Agents and the Web -- Part II

Agents on the Web -- Part II

Contract formation rules raise novel questions

[This is the second part of a three-part series. click here for Part I]

Before an agent may negotiate on behalf of an athlete, the agent must make an agreement whereby the agent and the athlete agree on the terms and conditions of the agent's representation. Such an agent contract may be subject to certain regulations (from, say, athlete unions or certain statutes), but essentially, it is based on traditional legal concepts.

A contract must contain the following elements: a voluntary and legal agreement, the capacity to contract, and an exchange of promises (known as consideration) [click here]. That is the case whether the contract is drafted on paper or on computer. But contracting via computer raises novel questions which have not been completely answered by statutory or court-made law.

First, such contracts a part of electronic commerce, a term which includes doing business transactions through the sending of a f flie containing the agreement. The most logical way would be to send the agreement as an "attached file" to an e-mail transmission. The recipient would "open" the attached file and "download" it to that person's hard drive in a given computer. Generally, that is a simple process.

But the concept has some elusive aspects. First, is this contract considered a "written" one? Certain types of contracts must be in writing (which include any contract which by its terms cannot be completed within one year from the date it is made). A long-term agent contract without be subject to this rule. But is the computer transmission a "writing?" It is hard to say. Also, such laws require the contract to be "signed." One cannot literally "sign" content in a computer file, at least not in the traditional manner.

Encryption

The leads to the issue of electronic signatures or "encryption." The technology for such signatures exists and likely will be used more frequently in the future. Essentially, it is a series of gibberish (E%2910sd-0sf, or something to that effect) which translates into a discernable identity. It may be used to prevent fraud or forgery. At this time, there is not set standard for encryption, but as such contracts become more prevalent, that could change.

Acceptance

At what point is a contract "accepted." Traditionally, if the offer did not have any specific time and place of acceptance, the rule was that the agreement was "accepted" when it was "dispatched" in a mailbox. With e-commerce, the issue is when does the "dispatch" occur? When the signed agreement is sent? When it is received? or Read? The law not been as clear on this, but it is safe to assume that the traditional rules would apply. But for agents, caution must be exercised. It is best not to utilize such a method, but rather the traditional delivery approaches to prevent problems from occurring. But if an agent wishes to utilize electronic commerce, it is best to include a specific clause as to acceptance, usually at the point of the "click."

The next article will focus on the changing nature of endorsement contracts.