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University of Pennsylvania Journal of Business Law

First Page

350

Publication Date

Summer 2024

Document Type

Article

Abstract

Franchisees often sign agreements without understanding the contract to which they have theoretically agreed. Digital business technology has become the norm across the world, however; and electronic contracts—e-contracts—come with a unique set of advantages—faster turnaround, seamless integration, increased flexibility—and also a unique set of challenges.

This Article considers the technological developments and ramifications of digital contracts and the resulting behavior of franchise parties. It briefly discusses acceptance and then delves into cases and legislation, both domestic and foreign, about different categories of electronic contracts. Finally, this Article examines technology’s impact on franchise contract formation. As the process becomes faster and more fluid, the parties’ actual knowledge and decision-making prowess should increase. Still, while the technology may assist franchise disclosure and franchisee sophistication, problems arise from the stigma that e-signatures are not wholly enforceable, and from consumers’ failure to understand the terms of the contract, and, in some cases, their role as offeror or offeree. Solving these problems likely requires legal reform as well as improved business and contracting practices; it perhaps depends on a cultural shift. Certainly, it demands from parties, lawyers, and adjudicators more personal experience and, in general, education.

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