• If you are citizen of an European Union member nation, you may not use this service unless you are at least 16 years old.

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Chapter 19 - E-Contracts


1. International Inventory, Inc., does business online. Contracts may be formed online for the purpose of

a. licensing and sales of goods and services.

b. licensing only.

c. neither licensing nor sales of goods and services.

d. sales of goods and services only.


2. Delta Services, Inc., and E-Products Corporation negotiate a software license. This is

a. a passage of ownership rights to the software.

b. a right to use the software.

c. a passage of ownership rights to, and a right to use, the software.

d. none of the above.


3. Quality Sales Corporation sells its products in contracts entered into online. Quality can protect itself against disputes involving these contracts by making important terms

a. clear.

b. difficult to notice.

c. impossible to find.

d. standardized.


4. Cathy buys software from Digital Products Corporation. When Cathy loads the software, to use the program she is required to click on a button that says, in reference to certain terms, “I agree.” This is

a. a click-on agreement.

b. a default agreement.

c. an attribution agreement.

d. a shrink-wrap agreement.


5. General Electronics, Inc., uses shrink-wrap agreements. In most cases, a shrink-wrap agreement is between

a. any seller and buyer.

b. the manufacturer of hardware or software and a retailer.

c. the manufacturer of hardware or software and its user.

d. none of the above.


6. Dina buys from E-Things, Inc., a product that includes a shrink-wrap agreement. A dispute arises, and E-Things files a suit against Dina. The court will enforce the agreement if Dina used the product

a. after Dina had an opportunity to read the agreement.

b. before Dina had an opportunity to read the agreement.

c. only after Dina actually read the agreement.

d. whether or not Dina read the agreement.


7. Leo and Mona enter into a contract. A dispute later arises over a particular term. The law governing contracts requires that for that term to be given effect, both Leo and Mona must have read

a. all of the terms.

b. at least the term in dispute.

c. most of the terms, including the term in dispute.

d. none of the terms.


8. In Case 19.2, Specht v. Netscape Communications Corp., the court held that online agreements to download software for free

a. are not contracts.

b. are contracts that include all contract terms displayed on the Web site.

c. are contracts that include only those terms to which the downloader has agreed by clicking on “I agree” or “I accept” after viewing the terms and before downloading the software.

d. are unenforceable.


9. In Case 19.2, Specht v. Netscape Communications Corp., the court held that because the plaintiffs did not expressly assent to the terms of the contract, the plaintiffs

a. were not required to submit to arbitration in California, as the contract stated.

b. must stop using the product downloaded from Netscape.

c. must pay for the product.

d. were required to submit to arbitration in California.


10. Eagle Oil Company and Federated Refining, Inc., attempt to enter into a contract in electronic form. Under the Electronic Signatures in Global and National Commerce (E-SIGN) Act, solely because this contract is in electronic form, it

a. may be denied legal effect.

b. may not be denied legal effect.

c. will be limited to certain terms.

d. will not be enforced.


11. Ann, a seller, and Bill, a buyer, make a deal over the Internet that involves e-signatures. Under the E-SIGN Act, for the e-signatures to be enforceable

a. both parties must have agreed to use e-signatures.

b. neither party must have agreed to use e-signatures.

c. only Ann must have agreed to use an e-signature.

d. only Bill must have agreed to use an e-signature.


12. Integrity Manufacturing, Inc., and Jiffy Delivery Service make a deal over the Internet that involves e-documents. Under the E-SIGN Act, for an e-document to be enforceable, it must be in a form that can be

a. accurately reproduced only.

b. retained only.

c. accurately reproduced and retained.

d. the entire contract.


13. Standard Purchasing Corporation and Total Sales, Inc., enter into a partnering agreement. Under a partnering agreement, parties agree

a. in advance to terms that apply to their future e-transactions.

b. to become partners.

c. to conduct transactions solely in electronic form.

d. to resolve all disputes without involving a third party.


14. Kay and Lucy enter into a contract that falls within the provisions of the UETA. Under the UETA, “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record” is

a. an e-document.

b. an e-signature.

c. an e-transaction.

d. a record.

15. Financial Services Corporation engages in e-transactions over the Internet. The UETA

a. does not support the transactions, but does create rules for them.

b. does not support the transactions or create rules for them.

c. supports the transactions and creates rules for them.

d. supports the transactions, but does not create rules for them.


16. Research Products, Inc., and Scientific Tools Corporation enter into a contract online in a state that has enacted a modified version of the UETA in which a procedure for the use of e-signatures is different from that provided in the E-SIGN Act. The alternative procedure is effective if it is

a. consistent with the E-SIGN Act

b. inconsistent with the E-SIGN Act.

c. significantly different from the E-SIGN Act.

d. sufficiently distinctive from the E-SIGN Act.


17. American Food Corporation and Bakers Goods, Inc., transact a deal that the UETA covers. The UETA covers contracts that are also governed by

a. laws on wills and trusts only.

b. the Uniform Commercial Code only.

c. the Uniform Commercial Information Transactions Act only.

d. none of the above.


18. Hi-Tech Services, Inc., and Internet Investments Corporation enter into a contract that would otherwise be subject to the UETA but states that the contract is not subject to UETA provisions. The UETA covers

a. none of the contract.

b. only the part of the contract that concerns computer information.

c. only the part of the contract that does not concern computer information.

d. the entire contract.


19. National Shipping Corporation and Office Software Company (OSC) make a deal for OSCs products, communicating entirely online. Under the UETA, an electronic record is considered sent

a. only at a midway point between the sender and recipient.

b. only on coming into the recipient’s control.

c. only on leaving the sender’s control.

d. when it leaves the sender’s control or comes into the recipient’s control.


20. Gamma Data, Inc., and Omega Research Corporation enter into a licensing transaction for information subject to the UCITA. The UCITA covers the licensing of

a. all information in electronic form only.

b. all information in print form only.

c. all information regardless of form.

d. computer information only.



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