Sat, Aug. 26, 2006

Ticket by Cellphone

.   10 years ago, purchasing items by cellphone became a hot topic with the rise of Nokia smartphones. Now, the technologies involve Java and MMS, and large companies join the fray. The most recent offering is from the main railway company in Germany, Deutsche Bahn AG, which began selling tickets to passengers by transmitting them to their cellphones through the MMS protocol. Since there is no writing requirement in German law for most everyday contracts, the transaction seems simple from a legal perspective.

But there are numerous hidden issues. When does the contract come about? The user needs to register with Bahn, then apply online for a ticket and finally provide payment information. At this point, the passenger's main contractual obligation appears to have been performed. By contrast, Bahn's primary performance obligations appear to begin at this point.

Bahn needs to transmit the ticket to the passenger's cellphone--which the passenger, as a secondary obligation, needs to keep active--and provide transportion. Before Bahn does so, however, it requires the passenger to perform additional secondary obligations: Display the cellphone to the conductor and present an ID or credit card. Otherwise, Bahn reserves the right to step back from its obligation to transport the passenger.

There appear to be a number of potential missteps--an empty battery being one, a retransmission to another cellphone another. Beyond technical missteps, a number of legal mishaps lurk. Presumably, Bahn has learned from the experience of smaller players over the past decade. Yet, Bahn's general terms and conditions ask for a printout--a requirement not currently matched by the capabilities of many cellphones.

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