Online+Contracting

An online contract occurs between two parties conducting business online. Online contracting law follows the basic rules and requirements of a contract written or typed in a paper format. //The Uniform Computer Information Transaction Act// is the specific act that deals and regulates online transactions in the e-commerce world. The scope of this act which defines it as “an agreement to create, modify, transfer, or license computer information or informational rights in computer information,” (Ferrera, pg. 168)**.** This act applies to the social networking site as the site will allow many people to create widgets and distribute them to the site’s own users. Purchasing widgets and modifying an author’s original widgets are one of the many actions that the website needs to regulate using online contracting. The users of this website will utilize online contracting to create an agreement for use, access and/or any modification of content on the social networking website. As mentioned, online contracts follow the guidelines of a typical written contract. Contracts are mutually agreed upon by both parties where both exchange something valuable that is not against the law. Also, both parties legally have the power to enter in a contract where they can create one and sign one. In the case of a social networking site, the company needs to create an online contract regarding the terms of use of the websites' content and its e-commerce system for its development and distribution of the site’s and the member’s own widgets. An online contract consists a person reading an online document, an option to accept or decline the agreement, and signing an agreement online through an electronic signature. The social networking website will encounter a variety of legal issues when conducting e-commerce. The process of online contracting will allow the creator of the social networking website and its users to have an online collective agreement. It is required for the website creator to allow the user to be informed on the terms and conditions of using the website. The social network company allows its users to share their own information and widgets with other members of the website. The social network’s online contract should explicitly state all the terms and conditions of using the social network website. The online contract terms and conditions agreement should also be accessible to the user. The social network company needs to provide an online contract that is visibly available to the public to access. One of the cases concerning online cases is the 2001 legal case concerning //Specht vs. Netscape Communications Corp//. In this legal case, the plaintiff complains that //Netscape//’s visitors “are not required affirmatively to indicate their assent to License Agreement, or even to view the license agreement, before proceeding with a download of the software“ (Ferrera, pg. 179). An online contract requires a mutual assent. In this particular case, Specht did not have any opportunities to read //Netscape//’s terms and conditions for agreement because the “sole reference on th[e] page to the License Agreement is visible only if a visitor scrolls own through the page,” (Ferrera, pg. 179). //Netscape// did not provide opportunities for Specht to read its terms and conditions on using its services. This affects the rights of the user because the user did not sign any agreement. //Netscape// claims that accepting the download is a form of acceptable agreement to the terms and conditions of the company. The court ruled against //Netscape// because there was no mutual assent violating the section three of the restatement second of the //Law of Contracts//. A proper mutual assent requires //Netscape//’s users to understand on what is being agreed upon. Although //Netscape// claims that there were proper measures on contract agreements using the shrink wrap or click wrap for affirmative action expressing an agreement, Specht should be informed about these agreements for explanation and clarification of the terms and conditions. The social networking website needs to ensure that they send proper documentation and procedures for assent to the prospective users to avoid any legal issues. The social networking company will have to avoid the same problems //Netscape// experienced by not providing a proper form of mutual assent. Informing the user is the first step for a proper mutual assent. They will need to have their terms and agreement visible to its prospective users. The social networking company can establish this by providing its prospective users enough information about their terms and conditions as a PDF file to be saved in their computer for their own use. The terms and conditions must be easily accessible for the user to understand about the online contract. Unlike //Netscape//’s omission which did not allow its users to read the contract before it accepts a download, the social networking company needs to have the agreement visible before an agreement. The next step on this process is that the social networking company needs to use electronic agreements. An electronic agreement must be established through the form of electronic signatures as the basis of assent. This form of agreement can be made by creating acceptance forms for the prospective user to use for agreement on the terms and conditions. This will ensure that the company and its users have mutually agreed about the company’s services and policies before registration for the company’s services. T he Canadian and European legal systems have similarities with the one implemented in the United States regarding online contracts. It draws from the procedures of written physical contracts, like in the United States. Contracts need to have a mutual agreement between two parties and proper considerations need to be established where there is an exchange of offers with value. Also, these online contracts need to be clarified to avoid complaints about the company’s listed terms and conditions. Unfair treatments to the user can be filed if the online contract does not carefully explain in detail about a user’s right when using the website. In the United Kingdom, a citizen filed a complaint against the terms and conditions of //UK Online Limited//. In January 2006, this citizen filed a complaint against //UK Online Limited// regarding unfair contract terms. The complaint shows that the agreement online is “potentially unfair under Regulation 7, because the term was expressed in language which was neither plain nor intelligible” (Ofcom Organization, May 2006). //UK Online Limited// discussed about the warranty of a software product, but it was intentionally hard for customers like the plaintiff to understand. The court deemed that the agreement is hard to understand because it violates the //Consumer Contracts Regulations 1999//. Within the law, contracts need to be “sufficiently defined by the parties so that the contract can be enforced, ”(CBS Frontpage Denmark, 1999). A contract is agreed upon only if both parties have a clear understanding about the use of the service. The social networking website needs to establish clear explanations about its terms and conditions to its prospective users prior to registration. A more explicit and detailed terms and conditions listing will avoid complaints about unfair contract terms, especially because the website deals with e-commerce and its users self-developed widgets. Online contracts need to be as explicit as possible to avoid confusion and complaints from the users. These detailed descriptions of the terms and conditions have to be easily accessible to the users prior, during, and after the registration. This will help communicate the rights of the company and the rights of the user. Easy access to the terms and conditions will allow the website creator and its users to be more informed about the laws that protect them when creating and mutually signing an online contract.
 * Online Contracting**