1. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE The Law of Torts Negligence Vicarious Liability

2. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Vicarious Liability  Definition The law holds a person liable for the wrongs of another even though the person has personally done no wrong  Examples  Employer\Employee

3. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Vicarious Liability (cont.)  Rationale  Economic The employer is usually insured  Safety Provides an incentive for employers to choose staff carefully and provide training  Policy Employers profit from their enterprise and therefore should be responsible for any loss it causes

4. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Vicarious Liability (cont.)  Indemnities  A contract can contain a clause requiring the employee to indemnify the employer  Some jurisdictions have abolished this right (e.g. s27C Wrongs Act (SA))  Employee is usually covered by employer’s insurance and insurer cannot recover against him (s66 Insurance Contracts Act)

5. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Vicarious Liability (cont.)  Requirements  Commission of a tort  Not contract or other legal liabilities  By an employee  A Principal is not liable for acts of an Independent Contractor  Acting in the course of his employment  What was the employee employed to do. Employer will be liable for acts in that area or incidental to it or if the employer otherwise authorised the wrongful act.

6. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Vicarious Liability (cont.) Who is an Independent Contractor?  Control test  Does the employer have the right to exercise control over what the employee does and how he does it?  Employer need only have power to control the employee’s work to the extent to which there is scope for such control

7. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Vicarious Liability (cont.)  Control test (cont.)  Factors  Can the employer tell the employee what to do, how to do it, when to do it etc.?  Does the employer have the power of dismissal  Does the employer provide equipment  Does the employer pay holiday pay, sick leave, workers compensation?

8. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Vicarious Liability (cont.)  Control test (cont.)  Integration test How closely has the employee been integrated into the employer’s business

9. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Vicarious Liability (cont.)  Control test (cont.)  Multi-factor test A worker is likely to be an independent contractor and not an employee if he:  Owns and maintains his own equipment  Is paid by results  Takes the chance of profit\loss  Has the right to delegate work  Has the right to work for others  Is not entitle to sick pay, workers compensation, sick leave or superannuation  Does not have PAYE tax installments deducted

10. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Vicarious Liability (cont.)  Acting in the course of his employment  Wide meaning  Employer is liable even when the employee does something that is not part of his job  Century Insurance Co Ltd v Northern Ireland Road Transport Board [1942] AC 509 (P p417)  Employer is liable even when the employee commits an intentional or illegal act  Poland v John Parr & Sons [1927] 1 KB 236 (P p418)  Lloyd v Grace, Smith & Co [1912] AC 716 (P p417)

11. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Corporate Internet Policy

12. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Need  Alignment with business strategy  Protection of a valuable asset  Networks produce a ripple effect

13. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Definition  Hardware  Software  Data  Network

14. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Ownership  Overall control  Control of sub-systems  New Systems implementation

15. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Software  Licensing  Supported environments  Auditing  Software development  methodologies  standards

16. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Data  Ownership  Control  Validation  Authoritative sources  Copying and transfer  Archiving

17. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Web Pages  Consistency of layout  Consistency of design  Accessibility (W3C)  Use of graphics  Navigation  Links

18. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Web Pages (cont.)  Proprietary information  Disclaimers  Terms and conditions  Privacy statement  Copyright notice

19. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Security  Storage  Firewalls  Access  Permissions  Encryption

20. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Security (cont.)  Anti-viral measures  software  installation  updating  filtering  attachments

21. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Security (cont.)  Intrusion monitoring and response  Logging  Backups  Auditing  Remote Access

22. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Employee Usage  Personal and\or business  Subverting systems  Permitted software  Reporting of breaches  Password protection  Monitoring  Privacy

23. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Employee Usage (cont.)  Vilification and Harassment  Inclusive language  Race  Religion  Ethnicity  Gender  Sexuality  Marital status  Pregnancy  Age  Disabilities

24. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Employee Usage (cont.)  Emails  When to use  How to use  Flaming  Archiving  Format of attachments  Privacy & Monitoring  Mail lists

25. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Employee Usage (cont.)  Compliance with Federal & State law  Penalties

26. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Dissemination  Publication  New employee inductions  Training  Signed acknowledgement

27. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Consumer Protection Forder & Quirk Chapter 10

28. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Trade Practices Act  Prohibits  Misleading & Deceptive Conduct  Unconscionable Conduct  Implies Terms  Creates  Civil Remedies  Criminal Penalties  Applies to  Trading & Financial Corporations  Use of Telegraphic Service (i.e. Internet)

29. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Identifying Businesses  Necessary to  Create Trust  Provide details of whom to claim against  Business Names Acts  If you trade under a name other than your own you must register it.  Must register in each state in which business trades

30. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Identifying Businesses (cont.)  Corporations Law  Covers the whole of Australia  Provides an on-line database  Must state ACN on  Invoices  Receipts  Agreements  Other essential documents

31. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Identifying Businesses (cont.)  Trade Marks  Registering business name or company name gives no intellectual property rights  Trade marks are nation based  Infringement of intellectual property rights can be misleading & deceptive conduct contrary to TPA

32. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Identifying Businesses (cont.)  Spoofing  Impersonation of reputable business  Uses  Web site with similar name; or  Email with embedded link  Relies on “human engineering”  Difficult to authenticate site

33. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Information on Goods & Services  Misleading Advertising  Even if goods & services are free  Expired information  Mere puffery  Bait Advertising  Must be able to supply goods at stated price for a reasonable period

34. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Information on Goods & Services  Pyramid Schemes  Pump and Dump Schemes  Health Products

35. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Transactions  Form requirements  Language  Currency  Use of $ symbol may be misleading  Taxes  Licensing

36. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Transactions (cont.)  Implied Terms  Goods  Merchantable quality  Reasonable fit for purpose  Services  Supplied with due care and skill  Reasonably fir for purpose  Terms implied by TPA may not be excluded  May be limited for goods not ordinarily acquired for personal, domestic or household use

37. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Transnational Contracts  Governing Law  Jurisdiction clauses  May be ignored as an attempt to oust jurisdiction of local courts  Alternative Dispute Resolution (ADR) clauses  Conflict with local laws  TPA will apply if any part of transaction or pre- contractual negotiations occurs in Australia

38. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Transnational Contracts (cont.)  Uniform Computer Information Transactions Act  Actively promoted by Business Software Alliance  Enacted in some US States  Actively promoted by Business Software Alliance  Enacted in some US States  Aust Courts may refuse to uphold it for Australian sales because of conflict with TPA  Severe attack on Open Source Software

39. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE UCITA  Consumer  must travel to developers jurisdiction to commence litigation  surrender rights to content made with software  must delete software if don’t agree to licence changes that developers can impose at any time

40. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE UCITA (cont.)  Developers can  monitor consumers computer  use Internet to switch off software on user’s computer  prevent users from publicising flaws in software  avoid liability for bugs  Prohibits reverse engineering (conflicts with Aust Copyright Act

41. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Hague Convention  Covers private international commercial litigation  Specifies which countries laws applies  Specifies which countries courts have jurisdiction  Provides for registration of foreign judgments  US opposes it  Prefers privately-run ADR

42. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE European Union  Distance Sales Directive  Allows consumers to withdraw from consumer contracts within 7 days  Would apply to any sale to a EU consumer  Only 10 of 17 European nations have enacted it.

43. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE European Union (cont.)  Distance Sales Directive (cont.)  Suppliers must  Identify themselves and provide an address  Inform consumer of right of withdrawal  Provide information regarding characteristics; price; delivery; payment method; after-sales services and warranties; duration of contract; period of offer; right of termination (if > 1 year)  Fulfil order within 30 days

44. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Trans-national Consumer Protection  Industry Codes of Practice  Netiquette  Best Practice

45. MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Self Help  Identification  Description  Cost & Currency  Applicable Law  Privacy  Payment Mechanism  Delivery  Refunds & Warranties  Complaints & Dispute Resolution  Print out Details