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Chapter 32

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Department
Business
Course
BU231
Professor
Valerie Irie
Semester
Winter

Description
BU231 Chapter 32 – Electronic Commerce E-commerce What is E-Commerce? -Electronic commerce/e-commerce – the use of computer networks to facilitate commercial activities, including the production, distribution, sale, and delivery of goods and services -Internet – the interconnected logical networks that link computers worldwide -Intranet – closed systems linking specific users internal to a company or group; commonly used for data exchange The Impact of E-Commerce on Business -E-commerce has brought fundamental change to the business world in three key areas: -existing business practices -new industries -the business environment Existing Business Practices -Traditional businesses are adapting all facets of their operations to the online model -Electronic retailing/E-retailing – the supply of tangible or electronic goods or services over the Internet. Supply of tangible goods involves a conventional mode of delivery; electronic goods are downloaded directly to the customer’s computer -Electronic transfer of funds – payment made through electronic media such as telephone or Internet rather than by cash or cheque. Payment may take the form of credit card charges, debit or bank accounts, or even e-cash. Often customers can access these forms of payment on the business’s website Establishing a Website -Steps: -Negotiate a website development agreement -Negotiate a website-hosting agreement -Negotiate an Internet access agreement with the Internet Service Provider (ISP) -Register a domain name and protect the intellectual property associated with the website New Industries -E-cash – an online payment system that enables the anonymous transfer of money over the Internet -Payment card networks – an electronic payment system used to accept, transmit, or process transactions made by payment card to transfer funds or information among issuer, user, and merchants -E-wallets are systems such as PayPal -Smart cards use an embedded integrated circuit chip in place of the conventional magnetic strips Business Environment -The global nature of the Internet offers businesses access to customers and suppliers from around the world -E-commerce is one of the major reasons why business has “gone global” The Impact of E-commerce on the Law -E-commerce is responsible for the development of new legal principles in areas such as privacy and consumer protection BU231 Chapter 32 – Electronic Commerce E-Commerce and the Law Contract Law Formation of Contracts -Any firm planning to engage in e-commerce should design its website to spell out very clearly the legal consequences of clicking on each icon -Web-wrap agreement – a website document setting out contractual terms, the acceptance of which is indicated by clicking on the appropriate icon -Web-wrap agreements need to be designed to ensure than all intended terms and conditions are brought to the attention of potential customers The Law Governing the Contract -There needs to be a clear statement of the law that is intended to govern, although consumer protection legislation in the customer’s country may still apply, regardless of such a statement Formal Requirements -Information shall not be denied legal effect or enforceability solely by reason that it is in electronic form -A requirement under law that information be in writing is satisfied by information in electronic form if the information is accessible so as to be usable for future reference -A requirement under law for the signature of a person is satisfied by an electronic signature Consumer Protection Legislation -Protective measures include mandatory disclosure of terms, cancellation rights or cooling-off periods, and printable consumer copies -Consumer protection laws may apply to transactions completed outside their specific jurisdiction -The Ontario legislation applies to all consumers located in Ontario, no matter where the vendor or the goods are based -An online vendor needs to be familiar with the specifics of the consumer protection laws in relevant jurisdictions Torts -The tort most often associated with the Internet is defamation -It is through an ISP that a person may place information on the Internet or access information placed there by some other person -Linking/hyperlinking – an electronic connection of one website to another website. Links may be automatic or activated by the user. The new website may replace the original website or open in its own frame or browser window -E-commerce can give rise to claims in tort in other ways Intellectual Property Trademarks -Trademark – an identifiable feature that is used by a person for the purpose of distinguishing their goods or services from those of others -Passing-off – a common law tort involving the misrepresentation of goods, services, or a business in such a way as to deceive the public into believing that they are the goods, services, or business of some BU231 Chapter 32 – Electronic Commerce other person -Without the Internet, each business would likely have been oblivious to the existence of the other -Unauthorized linking of websites may be trademark infringement if it suggests affiliation, endorsement, or sponsorship -Infringement is most likely when the link is opened in its own frame within a single browser window so that both websites are visible at the same time Domain Names -Domain name – the registered Internet address of a website -Trademark infringement sometimes results from the similarity of Internet addresses -Although no two domain names are
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