Prepared by Douglas Peterson, University of Alberta 15-1 Part 3 – The Law of Contract Chapter 15 Electronic Business Law and Data Protection

© 2006 McGraw-Hill Ryerson Limited 15-2 Overview  New Body of Law  Electronic Business  E-Biz Law  Statutory Developments  Electronic Commerce Legislation

© 2006 McGraw-Hill Ryerson Limited 15-3 Introduction  Electronic Business (E-Business)  The sum of commercial transactions for goods or services, taken together with commercial advertising, marketing, and communication, executed through on- line electronic computer and communications technology  Must adopt new technologies to the law  Technology always moves faster than the law

© 2006 McGraw-Hill Ryerson Limited 15-4 Points in Issue  Law  For E-Biz transactions are the same as for ordinary commercial transactions  Rights and responsibilities are not diminished nor expanded in E-Biz  Criminal law also remains the same  Common law requirements of contract apply to online transactions

© 2006 McGraw-Hill Ryerson Limited 15-5 Statutory Developments  Privacy Legislation (PIPEDA)  Personal Information Protection and Electronic Documents Act  Applies across Canada as a federal act if no provincial legislation  PIPEDA has compliance requirements for business

© 2006 McGraw-Hill Ryerson Limited 15-6 Statutory Developments  PIPEDA  Mandates electronic alternatives to paper documents for all manner of government operations  Filings, payments, secure signatures, submission of evidence  Private groups must obtain consent of individuals to collect, use or disclose personal information for commercial or health care

© 2006 McGraw-Hill Ryerson Limited 15-7 Statutory Developments  UNCITRAL (United Nations Commission on International Trade Law)  International model law for Electronic Commerce  Uniform Law Conference of Canada (ULCC)  ULCC not a law itself by Canadian mode of UNCITRAL

© 2006 McGraw-Hill Ryerson Limited 15-8 E-Commerce Legislation  PIPEDA  Federal and provincial equivalent give validity to E-Biz contracts  Determine  Validity  What contracts are covered  Location of the transaction  Imposes  Requirements for data security

© 2006 McGraw-Hill Ryerson Limited 15-9 E-Commerce Legislation  Documents not affected by legislation  Wills and codicils  Trusts created by wills and codicils  Powers of attorney  Transfers of an interest in land  Negotiable instruments  Documents prescribed or belonging to a prescribed class

© 2006 McGraw-Hill Ryerson Limited E-Commerce Legislation  “Functional Equivalency Rules”  Treats electronic documents the same as other documents  Document not invalid or unenforceable simply because it is only in electronic form  In writing if it is accessible to both parties

© 2006 McGraw-Hill Ryerson Limited Location of the Transaction  Governing Law of the Contract  Determined by rules of offer or acceptance  Determines whose law applies and who can tax the transaction  Determined by the parties themselves

© 2006 McGraw-Hill Ryerson Limited Location of the Transaction  Deemed rules  Dispatched: at the place where the originator’s business lies  Received: at the place where the addressee has place of business  Rules only apply for offer and acceptance

© 2006 McGraw-Hill Ryerson Limited Location of the Transaction  Issue  Internet: no permanent establishment of business required  Server could be on an offshore island  Active vs. Passive Websites  Emerging distinction in law  Not enough to declare jurisdiction if site merely accessed from a foreign jurisdiction

© 2006 McGraw-Hill Ryerson Limited The Click  E-Biz  Requirements the same  Offer and acceptance needed for a valid contract  Common law rules preserved  Click Wrap  An internet click box of “I agree” which constitutes valid acceptance of enumerated contractual responsibilities  Scrolling the same as turning the pages of a contract

© 2006 McGraw-Hill Ryerson Limited Acceptance  Communication Rules  Electronic information/documents deemed to be sent when it enters an information system outside sender’s control  Presumed received:  One uses such a system, it enters the system and is capable of retrieval  Is aware it is in the system and is capable of retrieving it

© 2006 McGraw-Hill Ryerson Limited Other Issues  Consideration  Is a mouse click sufficient consideration to bind a contract  Remains to be seen  Copyright Infringement  Same rules apply  Problem is anonymity  ISP are not held liable  Possibly liable if given notice of infringing content and fail to remove it

© 2006 McGraw-Hill Ryerson Limited Management Aspects  Internal matters  Harassment of employees through s  Defamation of employer through blogs  Illegal hacking  Company should have clear policies  Breach of which may be grounds for dismissal

© 2006 McGraw-Hill Ryerson Limited Summary  E-Biz  New laws implemented to deal with E-Biz and E- Commerce  Common law rules continue to apply to transactions  Statutes  PIPEDA  UNCITRAL

© 2006 McGraw-Hill Ryerson Limited Domain Names  Similar value as a trademark  Cyber squatting  A domain name registered solely for the purpose of extorting its later sale to a trademark holder that actively identifies itself with a similar or identical mark  Trademark concept of confusion applies  Can be a breach of intellectual property law