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

Prepared by Douglas Peterson, Prepared by Douglas Peterson, University of AlbertaUniversity of Alberta 15-15-11

Part 3 – The Law of ContractPart 3 – The Law of Contract

Chapter 15Chapter 15

Electronic Business Law Electronic Business Law and Data Protectionand Data Protection

© 2006 McGraw-Hill Ryerson © 2006 McGraw-Hill Ryerson LimitedLimited 15-15-22

OverviewOverview

New Body of LawNew Body of Law Electronic BusinessElectronic Business E-Biz LawE-Biz Law Statutory DevelopmentsStatutory Developments Electronic Commerce LegislationElectronic Commerce Legislation


IntroductionIntroduction

Electronic Business (E-Business)Electronic Business (E-Business) The sum of commercial transactions for goods or The sum of commercial transactions for goods or

services, taken together with commercial advertising, services, taken together with commercial advertising, marketing, and communication, executed through on-marketing, and communication, executed through on-line electronic computer and communications line electronic computer and communications technologytechnology

Must adopt new technologies to the lawMust adopt new technologies to the law Technology always moves faster than the lawTechnology always moves faster than the law


Points in IssuePoints in Issue

LawLaw For E-Biz transactions are the same as for ordinary For E-Biz transactions are the same as for ordinary

commercial transactionscommercial transactions Rights and responsibilities are not diminished nor Rights and responsibilities are not diminished nor

expanded in E-Bizexpanded in E-Biz Criminal law also remains the sameCriminal law also remains the same Common law requirements of contract apply to online Common law requirements of contract apply to online

transactionstransactions


Statutory DevelopmentsStatutory Developments

Privacy Legislation (PIPEDA)Privacy Legislation (PIPEDA) Personal Information Protection and Electronic Personal Information Protection and Electronic

Documents ActDocuments Act Applies across Canada as a federal act if no provincial Applies across Canada as a federal act if no provincial

legislationlegislation PIPEDA has compliance requirements for businessPIPEDA has compliance requirements for business



PIPEDAPIPEDA Mandates electronic alternatives to paper documents for Mandates electronic alternatives to paper documents for

all manner of government operationsall manner of government operations Filings, payments, secure signatures, submission of Filings, payments, secure signatures, submission of

evidenceevidence Private groups must obtain consent of individuals to Private groups must obtain consent of individuals to

collect, use or disclose personal information for collect, use or disclose personal information for commercial or health carecommercial or health care



UNCITRAL (United Nations Commission on UNCITRAL (United Nations Commission on International Trade Law)International Trade Law) International model law for Electronic CommerceInternational model law for Electronic Commerce Uniform Law Conference of Canada (ULCC)Uniform Law Conference of Canada (ULCC) ULCC not a law itself by Canadian mode of UNCITRALULCC not a law itself by Canadian mode of UNCITRAL


E-Commerce LegislationE-Commerce Legislation

PIPEDA PIPEDA Federal and provincial equivalent give validity to E-Biz Federal and provincial equivalent give validity to E-Biz

contractscontracts DetermineDetermine

ValidityValidity What contracts are coveredWhat contracts are covered Location of the transactionLocation of the transaction

ImposesImposes Requirements for data securityRequirements for data security



Documents not affected by legislationDocuments not affected by legislation Wills and codicilsWills and codicils Trusts created by wills and codicilsTrusts created by wills and codicils Powers of attorneyPowers of attorney Transfers of an interest in landTransfers of an interest in land Negotiable instrumentsNegotiable instruments Documents prescribed or belonging to a prescribed Documents prescribed or belonging to a prescribed

classclass



““Functional Equivalency Rules”Functional Equivalency Rules” Treats electronic documents the same as other Treats electronic documents the same as other

documentsdocuments Document not invalid or unenforceable simply because Document not invalid or unenforceable simply because

it is only in electronic formit is only in electronic form In writing if it is accessible to both partiesIn writing if it is accessible to both parties


Location of the TransactionLocation of the Transaction

Governing Law of the ContractGoverning Law of the Contract Determined by rules of offer or acceptanceDetermined by rules of offer or acceptance Determines whose law applies and who can tax the Determines whose law applies and who can tax the

transactiontransaction Determined by the parties themselvesDetermined by the parties themselves



Deemed rulesDeemed rules Dispatched: at the place where the originator’s business Dispatched: at the place where the originator’s business

lieslies Received: at the place where the addressee has place of Received: at the place where the addressee has place of

businessbusiness Rules only apply for offer and acceptanceRules only apply for offer and acceptance



IssueIssue Internet: no permanent establishment of business Internet: no permanent establishment of business

requiredrequired Server could be on an offshore islandServer could be on an offshore island

Active vs. Passive WebsitesActive vs. Passive Websites Emerging distinction in lawEmerging distinction in law Not enough to declare jurisdiction if site merely Not enough to declare jurisdiction if site merely

accessed from a foreign jurisdictionaccessed from a foreign jurisdiction


The ClickThe Click

E-BizE-Biz Requirements the sameRequirements the same

Offer and acceptance needed for a valid contractOffer and acceptance needed for a valid contract Common law rules preserved Common law rules preserved

Click WrapClick Wrap An internet click box of “I agree” which constitutes valid An internet click box of “I agree” which constitutes valid

acceptance of enumerated contractual responsibilitiesacceptance of enumerated contractual responsibilities Scrolling the same as turning the pages of a contractScrolling the same as turning the pages of a contract


AcceptanceAcceptance

Communication RulesCommunication Rules Electronic information/documents deemed to be sent Electronic information/documents deemed to be sent

when it enters an information system outside sender’s when it enters an information system outside sender’s controlcontrol

Presumed received:Presumed received: One uses such a system, it enters the system and is One uses such a system, it enters the system and is

capable of retrievalcapable of retrieval Is aware it is in the system and is capable of retrieving itIs aware it is in the system and is capable of retrieving it


Other IssuesOther Issues

ConsiderationConsideration Is a mouse click sufficient consideration to bind a Is a mouse click sufficient consideration to bind a

contractcontract Remains to be seenRemains to be seen

Copyright InfringementCopyright Infringement Same rules applySame rules apply Problem is anonymityProblem is anonymity ISP are not held liableISP are not held liable

Possibly liable if given notice of infringing content and fail Possibly liable if given notice of infringing content and fail to remove itto remove it


Management AspectsManagement Aspects

Internal mattersInternal matters Harassment of employees through emailsHarassment of employees through emails Defamation of employer through blogsDefamation of employer through blogs Illegal hackingIllegal hacking

Company should have clear policies Company should have clear policies Breach of which may be grounds for dismissalBreach of which may be grounds for dismissal


SummarySummary

E-BizE-Biz New laws implemented to deal with E-Biz and E-New laws implemented to deal with E-Biz and E-

CommerceCommerce Common law rules continue to apply to transactionsCommon law rules continue to apply to transactions StatutesStatutes

PIPEDAPIPEDA UNCITRALUNCITRAL


Domain NamesDomain Names

Similar value as a trademarkSimilar value as a trademark Cyber squattingCyber squatting

A domain name registered solely for the purpose of A domain name registered solely for the purpose of extorting its later sale to a trademark holder that extorting its later sale to a trademark holder that actively identifies itself with a similar or identical markactively identifies itself with a similar or identical mark

Trademark concept of confusion appliesTrademark concept of confusion applies Can be a breach of intellectual property lawCan be a breach of intellectual property law