eContractvincent gautrais

associate professorfaculty of law

university of montreal

May 7th, 2007

university of montreal chair in e-Security and e-Business law

www.gautrais.com

What’s a contract?

Usually …

Offer + acceptance

A B

Usually …

1386 CCQ.  The exchange of consents is accomplished by the express or tacit manifestation of the will of a person to accept an offer to contract made to him by another person.

It’s too..

information + sanction

In other words…

communication + security

Examples

VOCAL PAPER ELECTRONIC

LOW

• phone • tablecloth• fax

• email

MEDIUM

• sale contract between two professionals

• signed contract • email with aknowledgment

HIGH

• Hammurabi code• Wedding Contract • Saxon Real Estate Sale ( 100 B.C.)

• notarial deed • contract using PKI• contract using Third Party

communicationsecu

rity

Very simple unless…

1385 CCQ.  A contract is formed by the sole exchange of consents between persons having capacity to contract, unless, in addition, the law requires a particular form to be respected as a necessary condition of its formation, or unless the parties require the contract to take the form of a solemn agreement.

Unless…

Writing

Signature

Original

EX: Bill of lading, evidence, etc.

EX: License, arbitration

Clause, consumer contract, etc

EX: Some Contracts,

evidence, etc.

As we see in 1385 CCQ, 2 main questions

1 – Formalism

2 – eConsent

1

Formalism and eContract

United Nations Convention on the Use of Electronic Communications in International Contracts (2005) (CUECIC)

Why a such convention?

1) Remove legal obstacles to eCommerce

2) Remove uncertainty

3) Provide uniform solutions

Convention Content?

1) Generality – Definitions (art. 4) – Exclusions (art. 2) – Party Autonomy (art. 3) – Interpretation (art. 5)

2) Form Requirements– Writing – Signature – Original

3) eContract Formation

1.

2.

Form Requirements

• Writing

• Signature

• Original

1.

Writing

art 9 (2). Where the law requires that a communication or a contract should be in writing, or provides consequences for the absence of a writing, that requirement is met by an electronic communication if the information contained therein is accessible so as to be usable for subsequent reference.

1.A

Writing

What’s is accessible so as to be usable for subsequent reference?

1.A

Writing - Example

"Subsequent Reference"

• A law asks me to concluded a contract with a writing

• I concluded the contract "online" • 3 months after, my partner ask me a copy of

the contract• It’s my obligation to send it to him

1.A

Writing, but…

Some countries doesn’t use this Condition

1.A

Example

2838 CCQ.  In addition to meeting all other legal requirements, the integrity of a copy of a statute, an authentic writing, a semi-authentic writing or a private writing drawn up in a medium based on information technology must be ensured for it to be used to adduce proof in the same way as a writing of the same kind drawn up as a paper document.

1.A

Writing

Subsequent Reference

versus

Integrity

1.A

simple Signature

United Nations Convention on the Use of Electronic Communications in International Contracts (2005)

9. 3. Where the law requires that a communication or a contract should be signed by a party, or provides consequences for the absence of a signature, that requirement is met in relation to an electronic communication if:

• (a) A method is used to identify the party and to indicate that party’s

• intention in respect of the information contained in the electronic communication;

1.B

Signature

1) Identity of the signatory

2) Intention to sign

1.B

simple definition

Quebec and Civil Code of Quebec (1994)

2827 CCQ.  A signature is the affixing by a person, to a writing, of his name or the distinctive mark which he regularly uses to signify his intention.

1.B

simple definition

Ontario and Electronic Commerce Act (2000)

1.B

simple definition

British Columbia and Electronic Transaction Act (2001)

1.B

But …

1.B

not so simple definition

law ask some help from IT …

1.B

not so simple definition

Laws proposed technical additional conditions

1.B

laws refer sometimes to…

liability

1.B

liability signature obligation

United Nations Convention on the Use of Electronic Communications in International Contracts (2005)

9. 3. and(…) (b) The method used is (…) :(i) As reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement;

1.B

liability signature obligation

Ontario and Electronic Commerce Act

(…) • (a) the electronic signature is reliable for the

purpose of identifying the person; and• (b) the association of the electronic signature

with the relevant electronic document is reliable.

1.B

liability signature obligation

British Columbia and Electronic Transaction Act

(…) • 21 (d) prescribing records or classes of records for which

a requirement under law for the signature of a person must be satisfied by an electronic signature and proof that, in view of all the circumstances including any relevant agreement and the time the electronic signature was made,

• (i)  the electronic signature is reliable for the purpose of identifying the person, and

1.B

laws refer in other cases to…

Security procedures

1.B

Uniform Electronic Transaction Act (USA)

“the use of security procedures is simply one method for proving the source or content of an electronic record or signature. A security procedure may be technologically very sophisticated, such as an asymetric cryptographic system. At the other extreme the security procedure may be as simple as a telephone call to confirm the identity of the sender through another channel of communication. It may include the use of a mother's maiden name or a personal identification number (PIN). Each of these examples is a method for confirming the identity of a person or accuracy of a message.”

1.B

very few cases

what’s fiability ?

what’s a good security procedure ?

1.B

Original

4. Where the law requires that a communication or a contract should be made available or retained in its original form, or provides consequences for the absence of an original, that requirement is met in relation to an electronic communication if:

(a) There exists a reliable assurance as to the integrity of the information it contains from the time when it was first generated in its final form, as an electronic communication or otherwise; and(b) Where it is required that the information it contains be made available, that information is capable of being displayed to the person to whom it is to be made available.

1.C

Original

5. For the purposes of paragraph 4 (a):(a) The criteria for assessing integrity shall be whether the information has remained complete and unaltered, apart from the addition of any endorsement and any change that arises in the normal course of communication, storage and display; and(b) The standard of reliability required shall be assessed in the light of the purpose for which the information was generated and in the light of all the relevant circumstances.

1.C

eContract Formation

• Minimalist Approach

• Don’t Touch Usual Contract Concept

• Party Autonomy

2.

eContract Formation

• Time and place of dispatch and receipt of electronic communications

• Use of automated message systems for contract formation

2.

Time and Place of dispatch and receipt is different from Time and Place of conclusion !

1387 CCQ.  A contract is formed when and where acceptance is received by the offeror, regardless of the method of communication used, and even though the parties have agreed to reserve agreement as to secondary terms.

2.A

INF

OR

MA

TIO

N

RE

CE

PT

ION

EM

ISS

ION

DE

CL

AR

AT

ION

A B Offer

Acceptance

2.A

Time and place of dispatch and receipt of electronic communications

• The time of dispatch of an electronic communication is the time when it leaves an information system under the control of the originator

• The time of receipt of an electronic communication is the time when it becomes capable of being retrieved by the addressee at an electronic address designated by the addressee.

2.A

Time and place of dispatch and receipt of electronic communications

• Presumption of the document dispatched => place of business

• Presumption of the document received => place of business

2.A

Automated Contract

• It’s Legal!– A contract formed by the interaction of an automated

message system and a natural person, or by the interaction of automated message systems, shall not be denied validity or enforceability on the sole ground that no natural person reviewed or intervened in each of the individual actions carried out by the automated message systems or the resulting contract.

• The capacity problem is solved• But…

2.B

What’s an Automated Contract?

• Could be quite complex technologies as:– EDI – Software

• Could be very simple (common) ones as: – Commercial Website Form

2.B

Complex Automated Contract

• Communication Contract prior to Automated Contract

• Examples– EDI Communication Contract

• Duration • Evidence Convention • Etc.

2.B

Simple Automated Contract 2.B

Contract BetweenAmazon (Seller

+AutomatedManager)

and Me

(Buyer +

Real User)

Simple Automated Contract2.B

Amazon Me

Simple Automated Contract

(UN Convention – art. 14)

Where a natural person makes an input error in an electronic communication exchanged with the automated message system of another party and the automated message system does not provide the person with an opportunity to correct the error, that person, or the party on whose behalf that person was acting, has the right to withdraw the portion of the electronic communication in which the input error was made

+ 2 conditions- User diligence- No User Advantage

2.B

Conclusions

• UN Convention create a minimalist Legal Base

• Important to develop this Least Common Denominator

2.B

2

eConsent

Consent is …

1) communication

2) acceptance

1

2

1399 CCQ

« Consent may be given only in a free and enlightened manner.  »

1

Legibility

Contract = Information

1

But..

At least 10 pathologicalcontractual practices

1

1 - Readability 1

2 - Dynamic

7. Privacy; Monitoring the ServicesWe are under no obligation to monitor the services, but we may do so from time to time and we may disclose information regarding User’s use of the Services for any reason and at our sole discretion in order to satisfy applicable laws, regulations, governmental requests, or in order to operate and deliver the Services in an effective manner, or to otherwise protect us and our Users. We agree to comply with the terms of our Privacy Policy as set forth on our FAQ website, as it may be amended from time to time.

1

3 - Lenght 1

Information = oxygen

1

Feldman v. Google (April 2007)

« AdWords Agreement gave reasonable notice of its terms. In order to activate an AdWords account, the user had to visit a webpage which displayed the Agreement in a scrollable text box. (…) the text of the AdWords Agreement was immediately visible to the user, as was a prominent admonition in boldface to read the terms and conditions carefully, and with instruction to indicate assent if the user agreed to the terms. That the user would have to scroll through the text box of the Agreement to read it in its 14 entirety does not defeat notice because there was sufficient notice of the Agreement itself and clicking “Yes” constituted assent to all of the terms. The preamble, which was immediately visible, also made clear that assent to the terms was binding. The Agreement was presented in readable 12-point font. It was only seven paragraphs long – not so long so as to render scrolling down to view all of the terms inconvenient or impossible. A printer-friendly, full-screen version was made readily available. The user had ample time to review the document. »

4 - Hyperlinks

Linearity versus hyopertextuality

1

5 - Where’s the e-contract ? 1

6 – Multiple Legal Documents

Copyright Privacy Cookies Terms and Conditions of Sale Terms of UseLimited WarrantyService ContractsHardware Technical Support PolicyEtc.

1

7 - Legal Terminologies

THE SERVICES PROVIDED BY US ARE PROVIDED "AS IS." WE MAKE NO WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, OR ANY WARRANTY REGARDING THE RELIABILITY OR SUITABILITY FOR A PARTICULAR PURPOSE OF ITS SERVICES. USER UNDERSTANDS AND ACKNOWLEDGES THAT WE EXERCISE NO CONTROL OVER THE NATURE, CONTENT OR RELIABILITY OF THE INFORMATION AND/OR DATA PASSING THROUGH OUR NETWORK. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY US, ITS DEALERS, AGENTS OR EMPLOYEES SHALL CREATE A WARRANTY AND USER MAY NOT RELY ON ANY SUCH INFORMATION OR ADVICE. WE MAKES NO WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, REGARDING THE QUALITY, ACCURACY OR VALIDITY OF THE INFORMATION AND/OR DATA RESIDING ON OR PASSING THROUGH ANY NETWORK. USE OF ANY INFORMATION AND/OR DATA OBTAINED FROM OR THROUGH SERVICES PROVIDED BY US WILL BE AT USER’S OWN RISK. USER ACKNOWLEDGES THAT WE ARE NOT LIABLE FOR ANY ERRORS OR INTERRUPTION IN THE INSTALLATION PROCESS OR IN PROVIDING THE SERVICES, WHETHER WITHIN OR OUTSIDE THE CONTROL OF US. UNDER NO CIRCUMSTANCES SHALL THE USER HOLD US OR ANY OF OUR AGENTS, CONTRACTORS OR REPRESENTATIVES RESPONSIBLE FOR ANY FORM OF DAMAGES OR LOSSES (INCLUDING WITHOUT LIMITATION ANY DIRECT, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES OR LOSSES) SUFFERED FROM, BUT NOT LIMITED TO ERRORS, DELAYS, LOSS OF INFORMATION, DELAYS IN THE INSTALLATION OR PROVISIONING PROCESS, OR INTERRUPTIONS IN THE SERVICES CAUSED BY THE USER, US OR A THIRD PARTY’S NEGLIGENCE, FAULT, MISCONDUCT OR FAILURE TO PERFORM. USER UNDERSTANDS THAT TELECOMMUNICATION AND/OR NETWORK ACCESS SERVICES MAY BE TEMPORARILY UNAVAILABLE FOR SCHEDULED OR UNSCHEDULED MAINTENANCE AND FOR OTHER REASONS WITHIN AND OUTSIDE OF THE DIRECT CONTROL OF US. UNDER NO CIRCUMSTANCES DO ANY SUCH ERRORS, DELAYS, INTERRUPTIONS IN SERVICES OR LOSS OF INFORMATION NULLIFY OR MODIFY THESE TERMS AND CONDITIONS. WE RESERVE THE RIGHT TO REFUSE OR TERMINATE SERVICES TO A USER AT ANY TIME WITHOUT CAUSE. THE INTERNET CONTAINS UNEDITED MATERIALS, WHICH MAY BE SEXUALLY EXPLICIT, OR MAY BE OFFENSIVE TO YOU OR OTHERS ACCESSING THE SERVICES. WE HAVE NO CONTROL OVER SUCH MATERIALS AND ACCEPT NO RESPONSIBILITY FOR SUCH MATERIALS.

1

7 - Legal Terminologies 1

8 – Non-legal Titles

consumer contract • terms of Services • conditions of Use• conditions of Sale • notice • legal • waiver • licence • etc.

Privacy « contract » • privacy • confidentiality • FAQ• security• legal• waiver • licence • notice• etc.

1

9 – Abusives Clauses 1

10 – Stupid Clauses

DELL (INCLUDING DELL’S PARENTS, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS) DOES NOT ACCEPT LIABILITY BEYOND THE REMEDIES SET FORTH HEREIN, INCLUDING ANY LIABILITY FOR PRODUCTS NOT BEING AVAILABLE FOR USE, LOST OR CORRUPTED DATA OR SOFTWARE, PRODUCTS SOLD THROUGH DELL’S SOFTWARE AND PERIPHERALS DIVISION, OR THE PROVISION OF SERVICES OR SUPPORT. DELL WILL NOT HAVE ANY LIABILITY FOR ANY DAMAGES ARISING FROM THE USE OF THE PRODUCTS IN ANY HIGH RISK ACTIVITY, INCLUDING, BUT NOT LIMITED TO, THE OPERATION OF NUCLEAR FACILITIES, AIRCRAFT NAVIGATION OR COMMUNICATION SYSTEMS, AIR TRAFFIC CONTROL, MEDICAL SYSTEMS, LIFE SUPPORT OR WEAPONS SYSTEMS. DELL WILL NOT BE LIABLE FOR LOST PROFITS, LOSS OF BUSINESS, OR OTHER INCIDENTAL, INDIRECT, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY THIRD PARTY EXCEPT AS EXPRESSLY PROVIDED HEREIN.

10 – Stupid Clauses

« Do not use the ING DIRECT Web Site to communicate to others, to post on the ING DIRECT Web Site, or otherwise transmit to the ING DIRECT Web Site, any materials, information, or communication that either causes any harm to any person or that is illegal or otherwise unlawful, including without limitation any hateful, harassing, pornographic, obscene, profane, defamatory, libellous, threatening materials which constitutes or may encourage conduct that would be considered, a criminal offence, give rise to civil liability, promote the excessive, irresponsible or underage consumption of alcohol, or otherwise violate any law or regulation.  »

10 – Stupid Clauses

« The limited warranty set forth below is given by Canon U.S.A., Inc. (Canon U.S.A.) in the United States or Canon Canada Inc., (Canon Canada) in Canada with respect to the Canon-brand PowerShot Digital Camera purchased with this limited warranty, when purchased and used in the United States or Canada. »

10 – Stupid Clauses

11. Governing Law

This Agreement is governed by the law of Sharp’s Audio Visual.

some simple solutions

• Short

• Plain english

• Humanity

• Slow

• Visual

1

Good Example:

www.creativecommons.ca/

1

1399 CCQ

« Consent may be given only in a free and enlightened manner.  »

2

A. Shrink wrap

B. Click wrap

C. Browse wrap

2

1 - shrink wrap2.A

ProCD (US - 1996) King (Canada - 1989)

2 - Click wrap – Dell Case

• Dell Computer c. Union des consommateurs - Supreme Court decision (May or June 2007)

• 2 main questions– Arbitration and Consumer Contract – eContract Validity

2.B

Click 1

Click 2

Click 3

Click 4

3 - Browse wrap 2.C

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2.C

Conclusions

• Law need "culture" (Old Law)

• Law needs "creation"  (New Law)

vincent.gautrais@umontreal.ca

www.gautrais.com