Introduction:
“Privilege” is defined in the glossary to the Civil Procedure Rules (CPR) as “[t]he right of a party to refuse to disclose a document or produce a document or to refuse to answer questions on the ground of some special interest recognized by law.” “Privileged” documents are communications between a party and its legal advisors which those parties are not obliged to disclose during the disclosure and inspection process of an arbitration or litigation action, and generally relate to (e.g. legal professional privilege or litigation privilege). The privilege documents can be broadly classified under the attorney-client privilege and the work product doctrine.
The Attorney-Client Privilege:
The Attorney-Client Privilege protects communications made in confidence between a lawyer and a client for the purpose of seeking or giving legal advice without fear of discovery by third parties. The attorney-client privilege extends to both written and oral communications. The essential elements of the attorney-client privilege are detailed in Humphreys, Hutcheson, & Moseley v. Donovan, 755 F.2d 1211, 1219-1220 (6th Cir. 1985). The privilege extends to both outside and in-house counsel providing legal advice. United States v. United Shoe Mach. Corp., 89 F. Supp. 357, 360 (D. Mass. 1950). Further, communications to agents retained by the attorney (e.g., accountants, investigators, and consultants) would be privileged if those agents were retained because their services were necessary for effective legal representation. Andritz Sprout-Bauer, Inc. v. Beazer East, Inc., 174 F.R.D. 609, 632 (M.D. Pa. 1997). The attorney-client privilege also protects an attorney’s communication with corporate representatives if: (1) the communication was with an employee of the corporation; (2) the communication was made at the direction of a corporate superior so that the attorney could provide legal advice, and (3) the communication was within the scope of the employee’s duties. Upjohn Co. v. United States, 449 U.S. 383, 394 (1981). The attorney-client privilege protects only communications related to the rendition of legal services, not business advice. United States v. Horvath, 731 F.2d 557, 561 (8th Cir. 1984). However, advice concerning mechanics and tax consequences of alternative business strategies is considered to be legal, not commercial, in nature and thus may be privileged. In re Grand Jury Subpoena Duces Tecum (Rich), 731 F.2d 1032, 1036 (2nd Cir. 1984).
"A client is entitled to hire a lawyer, and have his secrets kept, for legal advice regarding the client's business affairs." United States v. Chen, 99 F.3d 1495, 1501 (9th Cir. 1996). Commercial transactions too are entitled to protection and “[t]he attorney-client privilege still applies . . . where business advice is incorporated into legal advice. See Western Trails, Inc. v. Camp Coast to Coast, 139 F.R.D. 4, 8 (D.D.C. 1991). The Ninth Circuit has recognized that:
[p]rofessional communications, made by client to attorney, or communications passing between client and attorney, are, upon principles of public policy, and from the necessity of preserving confidence in all matters of business where the assistance or agency of an attorney is required, held to be privileged from disclosure; and this privilege . . . embraces all communications made by the client to his attorney for and in the course of the business for which the attorney may be employed.
Baldwin v. Commissioner, 125 F.2d 812, 814 (9th Cir. 1942). The privilege extends to cover both the substance of the client's confidential communications and the attorney's advice in response thereto.
Work Product Doctrine:
The work product doctrine allows attorneys and clients to create documents and gather information in the course of rendering legal advice without fear that those documents may be discoverable by third parties. The doctrine protects information that is prepared by or for a lawyer or client in anticipation of litigation or for trial. Fed. R. Civ. P. 36(b)(3). The basic element for applying the work product doctrine is that the material must be prepared in anticipation of litigation. The “anticipation” requirement does not, however, require that a lawsuit already be on file. Upjohn Co. v. United States, 449 U.S. 383, 386-87, 397-402 (1981).
The Crime-Fraud Exception:
A legal advice, which was sought in furtherance of a crime, a fraud, tort or other misconduct, will not be protected either by the attorney-client privilege or by the work product doctrine. The “crime-fraud exception” applies depends on, first, whether the client was engaged in or planning to commit criminal or fraudulent conduct when he sought legal advice or whether he committed such an offense after receiving the advice, and, second, if so, was the advice obtained in furtherance of, or otherwise closely related, to that misconduct. In re: Grand Jury Investigation (Schroeder), 842 F.2d 1223, 1226 (11th Cir. 1987).
Conclusion:
This memorandum is only an introduction to attorney-client privilege and work product doctrine in United States. There are several federal courts decisions and different state laws for respective states on the attorney-client privilege and the work product doctrine that has not been discussed here for brevity. I have tried to summaries shortly some of the federal case laws on the privilege doctrine for a preliminary understanding of the attorney-client privilege and the work product doctrine.
Thursday, April 17, 2008
Enforceability of Electronic Contracts
Introduction:
The era of information technology and increasing use of internet and E- commerce has witnessed the emergence of new forms of contracts. An attempt is made here to analyze the enforceability of such contracts.
In India the first step to make the electronic contracts enforceable is the Information Technology Act, 2000 basing the UNICITRAL Model Law on Electronic Commerce 1996 with additions made in 1998.
The Government of India has also considered various legislation prevailing in other countries like Utah digital Signature Act, 1995, Malaysia Digital Signature Act, 1997, Malaysia Computer Crimes Act, 1997, Singapore Electronic Transactions Act, 1998, Texas Penal Code Chapter on Computer Crimes in addition to the above the UNICITRAL Model before enacting The Information Technology Act, 2000.
The Act provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as “electronic commerce”, which involve the use of alternatives to paper-based methods of communication and storage of information, to facilitate electronic filing of documents with the Government agencies.
Essential Elements of Electronic Contract:
When forming a electronic contract one has to be careful to see the essential pre-requisites of a contract under the Indian Contract Act, 1872, the valid contract must fulfill the following essential pre-requisites:
(i)Consensus ad idem (consensus of minds on the subject matter) by way of offer and acceptance, Section 2(a) and (b)।
(ii)The proposal must be supported by consideration, Section 2(d).
(iii)The parties must be competent to contract, Sec 11,12.
(iv)The agreement must be made by the free consent of the parties, Section 13 to 22.
(v)The object must be lawful, Section 23 to 25.
(vi)The agreement must not be expressly declared to be void, Sections 26 to 30.
(vii)The agreement must comply with the provision of any law requiring it to be in writing attested or registered.
The Digital signatures:
While talking of Electronic Contract the first issue that raises is about the authenticity of the source from which the offer has come. This is solved by the use of digital signatures which affirms the authenticity. The Information Technology Act has defined digital signature in Sec.2(p) as follows:
Digital signature means authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of Sec.3.
Sec.3 speaks about Authentication of electronic records: (1) Subject to the provisions of this Section any subscriber may authenticate an electronic record by affixing his digital signature.
However most of the electronic contacts are still entered into through without using the Electronic Signatures. The reasons are many, one of the reasons is that, though India’s IT sector is developing the cost of installing a Digital Signature system and registration is high and still continues to be a gray area for most of the importers and exporters.
Fax is also used for entering into contract and the acknowledgment sent from particular number in reply to the offer affixing signatures of the accepting party is considered as acceptance of the offer.
The Shrink wrap agreements and Click wrap agreements:
An area which has to be included in the Information Technology Act 2000 is the enforceability and validity of shrink wrap agreements and Click wrap agreements. These types of agreements. These new forms of agreements have dispelled well-settled notions of contract law.
The “Shrink wrap agreements” are terms and conditions that accompany software that is sold in computer stores. The terms and conditions are often contained in paper form within the sealed package or they appear electronically as part of the installation process of the software on one’s computer.
In either case, the terms and conditions are not known or accessible to the buyer of software until he or she actually buys it by paying for it and either opens the packaging or commences the installation process.
“Click wrap agreements” are electronic variations of the shrink wrap agreement. These usually appear on websites on the Internet, and are terms and conditions through which the user must navigate before conducting a transaction on-line.
These agreements require the user to click the button “I Agree” on the website before proceeding with an on-line transaction, thereby requiring a positive act on the part of the user which constitutes his or her assent to the contract.
The terms are usually heavily sided in favor of the service provider and onerous on the user and there is rarely any clause to protect the interest of the buyer.
In a landmark decision relating to enforceability of "shrink wrap license" the United States Court of Appeals in ProCD Vs Zeidenberg, 86 F.3d 1447 (7th Cir., 1996), held that such a license was valid and enforceable.
E-mail correspondence
Courts in U.S has recently ruled that proposals through e-mail correspondence will be recognized as binding as a written contract. See Shattuck v. Klotzbach, (14 Mass.L.Rptr. 360, 2001 WL 1839720). In Schattuck the Massachusetts Superior Court denying the defendants' motion, held that, “Here, all e-mail correspondence between the parties contained a typewritten signature at the end. Taken as a whole, a reasonable trier of fact could conclude that the e-mails sent by the defendant were "signed" with the intent to authenticate the information contained therein as his act.” New York courts also have expressed similar standards, “the 'signature' on the e-mail is valid under our general statute of frauds...” See, Vista Developers Corp. v. VFP Realty LLC, 2007 NY Slip Op 27418, 5 (N.Y. Misc. 2007).
The bottom line is that, a record or signature may not be denied legal effect or enforceability solely because it is in electronic form.
Recommendation
In spite of innumerable transaction through these types of electronic contracts, there is no step taken to lay down regulation protecting consumers as well as business men who enter into these types of contracts which does not give any right or protection to the consumer or buyer.
The Rules may be laid down in such a way that:
The user of such contract should be given a reasonable opportunity to review the terms and conditions of the contract before it is concluded.
The user should have the opportunity to reject the transaction upon review of the terms and conditions.
The warranties, disclaimers and limitations of damages should be conspicuous and should not be unfair or excessive.
The Language of the terms and conditions should be intelligible to the common person.
---------------------------
The era of information technology and increasing use of internet and E- commerce has witnessed the emergence of new forms of contracts. An attempt is made here to analyze the enforceability of such contracts.
In India the first step to make the electronic contracts enforceable is the Information Technology Act, 2000 basing the UNICITRAL Model Law on Electronic Commerce 1996 with additions made in 1998.
The Government of India has also considered various legislation prevailing in other countries like Utah digital Signature Act, 1995, Malaysia Digital Signature Act, 1997, Malaysia Computer Crimes Act, 1997, Singapore Electronic Transactions Act, 1998, Texas Penal Code Chapter on Computer Crimes in addition to the above the UNICITRAL Model before enacting The Information Technology Act, 2000.
The Act provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as “electronic commerce”, which involve the use of alternatives to paper-based methods of communication and storage of information, to facilitate electronic filing of documents with the Government agencies.
Essential Elements of Electronic Contract:
When forming a electronic contract one has to be careful to see the essential pre-requisites of a contract under the Indian Contract Act, 1872, the valid contract must fulfill the following essential pre-requisites:
(i)Consensus ad idem (consensus of minds on the subject matter) by way of offer and acceptance, Section 2(a) and (b)।
(ii)The proposal must be supported by consideration, Section 2(d).
(iii)The parties must be competent to contract, Sec 11,12.
(iv)The agreement must be made by the free consent of the parties, Section 13 to 22.
(v)The object must be lawful, Section 23 to 25.
(vi)The agreement must not be expressly declared to be void, Sections 26 to 30.
(vii)The agreement must comply with the provision of any law requiring it to be in writing attested or registered.
The Digital signatures:
While talking of Electronic Contract the first issue that raises is about the authenticity of the source from which the offer has come. This is solved by the use of digital signatures which affirms the authenticity. The Information Technology Act has defined digital signature in Sec.2(p) as follows:
Digital signature means authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of Sec.3.
Sec.3 speaks about Authentication of electronic records: (1) Subject to the provisions of this Section any subscriber may authenticate an electronic record by affixing his digital signature.
However most of the electronic contacts are still entered into through without using the Electronic Signatures. The reasons are many, one of the reasons is that, though India’s IT sector is developing the cost of installing a Digital Signature system and registration is high and still continues to be a gray area for most of the importers and exporters.
Fax is also used for entering into contract and the acknowledgment sent from particular number in reply to the offer affixing signatures of the accepting party is considered as acceptance of the offer.
The Shrink wrap agreements and Click wrap agreements:
An area which has to be included in the Information Technology Act 2000 is the enforceability and validity of shrink wrap agreements and Click wrap agreements. These types of agreements. These new forms of agreements have dispelled well-settled notions of contract law.
The “Shrink wrap agreements” are terms and conditions that accompany software that is sold in computer stores. The terms and conditions are often contained in paper form within the sealed package or they appear electronically as part of the installation process of the software on one’s computer.
In either case, the terms and conditions are not known or accessible to the buyer of software until he or she actually buys it by paying for it and either opens the packaging or commences the installation process.
“Click wrap agreements” are electronic variations of the shrink wrap agreement. These usually appear on websites on the Internet, and are terms and conditions through which the user must navigate before conducting a transaction on-line.
These agreements require the user to click the button “I Agree” on the website before proceeding with an on-line transaction, thereby requiring a positive act on the part of the user which constitutes his or her assent to the contract.
The terms are usually heavily sided in favor of the service provider and onerous on the user and there is rarely any clause to protect the interest of the buyer.
In a landmark decision relating to enforceability of "shrink wrap license" the United States Court of Appeals in ProCD Vs Zeidenberg, 86 F.3d 1447 (7th Cir., 1996), held that such a license was valid and enforceable.
E-mail correspondence
Courts in U.S has recently ruled that proposals through e-mail correspondence will be recognized as binding as a written contract. See Shattuck v. Klotzbach, (14 Mass.L.Rptr. 360, 2001 WL 1839720). In Schattuck the Massachusetts Superior Court denying the defendants' motion, held that, “Here, all e-mail correspondence between the parties contained a typewritten signature at the end. Taken as a whole, a reasonable trier of fact could conclude that the e-mails sent by the defendant were "signed" with the intent to authenticate the information contained therein as his act.” New York courts also have expressed similar standards, “the 'signature' on the e-mail is valid under our general statute of frauds...” See, Vista Developers Corp. v. VFP Realty LLC, 2007 NY Slip Op 27418, 5 (N.Y. Misc. 2007).
The bottom line is that, a record or signature may not be denied legal effect or enforceability solely because it is in electronic form.
Recommendation
In spite of innumerable transaction through these types of electronic contracts, there is no step taken to lay down regulation protecting consumers as well as business men who enter into these types of contracts which does not give any right or protection to the consumer or buyer.
The Rules may be laid down in such a way that:
The user of such contract should be given a reasonable opportunity to review the terms and conditions of the contract before it is concluded.
The user should have the opportunity to reject the transaction upon review of the terms and conditions.
The warranties, disclaimers and limitations of damages should be conspicuous and should not be unfair or excessive.
The Language of the terms and conditions should be intelligible to the common person.
---------------------------
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