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Electronic Commerce Electronic Commerce What is it What regulates it by dandanhuanghuang


									Electronic Commerce
   What is it? What
   regulates it?
What is a contract?
 A legally binding agreement between two
  or more people or organisations
 Terms of a contract may be expressed in
  writing or orally, implied by conduct,
  industry custom, and law or by a
  combination of these things
Elements of an Enforceable
 Offer
 Acceptance
 Consideration
 Intention to create legal relations
 Legal Capacity
Standard Elements
   Most contracts contain:
       Identification of the parties
       Description of subject matter
       Price, delivery, payment
       Warranties, liabilities, dispute resolution
       How orders are placed
       Record keeping, audit trails
       Security, format, authentication of messages
       When and where messages sent/received
       Responsibility for lost/garbled messages
       Law governing the transaction
Formation of Contract
 By Email
 By Click Wrap
Invitation to Treat
 Pre-Internet doctrine
 See, eg, Fisher v. Bell [1961] 1 QB 394
  per Lord Parker:
  “the display of an article with a price on it
  in a shop window is merely an invitation to
 Also pre-Internet
 Common, mutual and unilateral varieties.
 If a seller makes a mistake (unilateral
  mistake) a court may set aside the
 Key question - did the buyer know/ought
  to have known of the mistake?
Applications to E-commerce
 Kodak
 Argus
 All three companies advertised products
  at a mistaken price. Kodak eventualy
  honoured ‘contracts’ whereas the others
Case-Study: Kodak
 Early 2002, advertised a
  digital camera for £100 (normally £329)
 Denied contracts had been formed:
     Standard terms on site
     Defence of mistake
     Was only invitation to treat

   Buckled under pressure and honoured
Case-Study: Argos
 Late 99, offered a Sony TV
  Set for £3. By the time mistake
  discovered, £1 million of orders had been
  made, one person ordering 1700 sets
 Did not honour contracts.
Case Study: Amazon
 Early 2003, offered a HP
  iPaq H1910 for £7.32 (not £287)
 At midday, pulled entire store
 Amazon referred people who had ordered
  to Conditions of Use governing contract
Electronic Contracts
Electronic Transactions Acts
   Cth Electronic Transactions Act 1999
       Affects operation of all Cth laws
   NSW Electronic Transactions Act 2000
       Affects operation of all laws in force in NSW (written
        or not), except Cth laws - broader effect
       Other States/Territories similar
   Based on UNCITRAL Model Law 1996
    (UN Commission on International Trade Law)
   2 Principles guided 1998 Expert Group report
       Functional equivalence
         • electronic transactions treated same as paper-based
       Technological neutrality
         • no discrimination favouring any particular technologies
         • Eg No special provision for PKI-based signatures
       Sneddon: a ‘facultative’ law, making electronic
        transactions as legally effective as others
   Contrast more ambitious legislation
       EC Directive on electronic signatures (1999)
       Hong Kong Electronic Transactions Ordinance
Electronic contracts at common
   Most contracts do not require writing
       But ETAs are particularly helpful where they do
   No general rule requiring signatures
       but party enforcing otherwise has evidentiary burden
        that the other party was aware of terms and agreed
        to them
   Many forms of ‘signature’ have been accepted
       intention to agree and authenticate needed
   Many possible disputes (eg ‘click-wrap’)
Effect of Acts
       (ET/ EC = electronic transaction / communication)
   validity of ETs generally (Cth s8, NSW s7);
    electronic satisfaction of legal requirements:
       for writing(Cth s9, NSW s8),
       for signatures (Cth s10, NSW s9),
       for production of documents (Cth s11, NSW s10)
       for retention of documents (Cth s12, NSW s11);
    when/where ECs are deemed to be dispatched
    and received (Cth s14, NSW s13);
   to whom ECs shall be attributed (Cth s15, NSW
Cth Agencies
 Transactions not with Cth agencies -
  other party must consent to form of
 Cth govt entities must accept ET
       But may specify the form of communication
   No similar special provision re NSW
Storage of electronic records
 ETA allows electronic records to be kept
 Records must be kept under:
 Proceeds of Crime Act 1987 (Cth)
 Income Tax Assessment Act 1936 (Cth)
 EFT Code of Conduct
E-Commerce Best Practice
 Fed Govt best practice guidelines:
 Not force of law, but merely guidelines.
Consumer Protection
Trust and Confidence
 How do sites enhance the trust of their
 Money back guarantees (eg Amex,
 Seal/Tick programmes (ie IIA’s Family
  Friendly ISP seal)
 Provide information (eg Amex, NineMSN)
Policy Framework
 Australia has a policy framework for
  consumer e-commerce issues.
 Contract
  ETAs mirroring UNCITRAL provisions
 Payment
  EFT Code of Conduct
 Conduct
  IIA Codes of Practice
Consumer Credit Code
 Uniform Consumer Credit Code applies to
  consumer credit transactions, mirror
  legislation is in every state.
Trade Practices Act
 TPA 1974 (Cth), applies generally to
  coporations not individuals
 Will:
     Imply terms and conditions into transactions
     Prohibit unconscionable conduct and
     Prohibit misleading or deceptive conduct
Australian Codes of Conduct
 EFT Code of Conduct
 Smart Card Code of Conduct
 Telecommunications Codes
 Internet Industry Association Code
 ADMA Code of Practice
 Federal Govt’s Model Code
EFT Code of Conduct
 Electronic Funds Transfer Code of
 Voluntary, but popular and widely adopted
 Covers ‘electronic transfers of value’
 See ASIC website
Smart Card Code
 Asia Pacific Smart Card Forum Code of
 Published 1997
 Has compliance logo
Telecommunications Codes
   Australian Communications Industry
    Forum developing codes under the
    Telecommunications Act 1975 (Cth)
IIA Code of Conduct
 Internet Industry Association has a
  number of codes
 Relevant to consumer protection is the
  Content Regulation Code
 Australian Direct Marketing Association
  Industry Code of Practice (2000)
 Contains short section on electronic
Cth Model Code
 Repeats the text of OECD Guidelines on
 A “Virtual Code”
International Regimes
 EU Directive “on the protection of
  individuals with regard to the processing
  of personal data and on the free
  movement of that data”
 OECD Guidelines on Consumer
  Protection in Electronic Commerce

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