Copyright © 2009 by Pearson Prentice Hall. All rights reserved. PowerPoint Slides to Accompany CONTEMPORARY BUSINESS AND ONLINE COMMERCE LAW 6 th Edition by Henry R. Cheeseman Chapter 15 E-Contracts, Internet Law, and Cyber Crimes

15 - 2Copyright © 2009 by Pearson Prentice Hall. All rights reserved. The Internet and World Wide Web E-Commerce E-Commerce The sale of goods and services by computer over the Internet Internet Internet A collection of millions of computers that provide a network of electronic connections between computers World Wide Web World Wide Web An electronic connection of computers that support a standard set of rules for the exchange of information

15 - 3Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Electronic Mail ( ) Electronic written communication between individuals using computers connected to the Internet Controlling the Assault of Non-Solicited Pornography and Marketing Act Controlling the Assault of Non-Solicited Pornography and Marketing Act Called the CAN-SPAM Act Prohibits spammers from using falsified headers in e- mail messages Requires spammers who send sexually oriented to properly label it as such

15 - 4Copyright © 2009 by Pearson Prentice Hall. All rights reserved. and Web Contracts is sometimes the method used to negotiate and agree on contract terms and to send and agree to the final contract Assuming that all of the elements to establish a contract are present, an contract is valid and enforceable Statute of Frauds Electronic contracts meet the writing requirements of the Statute of Frauds for most contracts

15 - 5Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Electronic Signatures Electronic Signature in Global and National Commerce Act (E-Sign Act) Electronic Signature in Global and National Commerce Act (E-Sign Act) Recognizes and gives electronic signatures the same force and effect as a pen-inscribed signature on paper The act is technology neutral i.e., the law does not define or decide which technologies should be used to create a legally binding signature in cyberspace The act specifies ways to verify electronic signatures

15 - 6Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Internet Domain Names Domain name Domain name – a unique name that identifies an individual’s or company’s Web site. Internet Corporation for Assigned Names and Numbers Internet Corporation for Assigned Names and Numbers (ICANN) Approves registrars of domain names Domain names may be registered by filing the appropriate form with the domain name registration service and paying the appropriate fee.

15 - 7Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Anticybersquatting Consumer Protection Act of 1999 Aimed at cybersquatters who register Internet domain names of famous companies and people and hold them hostage by demanding ransom payments from the company or person. The name must be famous The domain name was registered in bad faith

15 - 8Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Uniform Computer Information Transactions Act (UCITA) A model act that provides uniform and comprehensive rules for contracts involving: computer information transactions software licenses information licenses

15 - 9Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Licensing (1 of 2) Intellectual property and information rights are valuable assets of individuals and businesses License License – a contract that transfers limited rights in intellectual property and informational rights. Licensor Licensor – the owner of intellectual property or informational rights who transfers rights in the property or information to the licensee.

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Licensing (2 of 2) Licensee Licensee – the party who is granted limited rights in or access to intellectual property or informational rights owned by the licensor. Exclusive License Exclusive License – a license that grants the licensee exclusive rights to use informational rights for a specified duration.

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Licensing Arrangement License (transfer of rights in intellectual property or information) Licensor Licensee

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Exclusive License A license can grant the licensee the exclusive rights to use the information. Exclusive license Exclusive license – means that for the specified duration of the license, the licensor will not grant to any other person rights in the same information. [UCITA § 307(f)(2)]

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Licensing Agreement Detailed and comprehensive written agreement between the licensor and licensee It sets forth the express terms of their agreement

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Access Contract Grants the licensee the right to access information in the possession of the licensor For an agreed-upon time or number of uses The licensee’s access to the information must be available at times and in a manner that complies with the express terms of the contract

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Electronic Errors (1 of 2) Uniform Computer Information Transactions Act (UCITA) The Uniform Computer Information Transactions Act (UCITA) provides that consumers are not bound by their unilateral electronic errors if the consumer: 1.Promptly upon learning of the error notifies the licensor of the error 2.Does not use or receive any benefit from the information, or make the information or benefit available to a third party

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Electronic Errors (2 of 2) 3.Delivers all copies of the information to the licensor or destroys all copies of the information, pursuant to reasonable instructions from the licensor 4.Pays all shipping, reshipping, and processing costs of the licensor [UCITA § 217] Section 217 of the UCITA only applies to consumers who make electronic errors in contracting

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Express Warranty Any affirmation of fact or promise by the licensor about the quality of its software or information The UCITA does not require a licensor to make an express warranty about the quality of its software or information [UCITA § 402] The UCITA permits a licensor to disclaim all implied warranties [UCITA § 406(c)]

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Breach of License Agreements (1 of 2) The parties to a contract for the licensing of information owe a duty to perform the obligations stated in the contract If a party fails to perform as required, there is a breach of the contract Breach of contract by one party to a licensing agreement gives the non-breaching party certain rights, including recovering damages or other remedies [UCITA § 701]

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Breach of License Agreements (2 of 2) Licensee’s refusal of defective tender Licensee’s revocation of acceptance Adequate assurance of performance

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Remedies remedies The UCITA provides various remedies that injured parties can obtain against breaching parties: Cancellation Licensor’s damages Licensor’s right to cure Licensee’s damages Specific performance Liquidation of damages

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Limitations of Remedies The UCITA provides that the parties to an agreement may limit the remedies available for breach of the contract Limitation of remedies in licenses subject to the UCITA are enforceable unless they are unconscionable [UCITA § 803]

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Electronic Communications Privacy Act (ECPA) Makes it a crime to intercept an “electronic communication” At the point of transmission While in transit When stored by a router or server After receipt by the intended recipient Makes it illegal to access stored as well as in transmission

Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Online Privacy ECPA – crime to intercept electronic communications with exceptions: employer, government and law enforcement. Cyber Crimes Counterfeit Access Device and Computer Fraud and Abuse Act EFTA Identity Theft and Assumption Deterrence Act of 1998 IIP Act State Criminal Laws