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    What Does It Mean When You Click "I Agree"?


    © International Trade Centre, International Trade Forum - Issue 4/2002

    Interview with Michael Geist

    Ignoring the small print when buying and selling through the Internet might cost you money. More and more courts are upholding electronic agreements which are based on easy-to-find terms that buyers have to accept explicitly, such as by clicking an "I agree" button.

    For many businesses, the legal issues associated with an Internet presence are little more than an afterthought. Web site designers, content creators and marketers typically push the legal terms off the main page and into the background.

    Although the desire to ignore the fine print is understandable, recent legal developments suggest that it is risky. Since businesses and consumers crave certainty, both are increasingly looking for the answer to the question: "What does it mean when a customer clicks 'I agree'?" The following interview with Michael Geist, a law professor specializing in Internet and e-commerce law, provides some answers.

    Q What are the most important elements of e-commerce law?

    A The most important elements relate to fundamental components of all commercial transactions - how to ensure that a contract is valid and enforceable.

    The building blocks of e-commerce law, therefore, focus on ensuring that an online contract is as valid and enforceable as one agreed offline and that the parties can be held to their bargains.

    Q What are the different forms of e-commerce contracts?

    A There are two main forms of e-commerce contracts - business-to-consumer contracts, known as B2C contracts, and business-to-business contracts, known as B2B contracts.

    Q What are the primary concerns in creating B2C contracts?

    A Firstly, the global scope of the Internet and the many jurisdictions in which a business could potentially be involved in electronic transactions create significant jurisdictional concerns. Accordingly, companies use these agreements to limit the jurisdiction(s) whose laws will govern the transaction.

    Companies also seek to minimize their exposure to liability by addressing issues related to technological risks, such as data security, privacy and service availability.

    Q Are there global standards that govern the validity of e-commerce contracts?

    A Yes. The UNCITRAL Model Law on Electronic Commerce, approved in 1996, sets the general conditions for e-commerce contract validity. UNCITRAL is the United Nations Commission on International Trade Law, established to harmonize international trade law by creating accessible, predictable and unified commercial laws.

    Q Does the Model Law address the legal effect of clicking "I agree" on a web site?

    A Yes. The Model Law confirms that clicking an "I agree" icon on a web site may constitute a valid form of consent. It provides that, unless the parties agree otherwise, an offer or acceptance of an offer can be expressed in electronic form.

    Q How is the Model Law implemented nationally?

    A It falls to each individual country to enact the Model Law into its own national law. E-commerce statutes throughout North and South America, Europe, Africa and Asia have all followed the same standard.

    Q Should developing countries enact the Model Law?

    A Absolutely. Electronic commerce presents opportunities for businesses in developing countries to access new markets at a fraction of the cost of traditional approaches. Countries as diverse as Colombia, Thailand and Tunisia have enacted national laws based on the international standard.

    Q Does the existence of e-commerce laws mean that courts will always enforce electronic contracts?

    A No. Just as paper-based contracts are not necessarily valid because they are written on paper, electronic contracts are not necessarily valid because of the presence of e-commerce laws.

    Q When will courts refuse to enforce electronic contracts?

    A Courts in most countries tend to consider whether the parties freely accepted the contract, with full awareness of its terms. Therefore, sellers need to show that a buyer has explicitly agreed to the contract terms, for example, by clicking on an "I agree" button.

    Courts are also reluctant to enforce online contracts if the terms are not easily identifiable because they are in very small text or in obscure locations on a web site.

    Q Are courts aware of the importance of electronic contracts?

    A Some are. For example, in one Canadian case, the court upheld the validity of an electronic contract, noting that failure to do so "would lead to chaos in the marketplace, render ineffectual electronic commerce and undermine the integrity of any agreement entered into through this medium".

    Q What future e-commerce contracting developments are likely to occur?

    A UNCITRAL recently established a Model Law on Electronic Signatures that is likely to emerge as the global standard. Several countries, including Hungary, have already enacted that Model Law into their national law and more are likely to follow.

    In addition, work is ongoing at the Hague Conference on Private International Law on an international treaty on Jurisdiction and the Enforcement of Judgements, while the Organisation for Economic Co-operation and Development (OECD) has been very active in working towards a global agreement on e-commerce taxation regulations.

    Michael Geist (mgeist@uottawa.ca) is a law professor at the University of Ottawa, Canada, specializing in Internet and e-commerce law. He is also technology counsel with the Canadian law firm Osler, Hoskin and Harcourt LLP. Mr. Geist is the author of ITC's E-Commerce Legal Kit.

    ITC's E-Commerce Legal Kit

    The E-Commerce Legal Kit provides legal tools and materials on the operational legal aspects of e-commerce. The kit is primarily designed for private sector operators, including small and medium-sized enterprises, lawyers and professionals working in trade information and advisory and training services. It may also be of interest to public sector officials developing policies for a secure e-commerce environment.

    The kit features four components: a printed guide, an e-law reference library, sample contracts and PowerPoint presentations, with the latter three available on CD-Rom. The guide and CD-Rom are designed to be used in coordination.

    The guide comprises three short books written in question-and-answer format:

    • Volume 1, Global E-Commerce Law, is an introduction to the main institutions, legal texts and legal issues.
    • Volume 2, E-Commerce Contracting, describes eight different contracts, four related to developing a web presence and four to operating online.
    • Volume 3, Case Studies, presents four situations where legal advice is sought, with possible answers. They are meant to test the reader's ability to draw practical knowledge from Volumes 1 and 2.

    The CD-Rom contains the full text of laws, conventions and other material referred to in Volume 1 and the full text of contracts analysed in Volume 2. It also features PowerPoint presentations, which can be adapted to meet the specific needs of trainers or professionals presenting e-commerce law issues.

    For more information on ITC's training activities on e-commerce law, contact Jean-François Bourque (bourque@intracen.org).