Since the 1940s, the technology revolution has enabled people to communicate electronically. Sitting at a computer terminal connected to a modem and a telephone wire, it is possible to send a message anywhere in the country (or throughout the world)—to another computer, to a telecopy or telefax machine, even to a telephone. Paper is being replaced by electronic signals as a mode of communication. This revolution calls into question some of the fundamental rules upon which our contracts and the U.C.C. were built. On a broader scale, electronic communication raises issues that include the rights and responsibilities of providers and users of electronic mail systems, apportionment of responsibility in the event of error, and authentication and privacy issues.

These developments challenge the legal community. Should the legal community sit passively by, letting business struggle with the legal uncertainties of these modes of communication, stepping in only to attempt to fashion airtight agreements (where called upon to do so) or, more likely, to litigate controversies when they arise? Or should the legal community become an active participant in these developments, helping to channel and direct activity in the best interests of all concerned? Indeed, these developments challenge the "extent of [our] perception, understanding, knowledge, or vision."

The use of electronic messaging, even in a sales context, is not limited to the buyer and the seller. Where a sales document requires a letter of credit to be issued or goods to be shipped under a bill of lading, those documents also may be electronically generated. Thus, the sales transaction, from the issuance of the original purchase order, through shipment of the goods, to the ultimate payment, may be entirely electronic rather than paper-based.

Such "paperless" transactions raise significant legal questions involving the rights of the parties to the transaction, the rights of third party transferees, and the rights and responsibilities of the electronic messaging system providing the services. These are legal issues which exist whether we choose to deal with them or not.

This Article provides an update of current cases governing the law of computer contracting.

Document Type


Publication Date



Notes/Citation Information

The Business Lawyer (ABA), Vol. 44, No. 4 (August 1993), pp. 1671-1698



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.