Doing Business in the Information Age

What is e-commerce?Includes:Online business to business transactionsOnline business to consumer transactionsDigital delivery of products and servicesOnline merchandisingAutomated telephone transactions eg phone bankingEFTPOS and other automated transfer systems

Contracts

Law of contractsIssues for e-commerce

Contracts - the basicsOfferAcceptanceIntention to enter legal relationsConsiderationLegal capacityGenuine consent

Offer

Clear statement of termsPerson who makes it is prepared to be boundNot just an invitation to treat

Acceptance

Unqualified agreement to terms of offerExpress or inferred by conductCant be forced on unwilling person

Time of creation of contract

Contract formed at time and place the acceptance is communicated to offeror

Termination orrevocation of offer

Can be revoked prior to acceptanceRevocation must be communicated to offeror

Certainty

Essential parts of contract must be clear and completeCourts may imply a meaningUncertain term can be severed

Consideration

Valuable considerationPassing between parties to contractCant be unlawful or immoral

Intention

ExpressInferred from the circumstancesMust be genuine consent - not obtained under duress

Capacity

AgeIntellectual capacity

Terms and conditions

Express Implied

Formalities

Oral or writtenWriting required under statute eg for sale of land

Practical concernsfor e-commerce deals

Identity and capacity of seller or buyerAuthenticity of offer and acceptance (digital signatures) When and where contract formedGoverning lawTerms and conditions (click through)

Practical Concerns for e-commerce deals(2)Agreement on electronic payment systemSecurity of information exchangesConsequences on breachStoring electronic data to prevent alteration

Practical Concerns for e-commerce deals(2)Agreement on electronic payment systemSecurity of information exchangesConsequences on breachStoring electronic data to prevent alteration

Electronic Transactions Act

Federal law with mirror State laws (NSW, VIC, WA)To remove obstacles to electronic transactions, communications, signatures and record keeping1 July 2001 applies to all federal laws unless exempted

Electronic Transactions Act(2)

Validates electronic transactionsGiven in writing met electronically nowGovt can specify technology requirementsBusiness requirement valid only with consent Signatures-parties free to agree on methodProduction and retention of documentsMethod must ensure integrity and accessibilityTime and place of dispatch and receipt of communications

Electronic Transactions(3)Time of dispatch is when it enters the first information system outside control of senderTime of receipt is when it enters an information system designated by the addressee for receiving it.Place of dispatch and receipt taken to be respective places of business

Electronic Transactions (4)Record keeping OK electronically if law says:Information to be recorded in writingA written document to be keptAn electronic communication to be keptRecords must be kept identifying origin, destination, time of sending and receipt of electronic communication

Making a contract

What terms do you want to include?What risks are you trying to avoid?How will disputes about contract be dealt with?What is the governing law?Who will sign it?

Setting up a Business Entity

Sole traderPartnershipCompanyTrust

Sole traderAll profitsAll lossesAll liabilitiesOwn name or choose business nameRegister business name

PartnershipCarrying on a businessIn commonWith a view to profitEstablished by written agreement, oral agreement or conduct

PartnershipPartnership Act 1892 (NSW)

Corporations Law: Not more than 20 partners (except doctors, solicitors and accountants)

PartnershipProfit sharing

Joint and several liability

Fiduciary duties to partners

CompaniesCorporations ActArtificial legal entityLiability of members can be limited

CompaniesConstitution

Directors duties

Limits on raising money from the public

CompaniesThe corporate veil

Lifting the veil: fraud, agency, paying more dividends than profit, incurring debts when company insolvent

CompaniesForm a company by:Registering nameLodge application with ASICRegistered officeNames of directors and members

Which structure?Where are you getting your money from?What is your risk/liability?Who will be in control?What are the ongoing costs?

What is a domain nameHuman friendly form of an Internet addressActual address is an Internet Protocol (IP) numberSystem globally administered by ICANNGeneric top level domains (gTLDs).com, .org, .net, .edu, .gov, .bizCountry code top level domains (ccTLDs)

Domain name registration in Australiaopen and closed domains open - .com, .org, .net, .info, .bizclosed - .gov, .edu, .mil, .museumauDA administers .com.au spaceto register in .au space must be a commercial entity registered and trading in Australia..

Domain Names (cont)Licensed on a first come-first served basisDomain Names never meant to confer property rights.Clash with Trade Marks.auDA has a dispute resolution scheme which applies to all domain names registered or renewed from 1 August 2002.ICANN has the UDRP for .com etc domains.

Domain Names and other business identifiersTrade MarksPersonality RightsPlace NamesTension with domain namesReverse domain name hijackingcybersquatting