Join the Cyberspace Law Committee at the ABA 2004 Annual Meeting

Sunday, August 08, 2004

Working Group on Electronic Contracting Practices

The Lottery Case
The Working Group opened its meeting with a discussion of unilateral modifications of contract terms. The first item for discussion was a Michigan case involving the interpretation of a contract for a subscription to a lottery. Paulsen v. Bureau of State Lottery, 421 N.W.2d 678 (Mich.App. 1988). The plaintiff purchased the ability to play the same lottery number for 52 drawings. The contract clearly stated it's terms were subject to the rules and directives of the Bureau of State Lottery. After the contract was signed, the Bureau decided to hold drawings twice a week, rather than once per week. Thus, reducing the period of weeks, but not the number of drawings, in which the Plaintiff would participating in the lottery with their pre-chosen lottery number. The plaintiff relocated before the change in terms occurred and did not receive the mailed notice of the change from the Bureau. Later, the Plaintiff's regular lottery number was selected in a $3.6 million lottery. The Plaintiff notified the Bureau her number was selected. The Bureau responded that her pre-purchased 52 drawings had all been used a few short weeks prior. The Plaintiff sued and lost. The court held the change in the lottery schedule was not an impermissible modification of the contract and that making the contract subject to the rules, regulations, and directives of the Bureau was not unconsciounable.

Effective Email Notices
The group also discussed a recent case in Massachusetts in which the court held that email was not an effective way to provide a binding notice to company employees. See It's Official--You Don't Have to Read Your Boss's Emails (Steptoe & Johnson’s Ecommerce Law Week, 3 July 2004).

Elaine's Article
Elaine Ziff and Hawa Allan of Skadden Arps distributed a recent paper they concluded for the Working Group on Using Opt-In or Opt-Out Mechanisms to Obtain Customer Assent to Modifications of Standard Form Electronic Arguments. The article contains numerous examples of real situations where these principles were at work.

John's Article
During the meeting, John Tomaszewski commandeered my computer and dug up an old article he wrote many years ago on a similar topic. John P. Tomaszewski, The Enforceability of Adhesive Arbitration Clauses in International Software Licenses, 3.1 J. Tech. L. & Pol'y 4 (1997).

The Group also mentioned that we may want to look closely at the applicability of the legal doctrine of novation. In other words, when terms change on a Web site, are you modifying a prior agreement or are you entering into a new agreement?

Next Steps
The group will probably begin working on a detailed draft of a PowerPoint presentation for use at the January meeting. We will likely create the presentation draft using the LawHub' collaboration tools. Look for an announcement to the group via the listserve.