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Chapter 34

BU231 Chapter 34

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Wilfrid Laurier University
Keith Masterman

1 READING NOTES CHAPTER 34 – Electronic Commerce Increasingly business is being conducted through the internet and through other electronic means. This creates problems of applying existing legal rules (tort, contract, privacy) and principles to new situations, also raises entirely new legal issues. What is e-commerce? • Broadly defined as the “delivery of info, products, services or payments by phone, computer, or other automated media.”… not just the internet o Electronic retailing eg. real goods, electronic goods, services (both) o Business to business (B2B) transactions account for 85% of all e- commerce Establishing an Online Business 1) Negotiate a website development agreement 2) Website hosting agreement with ISP • ISP thus has liability for interruption of service if ‘the system’ goes down 3) Negotiate an Internet access agreement 4) Register a domain name (trademark conflicts often erupt here) • Precautions when establishing an E-commerce Site o Become familiar with the laws of other countries whom you do business with o Customize contract terms for each country o Design the website so that the terms of the contract are brought to the attention before any contract is concluded (click wrap / web wrap) o State which law and jurisdiction applies to any contracts formed o Don’t give customers freedom to amend terms, just have yes / no, accept decline o Maintain full back-ups of all your contracts made online E-Commerce and the Law • Contract Law o Formation of Contracts  Has any contract been made when you visit a website and add items to shopping cart etc.., if so, when?  It has become common practice to use web-wrap agreements or click-wrap agreements which set out contractual terms and require the consumer to click on the appropriate box to indicate agreement with terms of sale • Need to be designed with care to ensure all intended conditions are brought to the attention of potential customers 2 o The Law Governing the Contract  Proper law of contract  Law of contract can affect: • Capacity of parties to contract, legality of contract, formal requirements of the contract (Statute of Frauds – in writing), applicability of consumer protection (CPA)  Many of these problems may be avoided by a clear statement of the law that is intended to govern, won’t always protect merchant though… eg. CPA may still apply although contract states otherwise • Eg. CPA in Ontario applies to any contract when the customer is in Ontario. Thus, Ontario is attempting to regulate what US businesses can do online when dealing with Ontario such as a 10 day cooling off period, browse wrap agreements o Proof  Important for corporations doing e-business to retain evidence such as e-mails or confirmations o Amending Contracts  Kanitz v. Rogers Cable • Rogers Cable stated that “all we have to do to amend our contract is to post a notice on our website”, court upheld this • Thus, it is the consumers responsibility to periodically check-in at websites and look for postings o E-Commerce Act (2000, Ontario) addresses many of these issues:  S. 5 & 6 – Legal requirement for writing • Requirement is satisfied so long as electronic copies are made accessible and usable for future reference / retainable by customer  S. 11 – Legal requirement for Signatures • Satisfied by an electronic signature meeting particular requirements of jurisdiction  S.19 – Formation and acceptance of Contract • Can be expressed by electronic documents or by acts such as clicking on an appropriate icon or by literally speaking (phone)  S.3 – Legal Recognition of Contracts • Contracts aren’t unenforceable for reason of being electronic 3 • Tort Issues o Tort most closely associated with the internet is defamation, which is usually personal rather than commercial  Eg. If you post comments online on a blog, the number of people you owe a duty of care to gets huge o Fraud Issues  Internet often robs you of the ability to actually see products, touch them o Privacy Issues  Duty to protect information from hackers or people who would steal directly from your hard-drive  Addressed more specifically with PIPEDA Intellectual Property • Copyright o Expression of idea, ‘work’ of art, essay, music o Concept underlying copyright is that the advancement of society comes from the building of ideas, develop by sharing knowledge  Yet, there is no incentive to generate new works if they are freely shared immediately… Can’t feed your family with good ideas o Copyright duration is often the life of the person + 50 yrs. o Don’t need to officially register things for them to be copyright, just need to put the © on the work o Plagiarism vs. Copyright Infringement  Plagiarism is when you claim someone else’s works as your own • Duty to give credit to the author  Copyright infringement is when you acknowled
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