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Electronic Commerce

Electronic Commerce. What is it?. What is a contract?. A legally binding agreement between two or more people or organisations Terms of a contract may be expressed in writing or orally, implied by conduct, industry custom, and law or by a combination of these things.

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Electronic Commerce

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  1. Electronic Commerce What is it?

  2. What is a contract? • A legally binding agreement between two or more people or organisations • Terms of a contract may be expressed in writing or orally, implied by conduct, industry custom, and law or by a combination of these things

  3. Elements of an Enforceable Contract • Offer • Acceptance • Consideration • Intention to create legal relations • Legal Capacity

  4. Standard Elements • Most contracts contain: • Identification of the parties • Description of subject matter • Price, delivery, payment • Warranties, liabilities, dispute resolution • How orders are placed • Record keeping, audit trails • Security, format, authentication of messages • When and where messages sent/received • Responsibility for lost/garbled messages • Law governing the transaction

  5. Formation of Contract • By Email • By Click Wrap

  6. Invitation to Treat • Pre-Internet doctrine • See, eg, Fisher v. Bell [1961] 1 QB 394 per Lord Parker:“the display of an article with a price on it in a shop window is merely an invitation to treat”

  7. Mistake • Also pre-Internet • Common, mutual and unilateral varieties. • If a seller makes a mistake (unilateral mistake) a court may set aside the contract. • Key question - did the buyer know/ought to have known of the mistake?

  8. Applications to E-commerce • Kodak • Argus • Amazon.co.uk • All three companies advertised products at a mistaken price. Kodak eventualy honoured ‘contracts’ whereas the others didn’t

  9. Case-Study: Kodak • Early 2002, Kodak.co.uk advertised a digital camera for £100 (normally £329) • Denied contracts had been formed: • Standard terms on site • Defence of mistake • Was only invitation to treat • Buckled under pressure and honoured contracts

  10. Case-Study: Argos • Late 99, Argos.co.uk offered a Sony TV Set for £3. By the time mistake discovered, £1 million of orders had been made, one person ordering 1700 sets alone. • Did not honour contracts.

  11. Case Study: Amazon • Early 2003, Amazon.co.uk offered a HP iPaq H1910 for £7.32 (not £287) • At midday, pulled entire store • Amazon referred people who had ordered to Conditions of Use governing contract formation

  12. Storage of electronic records • ETA allows electronic records to be kept • Records must be kept under: • Proceeds of Crime Act 1987 (Cth) • Income Tax Assessment Act 1936 (Cth) • EFT Code of Conduct

  13. E-Commerce Best Practice • Fed Govt best practice guidelines: • http://www.ecommerce.treasury.gov.au • Not force of law, but merely guidelines. Includes

  14. Consumer Protection

  15. Trust and Confidence • How do sites enhance the trust of their customers? • Money back guarantees (eg Amex, Powells) • Seal/Tick programmes (ie IIA’s Family Friendly ISP seal) • Provide information (eg Amex, NineMSN)

  16. Policy Framework • Australia has a policy framework for consumer e-commerce issues. • ContractETAs mirroring UNCITRAL provisions • PaymentEFT Code of Conduct • ConductIIA Codes of Practice

  17. Consumer Credit Code • Uniform Consumer Credit Code applies to consumer credit transactions, mirror legislation is in every state. • http://www.creditcode.gov.au

  18. Trade Practices Act • TPA 1974 (Cth), applies generally to coporations not individuals • Will: • Imply terms and conditions into transactions • Prohibit unconscionable conduct and contracts • Prohibit misleading or deceptive conduct

  19. Australian Codes of Conduct • EFT Code of Conduct • Smart Card Code of Conduct • Telecommunications Codes • Internet Industry Association Code • ADMA Code of Practice • Federal Govt’s Model Code

  20. EFT Code of Conduct • Electronic Funds Transfer Code of Conduct • Voluntary, but popular and widely adopted • Covers ‘electronic transfers of value’ • See ASIC website

  21. Smart Card Code • Asia Pacific Smart Card Forum Code of Conduct • Published 1997 • Has compliance logo

  22. Telecommunications Codes • Australian Communications Industry Forum developing codes under the Telecommunications Act 1975 (Cth)

  23. IIA Code of Conduct • Internet Industry Association has a number of codes • Relevant to consumer protection is the Content Regulation Code

  24. ADMA Code • Australian Direct Marketing Association Industry Code of Practice (2000) • Contains short section on electronic commerce

  25. Cth Model Code • Repeats the text of OECD Guidelines on Ecommerce • A “Virtual Code”

  26. International Regimes • EU Directive “on the protection of individuals with regard to the processing of personal data and on the free movement of that data” • OECD Guidelines on Consumer Protection in Electronic Commerce

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