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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.

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Presentation on theme: "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."— Presentation transcript:

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 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: 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. Contract ETAs mirroring UNCITRAL provisions Payment EFT Code of Conduct Conduct IIA Codes of Practice

17 Consumer Credit Code Uniform Consumer Credit Code applies to consumer credit transactions, mirror legislation is in every state.

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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