticity.
  Always, you want to be assured that the person with whom you believe you are dealing is in fact that person, and that she cannot back down from her contractual commitments. In the non-online world, we often rely on face-to-face encounters with known persons, company letterhead, and signatures.

  In particular, even if you verify authenticity, the other party might be able to repudiate the contract either because of legal requirements (such as requirement of a signature) or evidentiary problems (such as proving that you made a follow-up telephone call to verify the authenticity).

• Information Integrity.
  Even if you have no doubts about the authenticity of the party on the other end of the transaction, you may need to be concerned that the message or contract sent by the other party has not been altered - either intentionally or non-intentionally. Furthermore, from an evidentiary perspective, you need to show that the document has not been altered since being received by you.

• Confidentiality.
  In some instances, confidentiality might be desired or necessary. Moreover, when people are releasing personal information or credit card numbers, confidentiality may be necessary to provide both real security as well as psychological comfort.

• Enforceable Terms.
  In certain situations, you want to make sure that even if you get paid for providing certain rights or materials, the specific contractual provisions that you wrote into the contract will govern. Such terms could include restrictions on the scope of a license, warranty limitations, or prohibitions onreverse engineering a product.

Useful links about on-line Contracts

Managing the legal risks of e-commerce: Practical Legal Strategies. http://www.gtlaw.com.au/pubs/ecommnovelissues.html
This is an Australian legal persperctive of the legal risks of e-commerce. April 18, 1998. [back to text]

Laws and Regulations

References

Reams, Bernardo. Jr., Electronic Contracting Law. (Clark Boardman Callahan, 1996)[back to text]

Smedinghoff, Thomas. On Line Law. (Addison-Wesley Developers Press, 1996.[back to text]