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The Legal Architecture of Virtual Stories: World Wide Web Sites and the Uniform Commercial Code

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The Legal Architecture of Virtual Stories: World Wide Web Sites and the Uniform Commercial Code The Legal Architecture of Virtual Stores: World Wide Web Sites and the Uniform Commercial Code WALTER A. EFFRoss· TABLE OF CONTENTS I. INTRODUCTION • • • • • • • • • • • . • • • . • • • . • . • . • • • • • • • • • • • • 1266 II. JUST BROWSING: VISITING A COMMERCIAL WEB SITE • • • . • • . • • • • 1289 A. Reaching the Home Page • • • • . • . • . • . • . • . 1290 B. "Drilling Down" to a Product . • . • . • . • . 1294 J. Browsing • . • . • . • . • • . • . • . • 1295 a. Profiling • . • . • . • • • • . • • • • • • • 1296 2. Searching • . • • . • . • • . • • . • • . • . • 1297 3. Index Scanning . • . • . • . • . • 1298 III. THE ON-LINE DEFINI110N OF "MERCHANT" • • • • . • • • . • • . • • . • 1298 A. "Business Practices" Merchants . • . • • . • 1301 J. Answering Electronic Mail (E-mail) . • . • • . • • . 1304 2. Periodically Reviewing the Site~ Integrity and Operation • • . • • . • • • • . • • • . • . 1305 3. "Backing Up" Information • • • • . • • • . • • • • • . • • . 1307 " © 1998 Walter A. Effross. Associate Professor, Washington College of Law, American University, and Chair, American Bar Association Subcommittee on Electronic Commerce. The author appreciates the helpful comments of Professor Egon Guttman and the research grants provided by the Washington College of Law. This Article reflects developments through December 31, 1997. The information in this Article is not offered as legal advice, nor does the author endorse or recommend any of the products or sites referred to. 1263 4. Protecting Customer Information in Transit and in Storage • . • • . • • • . • . • • • • • . • • • . • • • • • 1308 5. Sending Co1!firmation by E-mail to the Customer • . • . • • • 1308 6. Clarifying Ambiguities in E-mail Messages • • • • • • • • . • • . 1309 7. Monitoring "On-Site" Forums • • . • . • . • • . • . • • • • 1310 B. "Goods" Merchants . • • • • • • . • • . • • • . • • • • . • • • . • • 1310 C. "Business Practices" or "Goods" Merchants • • • . • • • • • • . • • • 1314 D. Draft Revised Article 2 and Draft Article 2B Definitions ofMerchant .. .. • . .. • . • . • • .. • . .. • .. • .. • 1315 J. "Consumers" and Their Transactions . • • . • . • • . • • . • • 131S E. Attaining "Merchant" Status Through Linking to a Merchant's Site • . • • . • • • . • • . • . • • • . • • 1317 F. Attaining "Merchant" Status Through Meta-Tags • • • • . • . • 1319 G. Firm Offers . • . • • • . • • • . • • • • . • • . • • • • • • . 1320 Iv: CHECKING Our: ACCEPTING ON-LINE ORDERS ..•..•..• , • . • • • 1322 A. Means of Ordering . • • • . • • • • • • • • . • . • • • 1322 1 Off-Line Messages . • . • . • . • . • . • • • • . • . • . • 1322 2 E-mail Messages • • • • • • • . • . • . • • • • . • • • • . • . • • . • • 1323 3. Electronic Order Forms • • • • . • . • • . • • • . • . • • • • 1324 V. CONTRACT FORMATION ON THE WEB • • • • • • • • • • • • • • • • • • • • • • • 1328 A. Manner ofForming a Contract . • • • • • . • • • • . • 1328 J. Article 2: Any Manner Sufficient to Show Agreement • • . • . 1328 a. Owner's Offer to Sell, or Visitor's Offer to Buy? • • • • • 1329 2. Draft Revised Article 2 and Draft Article 2B: Any Manner, Including Electronic Agents . • • • • • . • • . • • . I 332 B. Statute ofFrauds . • . • • • . • • • • . • • • . • . • . • • • • • . • • . • 1336 1. Article 2 . • . • . • • • • . • • • . • • . • . • • • • • . 1337 a. The "Merchant's Exception" . • • . • . • • • . • . • • 1339 2. Draft Revised Article 2 and Draft Article 2B . • • . • . • • • • 1340 C. Binding the Unwary Consumer........................ 1343 J. Article 2: Unconscionability. • • . • • • • • • . • • • • • • . • . • . 1343 2. Draft Revised Article 2: Consumer Contracts . • • • • . • . • 1343 3. Draft Article 2B: Mass-Market Licenses . • . • • • • . • . • . 1344 D. The Battle of the Forms . • • .. .. • . .. .. • • • . .. • . 1346 1. Article 2 • . • . • . • . • • • • • . • • • • . • • • . • • . 1346 2. Draft Revised Article 2 • • • . • . • • • • • . • • . • . • . • 1348 3. Draft Article 2B: Standard Forms . • • . • . • • . • • • . 1349 E. Assent and Conspicuousness: Enforceability of "Shrinkwrap" and "Webwrap" Agreements • • • • • • • • • • . • • . • • . • . • • • . 1351 1. Article 2 . • • • • • • . • • • • • . • • . • • • . • . • . • • • • • 1352 2. Draft Revised Article 2 • • • . • • . • • • • • • . • • • • • . • . • • 1356 3. Draft Article 2B: "Manifesting Assent" Electronically . • • • 13S1 VI. WARRANTY ISSUES . • . • . • • • • • • . • . • • . • • • • • • • . • • 1359 A. 'Jypes of Wa"anties and Their Disclaimer . • . • • • . • • • 1360 1. Article 2 . • • • • . • . • • . • . • • . • • • • . • . • • . • • 1360 a. Express Warranties . • . • . • • • . • • • . • • . • • • • • 1360 b. Implied Warranty of Title.. • • • • . • • • • • • • • . • • 1362 c. Implied Warranty Against Infringement . • • • • • • • • • 1363 d. Implied Warranty ofMerchantability • . • • • . • . • • • . • • 1363 e. Implied Warranty ofFitness for a Particular Purpose. • • . • • . • . • . • • • • . • . • . • • • . • . • . • • 1364 1264 [VOL. 34: 1263, 1997] World Wide Web SAN DIEGO LAW REVIEW 2. Draft Revised Article 2 • . • • . • . • • • • . • 1365 a. Express Wa"anties . • • • • • . • 1365 b. Implied Wa"anties • . • • • • • . • • • • . • • 1366 3. Draft Article 2B • • • . • . • • • • • • . • • • . • . • • • • • • • 1367 a. Express Wa"anties • . • . • . • • • • . • . • • • • . • 1367 b. Implied Wa"anties ofAuthority and Non-Infringement • 1368 c. Implied Wa"anty ofMerchantability . • • . • . • . 1370 d. Implied Wa"anty ofInformational Content • . 1370 e. Implied Wa"anty ofFitness • . • . • • . • . • • • . • . 1371 B. Disclaiming Wa"anties Through a Web Site • . • • . • • . 13n I. The "Copyright Sign" Dodge. • . • • • • • . 1377 2. The Small "Legal" or "Disclaimer" Notice • • • • . • • . 1378 3. Wa"anties ofFitness for a Particular Purpose: Personal Products . • • . • . • . • 1379 VII. JURISDICTIONAL AND CHOICE-OF-LAW ISSUES . • • • • • • • • • • • • • . 1381 A. Cu"ent and Draft Revised Article 2 • • • . • . • • . • • • . 1381 B. Draft Article 2B . • • • • • • . • • . • • . 1382 C. Adopting Draft Article 2B Contractually • . • • • • • . • • . • . • • • • 1385 D. Reasonable Relation . • . • • . • . • • • 1385 1. General Jurisdiction . • . • . • 1386 2. Specific Jurisdiction .. • . .. .. .. .. • . • .. .. .. .. .. 1387 a. Trademark Infringement, Without "Active/Passive" Considerations • • . • . • • • • • • • • . • • • . 1388 b. Web-Based Advertising and Contracting • . • . • . • . 1390 i. Repeated Active Contacts With Forum Residents • • . 1390 ii. Providing "Passive" Web Sites • • • • • . • . 1392 iii. Questioning "Passivity": A Sliding Scale? • • . • . 1394 E. Recommendations . • . • • . • • • • . • . • • . • . • 1397 VIII. CONCLUSION . • • . • • • • • . • • • • . • • . • • . • • • • • • • • • • • • • • • • 1398 APPENDIX. CHECKIJST OF COMMERCIAL LAW ISSUES FOR WEB SITE OWNERS 1399 1265 If you can buy something in person, chances are you can buy it online. 1 New models ofcommercial interaction are develop­ ing as businesses and consumers participate in the electronic marketplace and reap the resultant benefits.2 It is intended to make it possible for the law embodied in [the Unifonn Commercial Code] to be developed by the courts in the light ofunforeseen and new circumstances and practices. However, the proper construction ofthe Act requires that its interpretation and application be limited to its reason. 3 I. INTRODUCTION A major "selling point" of the World Wide Web4 is its ability to offer 1. Tracy LeBJanc, Online Shopping Brings the Mall to You, in PC NOVICE GUIDE TO 001)-IG ONLINE 128, 128 (1997). 2. lNTERAGENCYWORKJNG GROUP ON ELECTRONIC COMMERCE, A FRAMEWORK FOR GLOBAL ELECTRONIC COMMERCE 2 (1997) (available on-line atAbout a Framework for Global Electronic Commerce (visited July 2, 1997) <http://www.whitehouse.gov/WH/New/Commerce/about.html>; cf. KIM KOMANDO, CYBERBuCK$: MAKING MONEY ONLINE 16 (1996) (''Being online doesn't Jet you do new things as much as it Jets you do things in a new way."); Ann Davis, Tangled Web: How the Net Became Land of Opportunity for Legal Profession, WALL ST. J., Oct. 13, 1997, at Al ("Even sophisticated businesspeople," claims one attorney, "mistake the Internet for a world apart from the real world,' where existing laws don't apply."). 3. U.C.C. § 1-102 cmt. I (1996). 4. The Internet system of computer networks was introduced by the federal government in 1969 to link "computers and computer networks owned by the military, defense contractors, and university laboratories conducting defense-related research." ACLU v. Reno, 929 F. Supp. 824, 831 (E.D. Pa. 1996). It has been characterized variously as a "unique and who1ly new medium of worldwide human communication," id. at 844, and ''the most participatory form of mass speech yet developed." Id. at 883. The World Wide Web (the "Web") has been characterized as "a collection of protocols and standards for accessing information on the Internet, [which is] the physical medium used to transport the data." NET.GENESIS & DEVRA HALL, BUILD A WEB S!TB 5 (1995). The Web was created in 1990 by Tim Berners-Lee of CERN, the European Particle Physics Laboratory, and achieved enormous popularity in 1993 with the introduction of Mosaic, the first graphical "Web browser." See ROBERT H. REID, ARCHITECTS OF THE WEB: 1,000 DAYS THAT BUILT THE FuTuRE OF BUSINESS at xxiii­ xv (1997); Robert Wright, The Man Who Invented the Web, TIME, May 19, 1997, at 64, 66 (discussing Mr. Berners-Lee's invention of the "three technical keystones of the Web"); ADAM BLUM, BUILDING
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