
Vol 7 Spring 2002 Issue 1
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USING E-DISPUTE TECHNOLOGY TO FACILITATE THE RESOLUTION OF E-CONTRACT DISPUTES: A MODEST PROPOSAL

Joseph A. Zavaletta, J.D. [*]

[p1]

Introduction .................................................................... 2
E-Contract Formation in the New E-conomy:
Don't Call Me, Click My Agent ...................................... 5
- E-SIGN: The Federal Law of E-Contracts .................... 5
- UETA: E-Contract Framework for States ..................... 7
- The Revised U.C.C. Article 2 Sales .............................. 8
  - Automated E-Contracts .................................... 8
  - Quasi-Automated E-Contracts ........................... 9
Online Dispute Resolution ............................................. 10
- ODR: The Early Years .............................................. 11
- ODR: Today's Venues ............................................... 14
  - Automated ODR Venues ................................. 15
  - Interactive ODR Venues .................................. 15
- ODR Benefits ........................................................... 19
- ODR Concerns ......................................................... 21
A Proposal for Resolving E-Contract Disputes
Using ODR....................................................................... 24
Conclusion ..................................................................... 28

I. Introduction

[p2] The Internet has facilitated the creation of a truly global economy -- an e-conomy that has dramatically and irrevocably altered the way individuals live and do business. [1] This new e-conomy is based primarily on the creation of online electronic contracts (e-contracts) between electronic agents and parties with no personal contact or pre-existing business relationships. [2] E-contracts are formed between businesses (B2B) [3] and between businesses and consumers (B2C) [4] to sell everything from securities, [5] online banking, [6] automobiles [7] to info-goods such as digital cameras, laptop computers, Palm Pilots, and wireless web-phones. [8] Studies show that American consumers spent anywhere from $33 to $53 billion in online retail sales during 2001. [9]

[p3] Along with this increase in e-contracting, however, comes an increase in e-contract disputes. [10] Most companies are not prepared to deal with e-contract disputes and still rely on anachronistic real space models of jurisdiction [11] and dispute resolution. [12] In a recent study, for example, the American Arbitration Association found that many companies "do not yet have a plan in place to resolve B2B e-commerce disputes" and that "two-thirds of the respondents expressed concern about an e-commerce dispute with a major supplier" which could adversely impact their business. [13] The study concluded by noting that "providing an electronic mechanism" to [p4] resolve e-commerce disputes "is crucial to the success of the medium." [14] In addition, the need for Online Dispute Resolution (ODR) has attracted the attention of the American Bar Association, [15] the Federal Trade Commission, [16] the World Trade Organization, [17] and Econsumer.gov, a web site created by a consortium of thirteen nations where people can file cross-border e-commerce complaints in four languages (English, French, German, and Spanish) with the consumer protection agencies of the member countries. [18]

This Article begins by first analyzing the legal framework for e-contracting under the new federal E-SIGN law, [19] the Uniform Electronic Transactions Act (UETA), [20] and the latest draft of the Uniform Commercial Code (U.C.C.) Article 2 Sales. [21] This Article then introduces the concept of ODR, its short history, and moves to current ODR applications, discussing the strengths and weaknesses of ODR. Finally, this Article proposes an ODR model that could work to help facilitate e-contractual dispute resolution in a fair and cost-effective manner.

II. E-Contract Formation in the New E-conomy: Don't Call Me, Click My Agent

[p5] The traditional legal infrastructure of the slower Industrial Age is buckling under the weight of the new e-conomy [22] and legislators are scrambling to introduce new federal [23] and state [24] legislation to update traditional notions of contracting. [25] This section will examine relevant sections of the E-SIGN, UETA, the new Article 2, and how these codes facilitate e-contract formation and commerce in the new e-conomy.

A. E-SIGN: The Federal Law of E-Contracts

In 2000, Congress enacted the Electronic Signatures in Global and National Commerce Act, [26] called E-SIGN, which provides a federal legal framework for e-commerce. [27] Congress's intent was for E-SIGN to act to "provide temporary consistency while states adopt their own electronic transaction laws," most notably UETA. [8]

E-SIGN provides the basic new rule of e-signatures and e-contracts by making them applicable notwithstanding any other statute, regulation, or [p6] rule of law. [29] E-SIGN states that in "any transaction in or affecting interstate or foreign commerce, a signature, contract, or other record relating to such transaction may not be denied legal effect, validity or enforceability solely because it is in electronic form." [30] E-SIGN contains additional provisions addressed specifically to consumers and to consumer transactions including the applicability of U.C.C. Article 2 in sales transactions. [31] In particular, E-SIGN provides that a contract "may not be denied legal effect, validity or enforceability" [32] even if the contract is negotiated and formed by an "electronic agent." [33] For those states that have not adopted UETA, [34] incorporating E-SIGN in the choice of law provision and electing to make the contract subject to the law of a state that had passed UETA would be prudent, even though the applicability of such an incorporation remains less than completely settled. However, there is no provision in E-SIGN that expressly prohibits the use of ODR to resolve e-contract disputes. Indeed, E-SIGN expressly excludes applicability to "court orders or notices, or [p7] official court documents (including briefs, pleadings, and other writings) required to be executed in connection with court proceedings." [35]

B. UETA: E-Contract Framework for States

A growing number of states, [36] including Texas, [37] have adopted UETA that applies the E-SIGN rules to e-signatures and e-contracts governed solely by state law. [38] Like E-SIGN, Texas UETA allows the formation of valid e-contracts by one or more automated electronic agents. [39] In the event of an "electronic mistake," [40] UETA provides that an entity is given the opportunity to rescind the e-contract made with an electronic agent if the agent did not provide an opportunity for the prevention or correction of the error. [41] Online retailers (e-tailers) can avoid this problem by providing consumers with a confirmation that allows consumers to review and confirm their selection by clicking through to checkout. If the mistake is learned after the product arrives, the consumer must promptly notify the other party, take reasonable steps to correct the problem, and not receive a benefit from the transaction. [42] So, if the consumer mistakenly chooses a large shirt instead of a medium shirt, and the web site did not provide a confirmation screen for the consumer to confirm or change his order, the consumer could return the shirt and demand a refund by law, regardless of the e-tailer's refund policy, [43] since UETA does not allow an e-tailer to modify this provision by agreement. [44] Like E-SIGN, UETA does not expressly prohibit the use of [p8] ODR venues with electronic transactions. Nor does UETA modify the § 7003(b)(1) of E-SIGN that exempts applicability to official court documents. [45]

In sum, neither E-SIGN nor UETA apply to, or prohibit the use of, ODR for e-contracts, but they allow the parties to negotiate their own terms and dispute resolution mechanisms.

C. The Revised U.C.C. Article 2 Sales

At its national meeting in August, 2001, the National Conference of Commissioners on Uniform States Laws approved substantial revisions to Article 2 of the U.C.C. (hereafter "revised Article 2") which incorporated e-contracting provisions. [46] A major innovation of Article 2 is the creation, formation, and enforceability of contracts created by electronic agents, which is becoming the norm for many businesses. [47]

1. Automated E-Contracts

Section 2-204(4)(a) of the revised Article 2 allows for the formation of automated e-contracts by "the interaction of electronic agents [48] of the parties, even if no individual was aware of, or reviewed the electronic agents' actions or the resulting terms and agreements." [49] Depending on pre-existing contractual arrangements and the use of computers and software put in place by the parties, an electronic agent may have actual or apparent authority to form valid, enforceable e-contracts. Moreover, receipt of an electronic record can act as acceptance, even though no individual is aware of its receipt. [50]

2. Quasi-Automated E-Contracts

[p9] Section 204(4)(b) of revised Article 2 provides for the formation of quasi-automated e-contracts between an electronic agent and an individual if the individual "takes actions that the individual is free to refuse to take or makes a statement that the individual has reason to know will: (i) cause the electronic agent to complete the transaction or performance; or (ii) indicate acceptance of an offer. . . ." Quasi-automated e-contracts, in which a person orders goods by interacting with an electronic agent, are very common at e-tailer web sites. Section 2-204(4)(b) clearly contemplates the formation of an enforceable e-contract when the consumer clicks on an "I Accept" button or checks out from an e-commerce site. The intent of the buyer is determined by the actions recorded at the web site when the buyer, with reasonable opportunity to refuse, continues to click through to consummate the transaction.

E-merchant sites include express terms and conditions that are generally listed on a web site under Terms of Service or Terms of Use. By clicking on the "I Accept" button, a consumer agrees to the contractual terms. For example, at Microsoft's Passport.com, [51] the user creates an enforceable e-contract that is "governed by the laws of the State of Washington, U.S.A." and "irrevocably consent[s] to the exclusive jurisdiction and venue of courts in King County, Washington, U.S.A. in all disputes arising out of, or relating to, the use of the Passport Services." [52] In other words, a Passport.com user in Texas must appear in Seattle, Washington to settle the e-contract dispute arising from the Passport.com service.

Checking out at PCConnection.com [53] means more than agreeing to the invoice presented at checkout. It indicates an acceptance of the terms and conditions of the merchant, including choice of law, venue, and methods of dispute resolution. [54] These terms and conditions apply even though the buyer may not have reviewed them or received more than a notice of their existence with a hyperlink (usually unused) that will provide access to them. In particular, the buyer agrees that "all sales shall be deemed made in the State of New Hampshire, USA, regardless of the location of the Customer" [p10] and that "any dispute . . . arising out of the Customer's purchase from PC Connection, Inc. shall be brought by the Customer exclusively in the state or federal courts situated in the State of New Hampshire . . . ." [55]

Similarly, by using the Shopping Cart at the web site of Amazon.com, [56] the user agrees to the terms and conditions stated in the Conditions of Use page [57] which provides that Washington state law will govern the transaction, [58] and in the event of a dispute, the user agrees to "submit to confidential arbitration in Seattle, Washington." [59] These express terms and conditions are integrated into the e-contract with Amazon.com, whether or not the buyer reads them. Thus, under the common law of contracts, a purchase by a customer at Amazon.com creates a valid e-contract governed by the laws of Washington, with binding arbitration using American Arbitration Association (AAA) rules, [60] as the sole remedy for breach of contract. [61] Although Amazon.com has no ODR provisions in its Conditions Agreement, the AAA has re-designed its entire web site and introduced AAAWebfile, a password protected web site that allows users, for the first time, to "file and track their cases quickly, conveniently and securely" online, as well as "transfer documents among parties." [62]

III. Online Dispute Resolution

Online dispute resolution, although relatively new, harnesses the power of the Internet to resolve both off-line and online contracts. [63] As shown below, ODR is increasingly being used to resolve consumer and business disputes. [64] This section will chronicle initial ODR venues through current venues, while discussing the benefits and disadvantages of ODR.

A. ODR: The Early Years

[p11] In the mid-1990s, four ODR venues were started: the Virtual Magistrate at Villanova University, the Online Ombuds Office at the University of Massachusetts, the Online Mediation Project at the University of Maryland, and the CyberTribunal Project at the University of Montreal, Canada. [65]

The Virtual Magistrate, or VMAG, [66] was created primarily to facilitate the online resolution of copyright, libel, or trademark claims beginning to confront online "sysops," [67] thus exposing them to potential legal liability. The VMAG represented that it was able to resolve disputes within seventy-two hours of filing the complaint. [68] The procedure of the VMAG was simple:

One party [Complainant]. . . asserts that a second party ("Actor") has posted a message or a file on a system under the control of another party ("Sysop") containing "wrongful content" of some kind, e.g., material that infringes Complainant's copyright or trademark rights, misappropriates trade secrets belonging to Complainant, is defamatory or fraudulent or inappropriate (obscene, lewd, or otherwise violative of system rules), and demands that the offending posting be removed from the system under Sysop's control. [69]

[p12] Once the case was accepted, the AAA appointed a single arbitrator (the virtual magistrate) who was selected randomly from qualified arbitrators specially trained by the AAA and CLI. The speed and flexibility of the VMAG enabled it to handle complaints without the need for litigation. In the first ODR case, Tierney v. America On-Line, America Online was ordered to remove an advertisement offering to provide mailing lists of thousands of e-mail addresses. [70] Although the parties were located in disparate geographical regions, the dispute was resolved in a few days. [71] The VMAG project continues today at the Chicago-Kent College of Law. [72]

The Online Ombuds Office (OOO), created by Ethan Katsh, Professor of Legal Studies at the University of Massachusetts, began in 1996. [73] The OOO has an online conference room where, using technology such as IRC chat, [74] parties can interact with each other online. The process at OOO is as follows: A user provides the OOO with information about her dispute. An ombudsperson is assigned to the case and usually contacts the user via e-mail. The ombudsperson may ask questions about what has happened or [p13] about what the user wants. The ombudsperson may also have questions about the other party. If both parties are cooperating in using the OOO, then the ombudsperson will mediate the dispute. If one party refuses to cooperate, he will suggest some other strategy. [75]

The OOO continues today, and is now a part of the Center for Information Technology and Dispute Resolution at UMASS, [76] conducting mediations involving domain names, [77] intellectual property, and disputes between business competitors. [78]

Finally, the CyberTribunal began in 1996 at the University of Montreal. [79] Given its location and bi-cultural legal environment that relies on both civil and common law, the CyberTribunal sought to create a cross-border ODR venue. [80] Services were initially offered in both French and English. [81] Its purpose was to act as an online mediator and facilitate dialogue between parties and, if necessary, to act as an arbitrator using a pool of jurists, professors, and lawyers from a number of countries that specialize in commercial mediation and information technologies. [82] Its arbitration rules of procedure were modeled on those rules generally used in international commercial arbitration developed by the International Chamber of Commerce (ICC) [83] and the United Nations Commission on International Trade Law (UNCITRAL). [84] Prior to its closing in 1999, the CyberTribunal mediated over one-hundred disputes. [85]

B. ODR: Today's Venues

[p14] ODR has progressed rapidly since the early efforts, due primarily to recent web browsing enhancements [86] and very fast Internet broadband connections. [87] Unlike a traditional court or arbitration firm, ODR venues today are open twenty-four hours a day, seven days a week, and incorporate both synchronous and asynchronous communications capabilities. Synchronous communication software includes new online technology developments such as instant text messaging, [88] java-enabled [89] chat rooms, and web cam video conferencing [90] that enable real-time communication and collaboration between parties. With the advent of wireless e-mail and web browsing, users with products such as the RIM Blackberry [91] or a PCS [p15] phone [92] could conceivably resolve their cases while waiting at airports. Asynchronous communications such as e-mail and web boards, on the otherhand, allow parties to post their comments and questions in password-protected areas at their convenience.

Whereas early ODR endeavors were not-for-profit venues sponsored by universities and foundations, ODR venues of today are for-profit commercial ventures providing services for both B2B and B2C online transactions. ODR venues use differing approaches, ranging from automated dispute resolution to electronic courtrooms complete with juries.

1. Automated ODR Venues

Automated ODR venues require no human intervention to settle a case. [93] Clicknsettle.com [94] and Cybersettle.com [95] allow for variations of a blind bid process by electronic agents which allow users to confidentially submit settlement offers without the offer being revealed to the other party. The ODR sites then compute the differences in the bids and if the offers are within a designated range the parties have already agreed, the difference is then split between the parties and the case is settled. If the offers are outside of the range designated by the parties, the offers are not revealed and the parties may continue negotiations. This model works well with insurance settlement cases where the issue is only the amount of money, not liability. While these automated ODR venues are simple and have a relatively high success rate, they are also limited since there are no live mediators or arbitrators involved. [96]

2. Interactive ODR Venues

Interactive ODR (I-ODR) venues, unlike automated ODR venues, typically have a real mediator or arbitrator who is facilitating the dispute resolution process via the use of electronic robots. [97] I-ODR venues range from simple e-mails between the parties to sophisticated multimedia cyber-courthouses with cyber-juries. ODR venues usually have case management [p16] processes that allow clients to file pleadings, track the progress of their cases, and interact with the mediator (or arbitrator) and the other parties by both synchronous and asynchronous methods. Although there are numerous ODR venues, [98] this section will focus on ICourthouse.com, [99] Squaretrade.com [100] and the American Arbitration Association's AAAWebfile portal. [101]

I-Courthouse.com, currently free to the public, bills itself as the "Web's Destination for Justice" and a "greatly streamlined version of the court system in the real world" where cases "move at Internet speed" and the "cases are real, the jurors are real, and the verdicts are real." [102] Members can file their own claim online, collect evidence online from the other party, be a juror in another claim, or merely be an observer in the courtroom. [103] I-Courthouse has "Rules of Procedure" [104] and a "User Agreement" [105] which provide policies on file sizes during discovery, user conduct, [106] privacy, and security. Awards are enforced by the terms of the agreement between the parties.

[p17] Squaretrade.com, [107] another ODR venue brands itself as "building trust between online buyers and sellers," and handles over 12,000 cases per month. [108] SquareTrade offers online mediation that is a:

fast and convenient way for parties anywhere in the world to resolve issues that have arisen over online transactions. During ODR, parties work together to resolve problems within the SquareTrade system quickly, either independently using our Direct Negotiation tool, through mediation, or through arbitration. The ODR Service is completely web-based and capable of handling disputes between parties based in different states and countries. [109]

The most well-known client of SquareTrade is e-Bay.com. [110] In the event of disagreement, e-Bay users will find SquareTrade's co-branded Dispute Resolution link at the Rules and Safe Harbor page [111] where users can click through to the special web site of SquareTrade for e-Bay users. [112] Here, buyers can gain confidence by looking for sellers who possess the distinctive SquareTrade seal which guarantees, among other things, the commitment to mediation from the Seller, up to $250 for fraud protection, and ID verification. [113] Aggrieved e-Bay members may use two services: a free web-[p18]based forum which allows users to attempt to resolve their differences on their own or, if necessary, the use of a professional mediator. [114] The resolution process typically takes about ten days. [115]

The e-Bay user choosing to use SquareTrade begins the dispute resolution process by filing a case with Squaretrade in a user-friendly, fill in the blank screen. [116] The complaint contains factual allegations as well as the e-mail address and e-Bay user ID of the respondent. [117] To ensure privacy, Squaretrade uses an e-mail protocol that requires the respondent to click on a special link in the e-mail so that the respondent can confidentially answer the allegations. [118] According to Squaretrade, the majority of parties do respond. And if the other party has a seal, it is committed to respond. Once the other party has responded, the parties enter a direct negotiation phase at a secure, password-protected Squaretrade chatroom where over 80% of the disputes are worked out without any further assistance. [119] However, the parties do have the option to request the services of a real mediator to facilitate the dispute resolution process. The cost: $15.00. [120] Squaretrade.com statistics show that the overwhelming majority of ODR users would use the venue again. [121]

The third ODR venue, based at the AAA, [122] is perhaps the most well-known and prestigious real space dispute resolution organization. In early 2002, the AAA inaugurated its online "AAAWebfile," [123] the new online filing system of AAA, which offers AAA customers the ability to file and [p19] track their cases quickly, conveniently, and securely online. AAAWebfile allows parties with a dispute to communicate with each other, track the progress of their case, and even transfer documents between parties. [124]

C. ODR Benefits

ODR offers numerous benefits to both seller and buyer alike. [125] The first benefit is convenience: the Internet is always open, all day, every day. Sellers and buyers separated by great distances in different time zones can access an ODR venue and communicate with each other at reasonable hours using asynchronous tools, such as e-mail and discussion boards. [126] Pleadings and evidence can be viewed by the parties at their own convenience. [127]

The second benefit is the low barrier to entry: a computer, modem, Internet connection, and e-mail account is sufficient to begin the process. Compared to the cost of real space arbitration, ODR venues are relatively inexpensive or, in some cases like SquareTrade, free. Instead of faxing or Fed-Ex'ing pleadings or documents, they can be e-mailed around the world to all parties in minutes or, in the alternative, uploaded to the ODR venue where all the parties can examine them. [128]

These economies of scale create a third benefit: a new paradigm of fairness in transactions. Because of the low cost and convenience, ODR makes the financial resources of parties -- or the value of the transaction -- virtually irrelevant. [129] When the costs of dispute resolution are high, as they are for real space administrative and judicial procedures, the costs of the underlying transaction increases. As a result of the costs of traditional dispute resolution -- particularly costs of cross-border disputes -- consumers may be less inclined to purchase goods, or enforce their contractual rights. At the same time, merchants may decline to participate in the global economy because litigation costs outweigh the advantages of the goods and services they offer in the new electronic markets. [130] In other words, ODR helps to create a level playing field regarding transaction costs [p20] which should result in more participation by more consumers and small businesses wishing to engage in cross-border commerce in the global market.

A fourth benefit is the impersonal and non-adversarial aspect of ODR venues. In traditional mediation or arbitration the parties are physically present, or at least close by. Occasionally, the physical presence of a party can trigger emotional hostility in another party, especially when one party tries to dominate or intimidate the other. [131] ODR allows parties to interact in an impersonal, detached manner, and to post comments, not under emotional pressure, but after they have been carefully thought through. [132]

A fifth benefit of ODR is the preemption of thorny legal issues concerning cross-border jurisdiction, forum, and choice of law using an electronic version of the "Law Merchant." [133] The Law Merchant, developed by merchants during the Middle Ages, consisted of a separate body of commercial customs, traditions, and courts outside of the existing legal framework that governed the international trade of their day. [134] The Law Merchant was applied to international transactions in medieval fair courts by the merchants themselves as an alternative means of dispute resolution. The Law Merchant had several distinguishing characteristics: (1) it was international; (2) its principal source was mercantile customs; (3) it was administered by the merchants themselves; (4) it was quick and informal, and (5) it stressed equity as the overriding principle of justice. [135] The Law Merchant has strong implications for ODR because it was created by a community of merchants based on customs and practices those merchants generally agreed upon as fair and equitable and was adjudicated by those same merchants. [136] Likewise, the Internet is a community with its own customs and practices and, as technological innovations continue, this new [p21] community is producing a uniform code of cyberlaw customs and practices as well. [137] The Law Merchant, or the Lex Electronica, will continue to develop and accommodate the commercial practices of those who live and do business on the Internet. [138]

D. ODR Concerns

Not everyone agrees that ODR is ready for consumer use. ODR does have promise, but it presents concerns that must be addressed if it is to truly replace traditional real-space alternative dispute resolution (ADR). [139] Ponte notes that "as it currently stands, ODR cannot guarantee these qualities for unhappy online consumers. Certainly, a great deal more experimentation, research, and collaborative action must occur before consumers can be confident about ODR options." [140]

The first issue is the nature of ODR itself: can mouse-to-mouse ADR be as effective as face-to-face ADR? Some argue that electronic communication can never substitute for face-to-face conversations and mediators would find it virtually impossible to translate their skills to the online setting. [141] Moreover, the so-called advantage of the impersonal nature of e-mail and web boards can actually cause parties to become more angry because of their isolation and the re-reading of the postings and e-mail. [142] Along these lines is the concern about how a mediator could build trust between the parties without visual cues, language tone, or body language. [143] This is a genuine concern when dealing with cross-cultural transactions.

For example, in the context of the North American Free Trade Agreement disputes, American culture is seen as individualistic with candid conversation, an emphasis on rights, and litigation viewed as a means to [p22] vindicate oneself. [144] On the other hand, Mexican culture is seen as collectivist, which is less mobile and more passive with high regard for large families and harmony. [145] Because of his culture, a Mexican merchant may demonstrate politeness, deference, and be reluctant to discuss his conflict openly. Criticism, if offered at all, will be cautious and indirect so that the other party "saves face." [146] Although ODR is convenient, without the cultural cues that mediators and parties use in everyday business, online communications could be misinterpreted, thus driving the parties further apart. [147] Cultural nuances and assumptions, already difficult to interpret, may be impossible online without extensive education and preparation for online cues. In other words, a mediator trained in traditional ADR techniques would have to be re-trained to apply her knowledge of culture to online communications. [148]

Another concern is the suggestion that ODR will not be viable until videoconferencing is commonplace and "video cameras and microphones are built into computers, videoconferencing software is bundled with computers, and modems are fast enough (i.e., broadband) to accommodate videoconferencing." [149] Using videoconferencing, live or archived, would help alleviate some concerns about visual cues and witness or evidence credibility. [150] A live video conference could be archived (digitally recorded) and uploaded to a password protected web site for later review. Likewise, video depositions could be taken of parties with follow up in the form of e-mails and web board postings.

For ODR to become accepted, national standards must be set in place by the cooperation of government of private sectors to ensure consumer trust and acceptance. [151] Perhaps a trustmark seal like that of Squaretrade's will assist. [152] Security and confidentiality [153] are an intrinsic part of ADR. A party [p23] must know that communications with the mediator are confidential and that what is revealed will not be revealed to the other party without express consent. In real-space ADR, these concerns are easily addressed with physical limitations, e.g., the files of a party are kept in locked cabinets by the mediator or parties are placed in separate rooms. However, in cyberspace, pleadings, comments, and evidence can easily be copied multiple times and disseminated around the world in a matter of minutes. [154] These concerns are now being resolved by free, encrypted e-mail software [155] and password-protected web sites, chatrooms and discussion boards available at many e-dispute sites such as Squaretrade.com and Cybersettle.com.

The final area of concern is the question of enforceability of ODR "verdicts." [156] How can the decisions of an ODR venue be enforced? In real space ADR, parties agree in advance to be bound by the decision of a third party: whether as part of a employment contract that requires binding arbitration or, in the alternative, if the parties both voluntarily agree to be bound by the decision of the mediator. [157] Thus, if the parties have agreed to be bound by the decision, the decision is enforceable in a competent U.S. court, [158] local court and, once docketed in a state court, can be enforced in another state by the Full Faith and Credit Clause of the U.S. Constitution. [159]

In addition, international organizations such as the World Trade Organization would need to facilitate international cooperation and agreement on enforcement of ODR awards. Traditional arbitration awards [160] are enforced by international treaties and agreements such as the U.N. [p24] Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention, [161] and the Inter-American Convention on International Commercial Arbitration of 1975, or the Panama Convention. [162] These treaties provide the basis for the enforcement of arbitral awards as well a final path that can only be challenged under very limited circumstances. [163] Modification of existing international agreements to include approved ODR venues would lend support towards the acceptance of ODR in resolving both domestic and cross-border disputes.

IV. A Proposal for Resolving E-Contract Disputes Using ODR

In order to facilitate a change in paradigm from resolving e-contract disputes using ODR, rather than traditional real-space dispute resolution requires that: first, Internet service providers (ISPs) and online retailers should modify their agreements with their customers to include ODR provisions; and second, consortiums of Internet providers and government agencies form a confederation to facilitate the enforcement of ODR awards in both off-line and online jurisdictions.

As to the first condition, ISPs could modify their Internet Services Agreement so that users agree to use ODR for disputes with third parties when they subscribe to the service. For example, the User Agreement of Earthlink.net [164] could be modified to include ODR provisions, shown below:

11. JURISDICTION AND DISPUTE RESOLUTION.
Under California Civil Code Section 1789.3, Members or Visitors who are residents of California are entitled to the following specific consumer rights information: the Complaint Assistance Unit of the Division of Consumer Services of the Department of Consumer [p25] Affairs may be contacted in writing at 400 R Street, Suite 1080, Sacramento, CA 95814 or by telephone at 916.445.1254.
This Agreement is governed by Georgia law without regard to conflict of law provisions.
In the event of a dispute arising from use of this service between a subscriber and Earthlink.net or a third party, you consent to binding online arbitration with SquareTrade.com for the resolution of said dispute. Arbitration shall be conducted under the rules then prevailing of the American Arbitration Association and the arbitrator's award may be entered as a judgment in any court of competent jurisdiction.

Paragraph No. 12 of MSN's Internet Services Agreement [165] could be modified, as follows:

12. General and Dispute Resolution
12.1 Except where prohibited by applicable law, this Agreement shall be governed by the State of Washington, USA, and you consent to online arbitration with SquareTrade.com for all disputes arising out of or relating to your use of MSN or your MSN subscription. Arbitration shall be conducted under the rules then prevailing of the American Arbitration Association. The arbitrator's award shall be binding and may be entered as a judgment in any court of competent jurisdiction.

Amazon.com, the largest e-tailer in the world, could make a simple modification to its Conditions of Use to allow ODR, as follows:

DISPUTES
Any dispute relating in any way to your visit to Amazon.com or to products you purchase through Amazon.com shall be submitted to binding online arbitration with SquareTrade.com except that, to the extent you have in any manner violated or threatened to violate Amazon.com's intellectual property rights, Amazon.com may seek injunctive or other appropriate relief in any state or federal court in the state of Washington, and you consent to exclusive jurisdiction and venue in such courts. Arbitration under this agreement shall be conducted under the rules then prevailing of the American Arbitration Association. The arbitrator's award shall be binding and [p26] may be entered as a judgment in any court of competent jurisdiction. [166]

As to the second condition, enforcement of ODR decisions should not be problematic due to well-established precedent and laws for enforcement of arbitral decisions. [167] A confederation of ISPs, administrators, vendors, and governments could agree to give approved ODRs Full Faith and Credit and enforce ODR awards. [168] A party failing to abide by an ODR decision could be banished from doing business online by the confederation of ISPs who have agreed to assist the ODR tribunal in the enforcement of the decision.

This process is already in place at, for example, e-Bay.com where non-paying bidders (NPBs) face e-Bay's sanctions: [169] for the first and second offenses the NPB receives a warning, for the third offense the NPB receives a warning and a thirty day suspension where the NPB is locked out of the e-Bay site, and the fourth offense carries an indefinite suspension, i.e., cyber "cooperative exile." [170] An e-Bay user who is exiled from the site is unable to buy or sell at e-Bay. The process at e-Bay is totally online, beginning with an online alert form the seller completes. [171] If the NPB feels she has been unfairly accused, she can complete an appeal form. [172] The lesson is this: a party unable to advertise or do business on the Internet is clearly at a competitive disadvantage in the new global business community.

Further, mediators and arbitrators skilled in real-space dispute resolution will have to be trained to work with the nuances of online dispute resolution. The training is already happening by the AAA and collaboration from law schools and practitioners currently involved in ODR. [173] Rules and procedures governing the new medium could be further developed, using experience gained from current ODR venues.

[p27] Law schools and legal educators can help facilitate discussions on cross-border online dispute resolution by sponsoring events that introduce students, judges, and practitioners to the technologies. The author, for example, developed a mock ODR venue called the the Cybercourt at Lexopolis.com [174] which he uses to teach his MBA online classes. [175] The Cybercourt uses both asynchronous (discussion boards and e-mail) as well as synchronous (chat) technologies and has the major elements of a court house: a Docket, a Clerk of Court, a Courtroom, and a Café. Every week, student teams are required to participate in a cyber-trial where they represent a fictitious client. Teams find their weekly case at the Docket where each team is designated either plaintiff or defense. Plaintiffs then do legal research and post their complaint with the Clerk of Court, a threaded discussion board. Defense then posts an answer to the Clerk of Court and the matter is docketed for the weekly cyber-trial. Each week all the teams meet in the Courtroom, and speak by typing in text in a specially designed chat room. The judge (the instructor) calls only one case and Plaintiffs proceed with the opening statement, followed by the defense. The remaining students who are not in trial are appointed cyber-jurors in the case and are required to cross-examine the facts and merits of each presentation of the parties. At the end the trial, the parties make closing statements and the jury renders a verdict. In the past, students from as far away as Europe and Mexico were able to simultaneously interact with each other in the courtroom. The technology proved to be very reliable and the students immensely enjoyed the learning experience. [176]

ODR venues like this could be constructed with the limited purpose of only memorializing facts and text, or with multiple purposes that could include binding arbitration. At least one state, Michigan, is considering a cybercourt for high-technology cases, where virtually everything would be done via computer rather than in a courtroom. [177] Briefs can be filed online, evidence viewed by streaming video, oral arguments delivered by teleconferencing, conferences held by e-mail. Lawyers would not have to be [p28] in Michigan or even be licensed to practice in the State. Cases could be heard any time of the day, even at night, and judges would be trained to understand the complex issues that arise in technology disputes.

V. Conclusion

The Internet will continue to impact the way we do business as the number of households connected to the Internet increases. Nielsen-NetRatings.com estimates that, during any given week, approximately 60% of the American population (166,203,675) is online and each person visits the Internet seven times a week and spends an average of three and one-half hours online. [178] U.S. Commerce Department statistics show that the number of U.S. households with Internet access is growing at over twelve percent per year. [179] Most importantly, up to twenty percent of the American population made an online purchase during the 8-week 2001 Christmas shopping season for a total of $13.8 billion dollars spent on online shopping. [180]

As the Internet continues to create new paradigms for doing business, it must also create new paradigms for resolving disputes. Resolving disputes created by online transactions should be as convenient and affordable as creating the transaction itself. The time has come for ODR.

[*] Assistant Professor of Legal Studies, University of Texas at Brownsville. J.D., Regent Law School, B.S. University of Texas. E-mail: jzavaletta@lexopolis.com.

[1] See, e.g., Peter Fingar et al., The Death of "E" and the Birth of the Real New Economy: Business Models, Technologies and Strategies for the 21st Century (2001); Janet Kornblum, Net Experts Agree That It's Impact Keeps Unfolding, USAToday.com, Dec. 27, 2001, available at http://www.usatoday.com/life/cyber/tech/2001/12/27/ebrief.htm (last visited Mar. 22, 2002).

[2] See Anthony M. Balloon, From Wax Seals to Hypertext: Electronic Signatures, Contract Formation, and a New Model for Consumer Protection in Internet Transactions, 50 Emory L.J. 905 (2001); Lucille M. Ponte, Throwing Bad Money After Bad: Can Online Dispute Resolution (ODR) Really Deliver the Goods for the Unhappy Internet Shopper?, 3 Tul. J. Tech. & Intell. Prop. 55 (2001); Henry H. Parrott, Jr., Dispute Resolution in Cyberspace: Demands for New Forms of ADR, 15 Ohio St. J. on Disp. Resol. 675 (2000); Shawn E. Tuma & Christopher R. Ward, Contracting over the Internet in Texas, 52 Baylor L. Rev. 381 (2000).

[3] See, e.g., Chelsea P. Ferrette, E-Commerce and International Political Economics: The Legal and Political Ramifications of the Internet on World Economies, 7 ILSA J. Int'l & Comp. L. 15, 20 (2000); Balloon, supra note 2, at 908 n.18.

[4] See Ferrette, supra note 3, at 21; Balloon, supra note 2, at 908 n.18.

[5] See, e.g., the E-Trade.com "User Agreement," available at https://us.etrade.com/e/t/home/accountfeatures (last visited May 7, 2002).

[6] See, e.g., the "Online Access Agreement For Wells Fargo Online And Wells Fargo Business Online Services" Agreement, available at https://banking.wellsfargo.com (last visited May 7, 2002).

[7] See, e.g., the Autobytel.com "Web site Usage Terms And Conditions" Agreement, available at http://www.autobytel.com/content/home/help (last visited May 7, 2002).

[8] See, e.g., the PCConnection.com "Terms and Conditions of Sale" Agreement, available at http://www.pcconnection.com/scripts/about/caveat.asp (last visited May 7, 2002).

[9] See, e.g., Michael Pastore, U.S. E-Commerce Spikes in 4Q 2001, Cyberatlas, available at http://cyberatlas.internet.com/markets/retailing/article/0,,6061_977751,00.html (last visited May 7, 2002); Department of Commerce News, Feb. 20, 2002, available at http://www.census.gov/mrts/www/current.html (last visited Mar. 22, 2002); Comscore 2001 E-Commerce Report, Jan. 16, 2002, available at http://www.comscore.com/news/ecommerce_2001_review.htm (last visited Mar. 22, 2002).

[10] See Ponte, supra note 2, at 56; Ethan Katsh & Janet Rifkin, Online Dispute Resolution: Resolving Conflicts in Cyberspace 3 (2001); Lan Q. Hang, Online Dispute Resolution Systems: The Future of Cyberspace Law, 41 Santa Clara L. Rev. 837, 838 (2001); Richard M. Victorio, Internet Dispute Resolution (IDR): Bringing ADR into the 21st Century, 1 Pepp. Disp. Resol. L.J. 279, 279 (2001); Stephen J. Ware & Sarah R. Cole, Introduction: ADR in Cyberspace, 15 Ohio St. J. on Disp. Resol. 589, 591 (2000); Ethan Katsh, The New Frontier: Online ADR Becoming a Global Priority, Disp. Resol. Mag., 6 (2000); Ethan Katsh, Dispute Resolution in Cyberspace, 28 Conn. L. Rev. 953, 957 (1996); Alternative Dispute Resolution of Consumer Transactions in the Borderless Online Marketplace, FTC's Public Workshop on Consumer Transactions in the Borderless Online Marketplace, June 2002, available at http://www.ftc.gov/bcp/altdisresolution/comments/ruleattach.htm (last visited May 7, 2002).

[11] See generally Dan L. Burke, Jurisdiction in a World Without Borders, 1 Va. J.L. & Tech. 3 (1997); Andrew L. Shapiro, Constitutional Issues Involving Use Of The Internet: The Disappearance Of Cyberspace And The Rise Of Code, 8 Seton Hall Const. L.J. 703 (1998); David R. Johnson & David Post, Law and Borders: The Rise of Law in Cyberspace, 48 Stan. L. Rev. 1367, 1370 (1996) where the authors suggest that the Internet

is destroying the link between geographical location and: (1) the power of local governments to assert control over online behavior; (2) the effects of online behavior on individuals or things; (3) the legitimacy of a local sovereign's efforts to regulate global phenomena; and (4) the ability of physical location to give notice of which sets of rules apply. The Net thus radically subverts the system of rule-making based on borders between physical spaces, at least with respect to the claim that Cyberspace should naturally be governed by territorially defined rules.

Id. at 1370.

[12] See Louise Ellen Tieste, Providing Legal Services for the Middle Class in Cyberspace: The Promise and Challenge of Online Dispute Resolution, 70 Fordham L. Rev. 985, 987 n.7 (2001); Fernando Piera, International Electronic Commerce: Legal Framework at the Beginning of the XXI Century, 10 Currents: Int'l Trade L.J. 8, 21 (2001); Michael Abramowicz, Cyberadjudication, 86 Iowa L. Rev. 533, 535 (2001).

[13] See American Arbitration Association News Page, B2B E-Commerce Poised For Explosion According To American Arbitration Association Study: Survey Uncovers Need For E-Commerce Rules, available at http://www.adr.org/index2.1.jsp?JSPssid=13636&JSPsrc=upload/LIVESITE\About\whatsnew\b2b_article.html (last visited July 12, 2002).

[14] Id. The AAA recently created AAA Web File, an online case management system. See AAA, infra note 123.

[15] See the ABA's E-Commerce and ADR Task Force web page, available at http://www.abanet.org/buslaw/adrtaskforce.html (last visited May 7, 2002).

[16] In June 2000, the Federal Trade Commission and the Department of Commerce hosted a Public Workshop on Alternative Dispute Resolution for Consumer Transactions in the Borderless Online Marketplace, and published a Summary, available at http://www.ftc.gov/bcp/altdisresolution/summary.htm (last visited May 7, 2001).

[17] See Trading Into the Future: Settling Disputes, the World Trade Organization's web site, available at http://www.wto.org/english/thewto_e/whatis_e/tif_e/disp0_e.htm (last visited May 7, 2001).

[18] In addition, consumers can learn about consumer protection mechanisms in these countries, and how to contact their respective authorities directly. The site is monitored by law enforcement agencies of the member nations. See E-Consumer web site, available at http://www.econsumer.gov (last visited May 7, 2002).

[19] 15 U.S.C. § 7001 (2002).

[20] The final draft of UETA was approved by the National Conference of Commissioners on Uniform State Laws at its Annual Meeting in July 1999 as a body of legislation validating the use of electronic contracts and electronic signatures, available at http://www.law.upenn.edu/bll/ulc/fnact99/1990s/ueta99.htm (last visited May 7, 2002) [hereinafter UETA].

[21] The August 2001 draft of the revised Uniform Commercial Code Article 2 was approved by the National Conference of Commissioners on Uniform States Laws, available at http://www.law.upenn.edu/bll/ulc/ucc2/ucc0612.htm (last visited May 7, 2002) [hereinafter Revised Article 2].

[22] See generally Scott R. Zemnick, The E-Sign Act: The Means To Effectively Facilitate The Growth And Development Of E-Commerce, 76 Chi.-Kent. L. Rev. 1965 (2001); Michael Watson, E-Commerce and E-Law; Is Everything E-Okay? Analysis of the Electronic Signatures in Global and National Commerce Act, 53 Baylor L. Rev. 803, 813-14 (2001).

[23] A partial listing of federal legislation introduced or enacted during the last two years includes the Electronic Signatures in Global and National Commerce Act of 2000, the E-Government Act of 2001 (S. 803), the Electronic Commerce Technology Promotion Act (2000 S. 1912), the Electronic Commerce Enhancement Act (2001 H.R. 524), the Internet Tax Nondiscrimination Act (H.R. 1675.IH), the Jurisdictional Certainty Over Digital Commerce Act (H.R. 2421), the Intellectual Property Protection Restoration Act of 2001 (S. 1611). See, e.g., McBride, Baker, and Coles web site, available at http://www.mbc.com/ecommerce/Federal2.asp?Federal=4&x=0&y=9 (last visited May 7, 2002).

[24] As of early 2002 the following states have enacted or introduced the Uniform Electronic Transactions Act: Alabama, Arizona, Arkansas, California (S.B. 97), Colorado (H.B. 1326), Connecticut (H.B. 5922), Delaware, District of Columbia, Florida, Hawaii, Idaho, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, and Wyoming. See web site of McBride, Baker, & Coles, available at http://www.mbc.com/ecommerce/legislative_8.asp?state=all (last visited May 7, 2002).

[25] See Balloon, supra note 2, at 909-10.

[26] 15 U.S.C. § 7001 (2002).

[27] See Zemnick, supra note 22, at 1967.

[28] See Watson, supra note 22, at 813. See also discussion on UETA, infra Part II.B.

[29] See 15 U.S.C. § 7001(a) (2002).

To the extent federal law applies: "(1) a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and (2) a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation."

Id.

[30] Id. § 7001(a)(1) (2002).

[31] See Balloon, supra note 2, at 926; 15 U.S.C. § 7001(c) (2002) requires that vendors, (1) inform consumers of rights with respect to entering into electronic transactions, (2) require affirmative consent of a consumer prior to use of electronic signatures and electronic records for a single transaction or for all subsequent transactions; (3) permit consumers to withdraw consent to engage in electronic transactions; (4) describe procedures to be used to withdraw consent; and (5) describe procedures consumers must use to secure a copy of an electronic record and any charges for the copy. The law overrides prior statutory requirements for verification, acknowledgment, or receipt of records to the extent that they conflict with E-SIGN. See id. § 7001(c)(2)(B).

[32] 15 U.S.C. § 7001(h) (2002).

[33] E-SIGN defines an electronic agent as "a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part without review or action by an individual at the time of the action or response." Id. § 7006(3).

[34] As of March 2002, only eight states, Alaska, Georgia, Illinois, Louisiana, New York, South Carolina, Washington, and Wyoming, had not introduced or enacted UETA legislation. See web site of McBride, Baker, & Coles, available at http://www.mbc.com/ecommerce/legislative_8.asp?state=all (last visited May 7, 2002).

[35] 15 U.S.C. § 7003(b)(1) (2002).

[36] See supra note 24.

[37] The 2001 Texas Legislature passed Senate Bill 393, the Texas version of UETA, which became effective January 1, 2002 (codified as Tex. Bus. & Com. Code Ann. § 43.001 (Vernon 2002)). Full text of Senate Bill 393, available at http://www.capitol.state.tx.us/capitol.htm (last visited Apr. 18, 2002). The Texas UETA conforms state law to E-SIGN by granting the same right to use e-signatures and create e-contracts. Tex. Bus. & Com. Code Ann. § 43.007 (Vernon 2002).

[38] See Tuma & Ward, supra note 2, at 382; Balloon, supra note 2, at 922-30.

[39] See Tex. Bus. & Com. Code Ann. § 43.014 (Vernon 2002).

[40] UETA's § 10 "Effect of Change or Error," based on the Restatement of Second Contracts, Sections 152-155, provides for various remedies, including agreement between the parties as to how to resolve the mistake, or in the event of no agreement, reasonable notice and steps to prevent the other party from being injured by the mistake. See UETA, supra note 20.

[41] See Watson, supra note 22, at 831; see also UETA, supra note 20, § 10(2); Tex. Bus. & Com. Code Ann. § 43.010(c) (Vernon 2002).

[42] See UETA, supra note 20, § 10(2)(A)-(C); see also Tex. Bus. & Com. Code Ann. § 43.010(c)(1)-(3) (Vernon 2002).

[43] See Watson, supra note 22, at 832.

[44] See UETA, supra note 20, § 10(4).

[45] Tex. Bus. & Com. Code Ann. § 43.019(6)(a) (Vernon 2002).

[46] See Revised Article 2, supra note 21.

[47] See Tuma & Ward, supra note 2, at 395 (citing Jeff. C. Dodd & James A. Hernandez, Contracting in Cyberspace, 1998 Computer L. Rev. & Tech. J. 1, 4 (1998)); see also Balloon, supra note 2, at 912-23.

[48] The Revised Article 2 defines electronic agent as a "computer program or an electronic or other automated means used to independently initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual." Revised Article 2, supra note 21, U.C.C. § 2-103(g).

[49] Id. § 2-204(4)(a) (emphasis added).

[50] Id. § 2-213(1).

[51] Microsoft's Passport.com, available at http://www.passport.com (last visited May 7, 2002).

[52] See Passport.com "Terms of Use" web page, available at http://www.passport.com/Consumer/TermsOfUse.asp?lc=1033 (last visited May 7, 2002).

[53] PCConnection.com, available at http://www.pcconnection.com (last visited July 30, 2002).

[54] See PCConnection.com's "Terms, Conditions and Trademarks" web page, available at http://www.pcconnection.com/scripts/about/caveat.asp (last visited May 7, 2002).

[55] Id.

[56] See Amazon.com, available at http://www.amazon.com (last visited July 3, 2002).

[57] See Amazon.com's "Conditions of Use" web page, available at http://www.amazon.com/exec/obidos/tg/browse/-/508088/002-7196287-1807205 (last visited May 7, 2002).

[58] Id.

[59] Id.

[60] See the AAA's "Rules and Procedures" web page, available at http://www.adr.org/index2.1.jsp?JSPssid=11886 (last visited May 7, 2002).

[61] Id.

[62] See id. at "WebFile" home page, available at http://www.adr.org/index2.1jsp (last visited May 7, 2002).

[63] Tieste, supra note 12, at 991; Ethan Katsh, Online Dispute Resolution: Some Lessons from the E-Commerce Revolution, 28 N. Ky. L. Rev. 810, 811 (2001).

[64] See Katsh, supra note 63, at 816.

[65] See Ponte, supra note 2, at 60-65.

[66] See VMAG web site, available at http://www.vmag.org (last visited May 7, 2002). VMAG was originally a joint venture of the AAA, the Cyberspace Law Institute, the Villanova Center for Information Law and Policy, and funded by the National Center for Automated Information Research, a New York-based law and technology foundation. See Alejandro E. Almaguer & Roland W. Baggott III, Shaping New Legal Frontiers: Dispute Resolution for the Internet, 13 Ohio St. J. on Disp. Resol. 711, 719 (1998).

[67]

Sysops are owners or managers of systems on which these information distribution activities take place. Large corporations such as America Online or CompuServe are sysops, as are smaller Internet service providers and bulletin board operators. Such enterprises provide the accounts, software, and other means that allow one to engage in publishing and other communicative activities. However, while the sysop provides the means for publishing to occur, it may or may not have any control over or involvement in the activity.

See Katsh, Dispute Resolution, supra note 10, at 964.

[68] See FAQs at Virtual Magistrate web site, available at http://www.vmag.org/docs/FAQ.html (last visited May 7, 2002).

[69] See David Post, Dispute Resolution in Cyberspace: Engineering a Virtual Magistrate System (May 1996), cited in Katsh, Dispute Resolution, supra note 10, at 964.

[70] See E. Casey Lide, ADR and Cyberspace: The Role of Alternate Dispute Resolution in Online Commerce, Intellectual Property and Defamation, 12 Ohio St. J. on Disp. Resol. 193 (1996); Frank A. Cona, Application of Online Systems in Alternative Dispute Resolution, 45 Buff. L. Rev. 975, 980 (1997).

[71] The parties and their locations were: AOL (Virginia), Mr. Tierney (Maine), VMAG Director (Washington D.C.), VMAG Web Site (Pennsylvania), AAA Headquarters (New York City), AAA Administrator (Syracuse, N.Y.), and the VMAG Arbitrator (Arkansas). See George H. Friedman, Alternative Dispute Resolution and Emerging Online Technologies: Challenges and Opportunities, 19 Hastings Comm. & Ent. L.J. 695, 705 (1997).

[72] See Virtual Magistrate web site, available at http://www.vmag.org (last visited Mar. 22, 2002).

[73] See Online Ombuds Office at the University of Massachusetts web site, available at http://aaron.sbs.umass.edu/center/ombuds/default.htm (last visited May 7, 2002).

[74]

IRC is short for Internet Relay Chat, a chat system developed by Marko Ukraine in Finland in the late 1980s. IRC has become very popular as more people get connected to the Internet because it enables people connected anywhere on the Internet to join in live discussions. Unlike older chat systems, IRC is not limited to just two participants. To join an IRC discussion, you need an IRC client and Internet access. The IRC client is a program that runs on your computer and sends and receives messages to and from an IRC server. The IRC server, in turn, is responsible for making sure that all messages are broadcast to everyone participating in a discussion. There can be many discussions going on at once; each one is assigned a unique channel.

See Internet "Webopedia," available at http://www.webopedia.com/TERM/I/IRC.html (last visited May 7, 2002).

[75] See Cona, supra note 70, at 989.

[76] See Center's web site, available at http://www.ombuds.org/center/index.html (last visited May 7, 2002).

[77] See Katsh & Rifkin, supra note 10, at 64-65.

[78] See Ethan Katsh's comments at the Federal Trade Commission workshop for Resolution of Online Dispute Resolutions, June, 2000, available at http://www.ftc.gov/bcp/altdisresolution/comments/katsh.htm (last visited May 7, 2002).

[79] See Karim Benyekhlef et al., Reflections on Conflict Management in Cyberspace, 7-9, available at http://www.disputes.net/cyberweek2000/ohiostate/CyberjusENGLISH.htm (last visited May 7, 2002).

[80] Id.

[81] Id.

[82] Id.

[83] ICC Rules of International Arbitration, available at http://www.iccwbo.org/court/english/arbitration/rules.asp (last visited Apr. 22, 2002).

[84] UNCITRAL's Working Group on Arbitration, available at http://www.uncitral.org/english/workinggroups/wg_arb/index.htm (last visited Apr. 22, 2002).

[85] Joseph A. Zavaletta & Rodolphio Sandoval, Using the Internet to Facilitate the Resolution of Private International Disputes under NAFTA, available at http://www.lexopolis.com (last visited July 30, 2002).

[86] The two most popular web browsers are Internet Explorer, available at http://www.microsoft.com/windows/ie/downloads/ie6/default.asp (last visited Apr.22, 2002) and Netscape, available at http://browsers.netscape.com/browsers/main.tmpl (last visited Apr. 22, 2002). For a comparison of the features between the two browsers, see Webmonkey's Chart, available at http://hotwired.lycos.com/webmonkey/reference/browser_chart/ (last visited Apr. 22, 2002).

[87] Broadband technologies, such as Digital Subscriber Line (DSL), and cable TV modems, allow very fast Internet connection speeds. DSL is a

service that offers a faster Internet connection than a standard dial-up connection. DSL technology uses existing 2-wire copper telephone wiring to deliver high-speed data services to homes and businesses. DSL uses the existing phone line and in most cases does not require an additional phone line. This gives 'always-on' Internet access and does not tie up the phone line.

See Everything DSL web site, available at http://www.everythingdsl.com/whatis/ (last visited Apr. 22, 2002). Cable TV companies, such as Time Warner, can deliver broadband Internet connection via their cable connection. See Time Warner's "Road Runner" cable modem web site, available at http://www.rr.com/rdrun/ (last visited Apr. 22, 2002).

[88] Instant Text Messengers rely on IRC technology to communicate in real time on the Web. See supra note 74. Popular instant messengers are available, for example, from Yahoo!, available at http://messenger.yahoo.com/; Microsoft Network, available at http://messenger.msn.com/; America Online, available at http://www.aol.com/aim/home.html; IRC, available at http://web.icq.com/ (all last visited Apr. 22, 2002).

[89] Java is a computing language developed by Sun Microsystems that allows executable programs called "java applets" to be distributed over the World Wide Web. A java applet is a virtual computer program that is downloaded onto the machine of the user and allows the user to run the applet. See Sun Java web site, available at http://java.sun.com/ (last visited Apr. 22, 2002).

[90] Ben Charney, Intel's Grove Beams up Wireless Vision, ZDNet News, Mar. 19, 2002, available at http://zdnet.com.com/2100-1105-863547.html (last visited Apr. 22, 2002).

[91] See Blackberry home page, available at http://www.blackberry.net/ (last visited Apr. 22, 2002). The Blackberry can receive and send e-mail messages via its wireless network. See id.

[92] Tiffany Kary, Wireless: Sprint Joins Text Drive, ZDNet News, Mar. 14, 2002, available at http://zdnet.com.com/2100-1105-860536.html (last visited Apr. 22, 2002).

[93] See Tieste, supra note 12, at 999-1000.

[94] See Clicknsettle.com web site, available at http://www.clicknsettle.com (last visited Apr. 22, 2002).

[95] See Cybersettle.com web site, available at http://www.cybersettle.com (last visited Apr. 22, 2002).

[96] See Katsh, supra note 78.

[97] Tieste, supra note 12, at 1001.

[98] See, e.g., a list of ODR providers at the University of Massachusetts Center For Technology and Dispute Resolution, available at http://www.ombuds.org/center/onlineadr.html (last visited Apr. 22, 2002); ODR News web site, available at http://www.odrnews.com/services.htm (last visited Apr. 22, 2002).

[99] See I-Courthouse.com web site, available at http://www.icourthouse.com (last visited Apr. 22, 2002).

[100] See Squaretrade.com web site, available at http://www.squaretrade.com (last visited Apr. 22, 2002).

[101] See AAA web site, available at http://www.adr.org (last visited Apr. 22, 2002).

[102] See I-Courthouse.com web site, supra note 99.

[103] Id.

[104] See I-Courthouse.com's Rules of Procedure, available at http://www.i-courthouse.com/main.taf?area1_id=front&area2_id=rulesofproc (last visited Apr. 22, 2002).

[105] See I-Courthouse.com's User Agreement, available at http://www.i-courthouse.com/main.taf?area1_id=front&area2_id=useragreement (last visited Apr. 22, 2002).

[106] I-Courthouse.com's User Agreement provides, for example, that users shall not

[t]ransmit any content that is unlawful, harmful, threatening, abusive, harassing, tortious, defamatory, vulgar, obscene, libelous, invasive of another's privacy, hateful, or racially, ethnically, or otherwise objectionable; impersonate any person or entity, including but not limited to an I-C representative, or falsely state, conceal, or misrepresent your affiliation with a person or entity; stalk or otherwise harass another; or collect or store personal data about other users.

Id.

[107] See SquareTrade.com's web site, available at http://www.squaretrade.com (last visited Apr. 22, 2002).

[108] See SquareTrade's "About Us" web page, available at http://www.squaretrade.com/cnt/jsp/abt/aboutus.jsp (last visited Apr. 22, 2002).

[109] See SquareTrade's FAQ web page, available at http://www.squaretrade.com/cnt/jsp/sap/learn_seal.jsp;jsessionid=idyxb75yr1?vhostid=tomcat2&stmp=ebay&cntid=idyxb75yr1 (last visited Apr. 22, 2002).

[110] See e-Bay.com's web site, available at http://www.ebay.com (last visited Mar. 20, 2002). e-Bay is the world's largest personal online trading community. e-Bay pioneered one-to-one trading in an auction format on the Web, allowing individuals to buy and sell items in thousands of categories. Buyers and sellers convene on e-Bay to exchange products ranging from automobiles to computers to coins. Every day, e-Bay adds 4 million new auctions and 450,000 new items. See the e-Bay "Overview page, available at http://pages.ebay.com/community/aboutebay/overview/index.html (last visited May 7, 2002).

[111] See e-Bay Community Standards page, available at http://pages.ebay.com/help/community/index.html (last visited Mar. 22, 2002).

[112] See co-branded e-Bay-SquareTrade web site, available at http://www.squaretrade.com/spl/jsp/eby/eb.jsp?marketplace_name=ebay&campaign=EBY_OD_7 (last visited Mar. 22, 2002).

[113] As a value-added service, e-Bay sellers can access a "Non-Paying Buyer" list of buyers who have not responded to SquareTrade "non-payment" cases filed against them. This is much like a self-regulating cyber "Better Business Bureau" report on e-Bay users. See SquareTrade Seal Benefits web page, available at http://www.squaretrade.com/cnt/jsp/sap/buyer.jsp?vhostid=tomcat2&stmp=ebay&campaign=SQT_SSP_EBY (last visited Mar. 20, 2002).

[114] See e-Bay "Dispute Resolution Overview" web page, available at http://pages.ebay.com/services/buyandsell/disputeres.html (last visited Mar. 20, 2002).

[115] Id.

[116] See Katsh & Rifkin, supra note 10, at 179-184.

[117] See e-Bay "Dispute Resolution Overview" web page, supra note 114.

[118] See generally Squaretrade.com, available at http://www.Squaretrade.com/cnt/jsp/index.jsp (last visited July 3, 2002).

[119] Id.

[120] e-Bay agrees to subsidize the balance of the mediation cost. See e-Bay "Dispute Resolution Overview" web page, supra note 114.

[121] Over eighty percent of SquareTrade users have indicated they would use the service again, available at http://www.squaretrade.com/odr/jsp/fil/filing_start.jsp?vhostid=tomcat2&stmp=squaretrade&cntid=41tgovzyy1&memid=tzxmblzym1 (last visited Mar. 20, 2002).

[122] See AAA web site, supra note 101.

[123] See AAA's Webfile login page, available at https://apps.adr.org/webcase2/MainPage.asp (last visited Mar. 20, 2002).

[124] See AAA Webfile demo, available at https://apps.adr.org/webcase2/Demo/WebFileDemo.htm (last visited Mar. 22, 2002).

[125] See Victorio, supra note 10, at 289-93; Hang, supra note 10, at 854-57.

[126] See Friedman, supra note 71, at 712.

[127] See Ware & Cole, supra note 10, at 589.

[128] If digital versions of documents, photographs or evidence do not exist, they can be inexpensively scanned and converted to Adobe Acrobat files and attached to e-mails. See Adobe's web site, available at http://www.adobe.com (last visited Apr. 17, 2002)

[129] See Lide, supra note 70, at 218-20.

[130] See Parrott, supra note 2, at 675.

[131] Richard S. Granat, Creating an Environment for Mediating Disputes on the Internet, presented to the NCAIR Conference on On-Line Dispute Resolution, Washington, D.C. (May 22, 1996), available at http://mediate.com/articles/granat.cfm (last visited Dec. 15, 2001), at 8.

[132] Id.

[133] See generally Robert D. Cooter, Law, Economics & Norms: Decentralized Law for a Complex Economy: The Structural Approach to Adjudicating the New Law Merchant, 144 U. Pa. L. Rev. 1643 (1996); see Almaguer & Baggott, supra note 66, at 717-19; Hang, supra note 10, at 839.

[134] See Lide, supra note 70, at 196.

[135] See Cona, supra note 70, at 976; see also Mark Garavaglia, In Search of the Proper Law in Transnational Commercial Disputes, 12 N.Y.L. Sch. J. Int'l & Comp. L. 29 (1991); Harold J. Berman & Colin Kaufman, The Law of International Commercial Transactions (Lex Mercatoria), 19 Harv. Int'l L.J. 221, 274-77 (1978).

[136] See Cona, supra note 70, at 976.

[137] See Lide, supra note 70, at 196.

[138] See Hang, supra note 10, at 839; Robert C. Bordone, Electronic Online Disputes Resolution: A Systems Approach -- Potential, Problems and Proposal, 3 Harv. Negot. L. Rev. 175, 190-91 (1998). See generally Ethan Katsh et al., E-Commerce, E-Disputes, and E-Resolutions: In the Shadow of 'eBay Law,' 15 Ohio St. J. on Disp. Resol. 705 (2000).

[139] See Hang, supra note 10, at 857; Victorio, supra note 10, at 292-95.

[140] See Ponte, supra note 2, at 86.

[141] See Joel B. Eisen, Are We Ready for Mediation in Cyberspace?, 1998 BYU L. Rev. 1305, 1308 (1998). See generally, John Helie, Technology Creates Opportunities -- and Risks originally published in the January 1999 issue of Consensus, a newspaper published jointly by the Consensus Building Institute and the MIT-Harvard Public Disputes Program, available at http://www.mediate.com/articles/helie2.cfm (last visited Mar. 20, 2002).

[142] See Eisen, supra note 141, at 1327.

[143] Id. at 1354; see also Granat, supra note 131, at 7.

[144] See generally Walter A. Wright, Mediation of Private United States-Mexico Disputes: Will It Work?, 26 N.M. L. Rev. 57 (1998).

[145] Id. at 64.

[146] Id. at 65.

[147] See Bordone, supra note 138, at 178.

[148] See Eisen, supra note 141, at 1331; see also Bordone, supra note 138, at 185.

[149] See Ware & Cole, supra note 10, at 593 (quoting Bruce Bernard Beal, Online Mediation: Has Its Time Come? 15 Ohio St. J. on Disp. Resol. 735 (2000)).

[150] See Ponte, supra note 2, at 90.

[151] See id. at 88-89.

[152] Id.

[153] See Llewellyn Joseph Gibbons, Private Law, Public "Justice": Another Look at Privacy, Arbitration, and Global E-Commerce, 15 Ohio St. J. on Disp. Resol. 769, 774-78 (2000); see Katsh, Dispute Resolution, supra note 10, at 971.

[154] Id. at 972.

[155] See, e.g. Zixmail.com, available at http://www.zixmail.com (last visited Dec. 15, 2001); Pretty Good Privacy, available at http://www.pgp.com (last visited Dec. 15, 2001) (for free software to encrypt e-mail).

[156] See Ponte, supra note 2, at 88-89; Victorio, supra note 10, at 295; Lide, supra note 70, at 221.

[157] See Elizabeth G. Thornburg, Going Private: Technology, Due Process, and Internet Dispute Resolution, 34 U.C. Davis L. Rev. 151, 181 (2000); see also AAA's web page, available at http://www.adr.org/index2.1.jsp?JSPssid=11103 (last visited Mar. 22, 2002).

[158] The U.S. Supreme Court has generally upheld the enforceability of arbitration agreements and decisions. See, e.g., Circuit City v. Adams, 532 U.S. 105, 123 (2001). Contra EEOC v. Waffle House, Inc., 122 S. Ct. 754, 755 (2002) (upholding the right of the EEOC to intervene after the arbitration was concluded).

[159] Article IV, Section 1 of the U.S. Constitution states "Full Faith and Credit shall be given in each State to the public Acts, Records and Judicial Proceedings of every other State."

[160] See Higgins, Brown, & Roach, Pitfalls in International Commercial Arbitration, 35 Bus. Law. 1035 (1980); Pieter Sanders, International Commercial Arbitration, 20 Neth. L. Rep. 37 (1973).

[161] See Peter D. Ehrenhaft, Effective International Commercial Arbitration, 9 Law & Pol'y Int'l Bus. 1191, 1193 n.7 (1977) (citing U.N. Convention on Recognition and Enforcement of Foreign Arbitral Awards, opened for signature June 10, 1958, 21 U.S.T. 2515, T.I.A.S. No. 6997, 330 U.N.T.S. 38, reprinted in 4 Y.B. Comm. Arb. 226 (1976). See also Hope H. Camp, Jr., Binding Arbitration: A Preferred Alternative For Resolving Commercial Disputes Between Mexican and U.S. Business, 22 St. Mary's L.J. 717, 722 (1991).

[162] See Camp, supra note 161, at 722, 723 n.21; see also Inter-American Convention of International and Commercial Arbitration, opened for signature Jan. 30, 1975, OAS SER. A20 (SEPEF), reprinted in 14 I.L.M. 336 (1975).

[163] See Camp, supra note 161, at 723.

[164] See Earthlink Internet Service Agreement, available at http://www.earthlink.net/about/policies/dial/ (last visited Dec. 15, 2001).

[165] See Microsoft Network's' Msn Internet Access Subscription Agreement, available at http://supportservices.msn.com/us/netstatus (last visited Mar. 20, 2002).

[166] See Amazon.com's "Conditions of Use," which is found at the bottom of the Amazon.com home page, available at http://www.amazon.com/exec/obidos/subst/misc/policy/conditions-of-use.html (last visited Mar. 22, 2002).

[167] See Lide, supra note 70, at 221.

[168] See Bordone, supra note 138, at 194; see also Cona, supra note 70, at 983.

[169] See e-Bay.com's Policy on Non-Paying Bidders at the web page, available at http://pages.ebay.com/help/community/npb.html (last visited Mar. 20, 2002).

[170] See Hang, supra note 10, at 860-61.

[171] e-Bay's NPB alerts are usually sent out between seven and forty-five days after the auction closes. See NPB policies, available at http://pages.ebay.com/help/community/npb.html (last visited Mar. 22, 2002).

[172] Id.

[173] See Bordone, supra note 138, at 203-05.

[174] See Lexopolis.com cybercourt web page, available at http://www.lexopolis.com/cybercourt (last visited Mar. 22, 2002).

[175] The author teaches the class The Legal Environment of Business as part of the UT System's consortial MBA Online program delivered via the UT Telecampus, available at http://www.telecampus.utsystem.edu/programs/MBA/mba.html (last visited Mar. 22, 2002).

[176] The next step in the process is to create a pilot project with two law schools, one in Mexico and one in the United States, and begin to experiment with technology and best practices, with the ultimate goal of creating a cross-border center for electronic dispute resolution.

[177] Pam Belluck, Michigan Considers a Cybercourt, N.Y. Times, Feb. 22, 2001, available at http://www.nytimes.com/2001/02/22/technology/22CYBE.html (last visited Mar. 23, 2002).

[178] See Nielsen-Netratings.com, available at http://209.249.142.27/nnpm/owa/NRpublicreports.usageweekly (last visited Mar. 17, 2002).

[179] See the U.S. Commerce Department's report on the Digital Divide, Feb. 5, 2002, available at http://digitaldivide.gov/reports.htm (last visited Mar. 15, 2002).

[180] See Nielsen-Netratings.com 2001 Holiday Index, Jan. 7, 2002, available at http://www.nielsen-netratings.com/2001_Holiday/holiday_release.jsp (last visited Mar. 20, 2002).