Legal Audits for E-Commerce Copyright (c) 2000 Montana Law Review Montana Law Review Winter, Mont. L. Rev. 77 by Richard C. Bulman, Jr., Esq. and Jorge R. Gutierrez, Esq.

Summary Review of the legal issues that E-commerce raises is an important step businesses can take to limit liability and protect their interests. Due process reviews have as much value to e-business as they do for more traditional business functions.

Software - usually software is rented but when software is customized there are issues about the commercial platform products by Microsoft or Lotus that the software runs on. Web site developer agreements typically address features to be incorporated into the web pages, data collection process, progress payments, warranties,

Hardware - if purchased the sales agreement will address delivery and set up, technical services and maintenance services and fees for various items. If space on an ISP’s server is rented the agreement with the ISP will need to be reviewed.

ACCESS - Hosted site, items in agreements response time, space requirement, cost scalability, remedies for - down time, lost data, warranties against viruses and downtime. Security - communication with customers and third parties like credit card companies needs to be protected. Agreements with the service provider to provide security needs to be scrutinized because integrity of a site and its data is critical.

Maintenance - to avoid downtime service contracts for the various components need to be coordinated. To avoid lost time during finger pointing of who’s fault is it stage a maintenance service contract might be advisable. Service agreements need to address urgency, how support will be provided (onsite - remotely) Information - gathering info is one key benefit of having a web site agreements for third party should include off site storage, backup, security, and security of data and access controls

Integration - the ability to collect and harness information in the business process to make purchasing, marketing and other business decisions. Agreements with each provider of a piece of the system need to cover who will solve any problem that arises. Business interruption insurance can be valuable to cover the risk of loss of operations.

Web Site Issues Copyright - Who owns work product when a person is hired to create a web site. This needs to be spelled out in contracts Licenses - media that can be presented through a web site can have licensing issues if it requires proprietary, song clips are a clear example. Any license issue related to a web site that can be identified should be addressed via agreement or license. Patents - now that a patent has been issued for an algorithm there has been a rush to patent new ways of doing business.

Disclosures Terms and Conditions of Use - content ownership, right to edit, passwords, contest rules, storage, security, limits on liability, Privacy - What data is required and what is voluntary to use site, how data will be used, whether it will/can be sold, what limits can be placed on the conveyance of data and any retroactive steps offered to have data removed from a database.

Domain Names - need to be reviewed along with Trademarks to ensure that rights are protected and site does not infringe Advertisement - traditional contracts - what services will be provided, what costs who owns rights and licenses Online Advertisement - cost, size, placement, location, use of cookies, frequency Linking/Framing - agreements cover issues like the use of intellectual property, placement of links, consideration for the use

Affiliate Programs - show products available for sale on your site but direct consumer to vendor’s site to make purchase. Terms - commission, tracking, reporting, payments, termination, indemnification. B2B - standing agreements Click here to Accept - this form of establishing terms has yet to be sorted out legally.

B2C - US courts seem to accept site terms if dealing with other countries should learn whether special protections or requirements are extended by their laws. Capturing data on the location of customers can help with this effort Payment - upfront fees by credit card companies can be costly especially in the event of rejected or canceled transactions review of terms and related to currency fluctuations can help

Agreements with trusted delivery service can aid in handling problems caused by fraud artists.

Emerging Areas Regulating data collected from children Disclosures - truthful, ethical, meaningful Standardization - EU and UNCITRAL Taxation - It might be coming - investigate jurisdiction without taxes.