Something Old, Something New, Something Borrowed...The Marriage of High Tech and Traditional Jurisprudence

Originally published Wednesday, December 01, 1999

If I could offer you only one tip for the future, sunscreen would be it. The long-term benefits of sunscreen have been proved by scientists, whereas the rest of my advice has no basis more reliable than my own meandering experience. I will dispense this advice now.

Computer screens across the United States lit up with these amusing words last year. And, according to the rest of the message, so did the graduating class of M.I.T., as author Kurt Vonnegut, Jr. allegedly uttered these remarks at the opening of his commencement speech to the school's graduating class.

There was just one little problem. Vonnegut never actually uttered these words. In reality, the text appeared in a Chicago Tribune column. To this day, while rumor abounds on the web, the origin of this mythical attribution to Vonnegut remains unknown.

Most aspects of modern life are affected, even effected, in some way by advances in electronic communications. The development of the law and legal practice will be no exception. While litigation did not arise out of the parody of Vonnegut or the piracy of posting the Tribune's column, this example illustrates a hazard awaiting some of those venturing into the cyber-realm -- its potential unverifiability.

From contracts to crime, electronic communications issues permeate the daily practice of lawyers, judges and litigants. It remains to be seen whether these issues will be governed by traditional principles of law, or whether a new body of law will be fashioned around technological advances.

For example, the foundation of commercial law is a contract that reflects the "meeting of the minds" and is "signed, sealed and delivered." But in the context of the burgeoning e-commerce industry, a host of legal questions are prompting lawyers and lawmakers to wrestle with applying traditional contract principles to a new realm. Legal questions abound, such as:

- Is a statement on a web site an offer or a solicitation of an offer? In either case, what are the terms?

- What is a "signature" in a contract negotiated and closed via e-mail, and when is the contract "delivered"?

- If assent is indicated through the click of a computer's mouse, where

- Which state's laws apply?

- What happens if the transmission is garbled?

- How does the mailbox rule apply to the e-mail system, which relies upon numerous independent Internet service providers? What about automated transactions?

Automated contracting is inconsistent with traditional notions because of the lack of human involvement - intent of the parties, mutual mistake, parol evidence, etc.

Under the UCC, an offer may be accepted in any manner "reasonable" under the circumstances. Online vendors have attempted to capitalize on this provision - and avoid some of the electronic-contracting problems - by requiring an online purchaser to click his or her acceptance of the terms of the offer, applicable warranties and disclaimers.

But these "clickwrap" and "web-wrap" agreements implicate a more fundamental question of enforceability. For example, these agreements have drawn fire for attempting to unilaterally to bind Internet users to licensure commitments, notice provisions, and other contractual acknowledgments. Critics question the fairness of these contracts because of the absence of bargaining power by the offeree, who usually performs his or her end of the bargain before seeing the terms of the license -- if they ever even bother to read them - and lacks any market power to reject the offer. Nevertheless, some courts have upheld shrinkwrap agreements. See, e.g., ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996).

What happens when a small business owner purchases critical software via the Internet that fails and cripples his or her business? Will the court hold that the small business owner was bound by the broad liability disclaimers of the clickwrap license agreement?

Statute of Frauds

How will electronic agreements fare with the statute of frauds? One of the few "black letter" law principals taught in law school was that, to be enforceable under the UCC, some agreements must be in writing, such as agreements for the sale of goods in excess of $500. In the Internet context, what is a writing? The growing trend is for online sellers to confirm orders from purchasers via e-mail. However, this may not satisfy the statute of frauds.

What is a sufficient "signature?" A signature is generally any mark created with the intent that it be considered a signature. Some systems use PINs to authorize the computer to create a mark constituting a signature. Other systems require the user to complete a particular field or click on a particular icon that indicates an intent to "sign" the document or agree to its terms. A digital "signature" raise obvious evidentiary concerns.

For example, how do you confirm the authenticity of an electronic signature? Public key encryption and digital signatures offer ways to ensure reliability and protect against forgery and unauthorized contractual alterations. A "hash code," or numerical figure similar to a "character count," allows online vendors to compare electronic messages to determine whether any changes have been made to a message purportedly received from a customer.

However, the United States and other countries have banned the exportation of sophisticated encryption technologies in the interest of protecting citizens from terrorist and criminal activity. Critics argue that relegating e-commerce vendors to easily breakable encryption codes will retard the worldwide development of international commerce. On May 6, 1999, the Ninth Circuit Court of Appeals declared source code to be protected speech under the first amendment, invalidating the federal ban on the export of strong encryption programs.

Torts

Obviously, contracts are just one area affected by the growing infiltration of high-tech communication devices. Predictably, Internet publications have spawned numerous lawsuits asserting a colorful variety of theories. While traditional content providers are savvy about publishing-related risks, many businesses are venturing into foreign territory fraught with potential hazards. Their risks are compounded by the increase in both the size of their audience and the number of jurisdictions in which they may be sued. Does greater access to potentially actionable statements by Internet users equal greater foreseeable harm and therefore greater damages?

To complicate matters further, the ease of online communication reduces the potential quality and accuracy of information on any particular web site. "The web, as a universe of network accessible information, contains a variety of documents prepared with quite varying degrees of care, from the hastily typed idea, to the professionally executed corporate profile." ACLU v. Reno, 929 F. Supp. 842, 837 (E.D. Pa. 19960, aff'd, 521 U.S. 844 (1997). For some reason, net surfers perceive that information posted to the Internet is the gospel truth. However, another reason to view online information suspiciously is anonymity. Recall the recent run of complaints filed against AOL and Yahoo! to compel the identification of anonymous subscribers.

The phenomenon of "immortal content" also makes tort litigation resulting from online speech more likely. It is next to impossible to eradicate defamatory or infringing material once available online. Just ask singer Mariah Carey - she was quoted on the Internet as making an insensitive comment about starving children. This fake quote, attributed to her as a joke, spread so rapidly that several wire services reported it as fact. How many recent e-mails have promised you a free trip to Walt Disney World if you forward the message to your closest friends and co-workers? (In case you haven't heard, this is a hoax!)

So who will be liable for online speech? The complexity of this seemingly simple question is revealed by a brief discussion of how online speech may be communicated and distributed. Basically, there are three types of online operators: publishers, distributors, and shared message areas. Publishers have editorial control. They select the data, organize it, present it, and correct it. A public discussion group may be a "publisher" if it deletes undesirable messages, relocate messages, and shut down other discussions. Public discussion groups that are closely and regularly monitored and edited by the operator may be considered publishers, with the operator's role comparable to that of an editor.

Distributors may send electronic mail, computer files, etc. Transmitted materials may include computer programs, text, databases, image and sound files. Transmissions may consist of rapid-fire, real time "chat," or the snail's pace of downloading massive computer files. Unlike publishers, who may make editorial changes, online systems typically transmit materials between users unchanged. Traditionally, distributors are not held liable for the contents of the delivered publications unless they are actually aware of those contents. Do online systems act more like distributors or publishers?

Defamation

This publisher-distributor analysis resulted in a disturbing decision penalizing Prodigy for taking steps to screen content posted on its "family friendly" service. In reaction to this decision, Congress attempted to resolve the publisher/distributor question by enacting Section 230 of the Communication Decency Act. Under these "Good Samaritan" provisions, interactive computer service providers will not be treated as the publisher of any information provided by another information content provider nor be held liable for any action voluntarily taken in good faith to restrict access to objectionable material.

Is it fair to conclude that ISPs are subject to a different standard of liability than their print counterparts? The judicial answer has been a resounding "yes" - despite skepticism...