Business Law for the Entrepreneur and Manager Chapter 10 – Internet Law Frank Cavico and Bahaudin G. Mujtaba © Cavico & Mujtaba, 2008

Business Law for the Entrepreneur and Manager (Frank Cavico & Bahaudin g. Mujtaba, 2008; ILEAD Academy, LLC) Table of Contents – Chapter Titles Chapter 1 – Introduction to Law and the Legal System Chapter 2 – Torts and Business Chapter 3 – Products Liability Chapter 4 – Contract Law Chapter 5 – Sales Law and the Uniform Commercial Code Chapter 6 – Agency and Employment Law Chapter 7 – Business Organizations Chapter 8 – Commercial Paper and Banking Transactions Chapter 9 – Creditors and debtors – Rights and Responsibilities Chapter 10 – Internet Law Chapter 11 – Intellectual Property Law Chapter 12 – Real Property Law Chapter 13 – International Business Law Chapter 14 – Liability of Accountants and Other Professionals Chapter 15 – Wills and Trusts Chapter 16 – Personal Property, Gifts, and Bailment Chapter 17 – Conclusion and Case Problems © Cavico & Mujtaba, 2008

Chapter Topics On-line Contracts Uniform Electronic Transaction Act Uniform Computer Information Transaction Act Electronic Signature in Global and National Commerce Act Conclusion Internet Privacy – The Electronic Communications Privacy Act Internet Domain Names – The Anticybersquatting Consumer Protection Act Summary © Cavico & Mujtaba, 2008

Internet Regulation On-line Contracts The legal system in the United States has promulgated three very important statutes governing e-contracts: The Uniform Electronic Transactions Act (UETA) The Uniform Computer Information Transactions Act (UCITA) The federal Electronic Signature in Global and National Commerce Act © Cavico & Mujtaba, 2008

Uniform Electronic Transaction Act The objective of the Uniform Electronic Transaction Act (UETA) is to place electronic records and signatures on the same level as paper contracts and written signatures UETA applies only to those transactions between parties or entities which have agreed to conduct their business transactions by electronic means There are two major components of UETA: First, an electronic record will satisfy the writing requirement of the Statute of Frauds Second, an electronic signature is equal to a written signature on a paper contract UETA maintains that an electronic signature will have the same effect as a notarized signature if the signature includes all the standard information as required in an oath © Cavico & Mujtaba, 2008

Uniform Computer Information Transaction Act UCITA is a model act that establishes a uniform and extensive set of rules that govern computer information transactions computer information transaction is broadly defined as an agreement to create, transfer, or license computer information or information rights There are several UCITA provisions that have relevance to e-contracts: First, if an offer is in an electronic form, the contract is formed when the electronic acceptance is received Second, counteroffers are not effective against electronic offerors Third, a consumer is not bound by a unilateral electronic error if: 1) there is prompt notification of the error; 2) the consumer has not used or benefited from the information; 3) the consumer delivers all copies of information, or destroys the information at the request of the other party; and 4) the consumer pays all costs for shipping, reshipping, and processing © Cavico & Mujtaba, 2008

Electronic Signature in Global and National Commerce Act The United States federal law that made electronic signatures equally as valid as written signatures is called the Electronic Signature in Global and National Commerce Act, which also is known as the “E-Sign” law The E-Sign law was not only an effort to legalize electronic signatures but also an attempt to standardize the various state laws Another goal of the statute was to place electronic contracts on the same equal footing as paper contracts The federal statute preempts state laws, except if a state has enacted the e-signature provisions of UETA, in which case the state is exempt from the federal statute © Cavico & Mujtaba, 2008

Conclusion To secure evidence of the e-contract, one simple and straightforward solution is to print out all pertinent email communications as well as all “electronic” prior negotiations. An e-contract need not have a personal signature to be valid and enforceable; rather, it is now acceptable for an electronic signature to be legally sufficient One engaging in Internet contracts globally is well advised to be aware of the laws of other countries, or the lack thereof, regarding on-line contracts specifically as well as Internet commerce generally © Cavico & Mujtaba, 2008

Internet Privacy – The Electronic Communications Privacy Act The Electronic Communications Privacy Act (ECPA) is a federal statute enacted by the U.S. Congress in 1986 that makes it a crime to intercept an electronic communication at the point of transmission, in transit, when stored by a server, or after receipt by the intended recipient The statute also makes it illegal to access stored email. In addition to criminal penalties, the statute allows an aggrieved party to sue the interceptor for civil damages. There are, however, two important exceptions whereby stored electronic email communication can be accessed without violating the law:1) access is permitted by a party or entity which in fact provided the electronic communication service, and 2) government and law enforcement entities and personnel can access stored communications when investigating suspected illegal activities © Cavico & Mujtaba, 2008

Internet Domain Names – The Anticybersquatting Consumer Protection Act In 1999, the United States Congress enacted the Anticybersquatting Consumer Protection Act in order to protect Internet domain names “Cybersquatting” is the term used to describe unfair uses of domain names by private organizations that maintain databases of domain names. This results when a person or business registers a domain name that is the same or very similar to another’s domain name or trademark or even a “famous” person’s name The federal statute now makes this practice illegal if the domain name is identical to or confusingly similar to the name of another and there is evidence of bad faith intent a private entity, under contract with the U.S. government, called the Internet Corporation for Assigned Names and Numbers (ICANN), now is primarily responsible for regulating the issuance of domain names on the Internet © Cavico & Mujtaba, 2008

Summary Internet regulation is a very pertinent issue in today’s global marketplace; and therefore this chapter has looked at the essential legal systems that govern computer transactions and the Internet. These statutes include the Uniform Electronic Transaction Act (UETA), Uniform Computer Information Transaction Act (UCITA) and the Electronic Signature in Global and National Commerce Act. Internet privacy and Internet Domain is also discussed with regards to the acts that they are regulated by, which are the Electronic Communications Privacy Act (ECPA) and the Anticybersquatting Consumer Protection Act. This chapter also examined the validity of e-contracts nationally as well as globally. © Cavico & Mujtaba, 2008

Reference Cavico, F. & Mujtaba, B. G., (2008). Business Law for the Entrepreneur and Manager. ILEAD Academy Publications; Davie, Florida, USA. ISBN: 978-0-9774-2115-2. Cavico, F. and Mujtaba, B. G. (2008). Legal Challenges for the Global Manager and Entrepreneur. Kendal Hunt Publishing; United States. © Cavico & Mujtaba, 2008