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Table of Contents

Lead Story

Tapping into portfolio power players


Industry Update

Debit surcharges targeted by California lawmakers

Have NFC payments reached tipping point?

Skimmers shifting from ATMs to gas pumps

Trade Association News

Selling Prepaid

Prepaid in brief

Legislative fallout for gift card providers

Thom Aldredge
World Gift Card


ISOs, MLSs and financial services re-regulation

Patti Murphy
The Takoma Group

Fraud trends in 2010

Nicholas Cucci
Network Merchants Inc.


Street SmartsSM:
Variations on valuations

Ken Musante
Eureka Payments LLC

Going global in Europe

Caroline Hometh

Succeeding at PCI compliance - Part 4: Maintaining the program

Dawn M. Martinez
First Data Corp.

Technical details: What to share and what to spare

Dale S. Laszig
Castles Technology Co. Ltd.

Are your online contracts enforceable?

Sarah Weston
Jaffe, Raitt, Heuer & Weiss PC

The proper care and feeding of LinkedIn

Marc W. Halpert

Company Profile

Federated Payment Systems LLC

New Products

iPhone terminal with gateways galore

iPay POS
Rapadev LLC


Shuffling the deck on negative people


10 Years ago in
The Green Sheet


Resource Guide


A Bigger Thing

The Green Sheet Online Edition

August 23, 2010  •  Issue 10:08:02

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Are your online contracts enforceable?

By Sarah Weston

Savvy companies look for faster, more convenient ways to do business. For example, some companies allow their merchants and ISOs to enter into contracts over the Internet.

Thanks to federal and state laws, contracts entered into via the Internet are as enforceable as those signed with pen on paper; however, Internet-specific contracts require extra steps before execution. Here are tips to make sure your online contracts will be enforceable.

Ensuring assent

Like traditional contracts, online contracts require assent to the terms of the agreement (among other conditions) to become valid. To meet the requirements for online assent, the process must provide:

Amending the online contract

A time may come when you want to change the terms of a contract. Be careful when amending online contracts because specific language is required.

Abiding by card brand rules

The card company rules also address contract enforceability. For instance, the rules require merchant contracts to be in writing and signed by the merchant and the member; however, they don't specifically require that they be signed with a pen.

Each party to the online merchant agreement must sign the contract, either manually or electronically.

All requirements imposed by traditional laws relevant to original signature contracts, such as know-your-customer and card organization site inspection rules, apply equally to agreements signed electronically.

You can take several steps when posting your agreements online to help ensure enforceability. By providing evidence that the other party actually knew of the contract terms before entering into the agreement, you can almost eliminate the possibility that your contract will be deemed unenforceable.

Additionally, while the safest approach is to get the other party's explicit consent to amend each contract, if you do not want to go through the time and effort to obtain each party's approval to every amendment, then at least be sure:

These recommendations are general suggestions; they are not a substitute for legal advice. For specific information, consult experienced legal counsel. Sarah Weston is an attorney at Jaffe, Raitt, Heuer & Weiss PC and advises businesses on contract and regulatory issues in the merchant acquiring, stored value, automated clearing house and payment systems industries. You can reach her at 248-351-3000 or at

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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