The article “E-Contract Formation: US and EU Perspectives” review

ARTICLE SYNOPSIS

The article “E-Contract Formation: US and EU Perspectives” discusses important legal and managerial issues connected with contract formation in Cyberspace. Kierkegaard  (2007) addresses two problems of e-contract formation: legal protection of a potential consumer and unified legal rules for marketers. Also, the author argues that many states in the US do not have binding laws for E- contract Formation. N the USA, e-contract formation is a self-regulation process which negatively affects international companies. E-sign Act and the UETA stipulate norms and principles for E-contract formation but it differs from European legal framework and does not meet changing economic conditions and ‘sectoral’ regulations. “These uniform acts are not binding law in a particular state until the state chooses to adopt the act through its respective legislative process” (Kierkegaard 2007). The author gives detailed overview of electronic contracts and legal issues of e-contract formation. A special attention is given to validity and unfair e-contact terms. The article compares contract law, UETA requirements and international legal systems. Kierkegaard gives a detailed analysis of all important parts of contract formation and discusses their limitations in e-environment. According to laws, all parties should honestly treat contract norms, avoiding misleading or confusing claims. “A horizontal directive is EU legislation designed to cover all types of sectors” (Kierkegaard 2007). The author concludes that the US legal rules and regulations are ‘broader in scope” in comparison with EU laws.

LEGAL ISSUE

The US laws covers different types of computer information contracts which increases number of mistakes and complications in contract formation. EU Directives are narrow in scope dealing with exempting B2B transactions only (Kierkegaard 2007).

MANAGERIAL PERSPECTIVE

The rapid growth of international companies in number and degree of influence has been accompanied by an unprecedented flow of contracts across international borders. Kierkegaard (2007) underlines that self-regulation environment does not meet current security requirements and does not protect US companies from possible mistakes. Thus, “the rationale behind the e-commerce legislations of the EU and the U.S. is similar in that they create legal certainty by validating electronic contracts” (Kierkegaard 2007). Furthermore, the change in the view of information and IT should be accompanied by a change in legal environment. These problems could be avoided if the US develops laws and strict regulations similar to EU Directives which covers a wide range of e-contract norms and rules. This is a crucial step to establish standard specifications for business processes—the ways in which contracts are generated and acted upon once they are received. For example, there will emerge specifications for how purchase orders or contracts get handled. The processes will be described so explicitly that machines can interpret and act upon them (Taylor and Taylor 2007). A number of companies, however, are realizing this pitfall and making information management a line position to the greatest degree possible, motivated by the belief that the IT manager in a line function will contribute directly to the accomplishment of the objectives of the organization. E-commerce laws can improve costs, relationships, channels, processes, and shareholder value is the objective. “American companies competing in Europe must make their offerings relevant and in compliance with EU regulations and national laws of the 25 Member States” (Kierkegaard 2007). Managers should pay a special attention to differences and legal rules of the US and EU legal framework to avoid delays and errors. According to Taylor and Taylor (2007) “potential hazards or problems connected with contract formation, should be identified” (p. 48). Concerns about confidentiality and privacy should always be the major concern of managers. To ensure that contract formation meets all requirements, managers should maintain control and have good knowledge in international and electronic contract formation. International companies must also be aware of what approaches and subjects are considered as acceptable in the EU market, and conform to local requirements.

References

Kierkegaard, S. M. (2007). E-Contract Formation: U.S. and EU Perspectives, 3 Shidler J. L. Com. & Tech. 12. Retrieved 01 May 2007, from http://www.lctjournal.washington.edu/Vol3/a012Kierkegaard.html
Taylor, R., Taylor. D. (2007). Contract Law Directions. Oxford University Press

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