Doing Business in the Information Age John Corker GENL0230

What is e-commerce? Includes: Online business to business transactions Online business to business transactions Online business to consumer transactions Online business to consumer transactions Digital delivery of products and services Digital delivery of products and services Online merchandising Online merchandising Automated telephone transactions eg phone banking Automated telephone transactions eg phone banking EFTPOS and other automated transfer systems EFTPOS and other automated transfer systems

Contracts Law of contracts Law of contracts Issues for e-commerce Issues for e-commerce

Contracts - the basics Offer Offer Acceptance Acceptance Intention to enter legal relations Intention to enter legal relations Consideration Consideration Legal capacity Legal capacity Genuine consent Genuine consent

Offer Clear statement of terms Clear statement of terms Person who makes it is prepared to be bound Person who makes it is prepared to be bound Not just an invitation to treat Not just an invitation to treat

Acceptance Unqualified agreement to terms of offer Unqualified agreement to terms of offer Express or inferred by conduct Express or inferred by conduct Cant be forced on unwilling person Cant be forced on unwilling person

Time of creation of contract Contract formed at time and place the acceptance is communicated to offeror Contract formed at time and place the acceptance is communicated to offeror

Termination or revocation of offer Can be revoked prior to acceptance Can be revoked prior to acceptance Revocation must be communicated to offeror Revocation must be communicated to offeror

Certainty Essential parts of contract must be clear and complete Essential parts of contract must be clear and complete Courts may imply a meaning Courts may imply a meaning Uncertain term can be severed Uncertain term can be severed

Consideration Valuable consideration Valuable consideration Passing between parties to contract Passing between parties to contract Cant be unlawful or immoral Cant be unlawful or immoral

Intention Express Express Inferred from the circumstances Inferred from the circumstances Must be genuine consent - not obtained under duress Must be genuine consent - not obtained under duress

Capacity Age Age Intellectual capacity Intellectual capacity

Terms and conditions Express Express Implied Implied

Formalities Oral or written Oral or written Writing required under statute eg for sale of land Writing required under statute eg for sale of land

Practical concerns for e-commerce deals Identity and capacity of seller or buyer Identity and capacity of seller or buyer Authenticity of offer and acceptance (digital signatures) Authenticity of offer and acceptance (digital signatures) When and where contract formed When and where contract formed Governing law Governing law Terms and conditions (click through) Terms and conditions (click through)

Practical Concerns for e-commerce deals(2) Agreement on electronic payment system Agreement on electronic payment system Security of information exchanges Security of information exchanges Consequences on breach Consequences on breach Storing electronic data to prevent alteration Storing electronic data to prevent alteration

Electronic Transactions Act Federal law with mirror State laws (NSW, VIC, WA) Federal law with mirror State laws (NSW, VIC, WA) To remove obstacles to electronic transactions, communications, signatures and record keeping To remove obstacles to electronic transactions, communications, signatures and record keeping 1 July 2001 applies to all federal laws unless exempted 1 July 2001 applies to all federal laws unless exempted

Electronic Transactions Act(2) Validates electronic transactions Validates electronic transactions Given in writing met electronically now Given in writing met electronically now Govt can specify technology requirements Govt can specify technology requirements Business requirement valid only with consent Business requirement valid only with consent Signatures-parties free to agree on method Signatures-parties free to agree on method Production and retention of documents Production and retention of documents Method must ensure integrity and accessibility Method must ensure integrity and accessibility Time and place of dispatch and receipt of communications Time 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 sender Time of dispatch is when it enters the first information system outside control of sender Time of receipt is when it enters an information system designated by the addressee for receiving it. Time 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 Place of dispatch and receipt taken to be respective places of business

Electronic Transactions (4) Record keeping OK electronically if law says: Record keeping OK electronically if law says: Information to be recorded in writing Information to be recorded in writing A written document to be kept A written document to be kept An electronic communication to be kept An electronic communication to be kept Records must be kept identifying origin, destination, time of sending and receipt of electronic communication Records 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 terms do you want to include? What risks are you trying to avoid? What risks are you trying to avoid? How will disputes about contract be dealt with? How will disputes about contract be dealt with? What is the governing law? What is the governing law? Who will sign it? Who will sign it?

Setting up a business entity Sole trader Sole trader Partnership Partnership Company Company Trust Trust

Sole trader All profits All profits All losses All losses All liabilities All liabilities Own name or choose business name Own name or choose business name Register business name Register business name

Partnership Carrying on a business Carrying on a business In common In common With a view to profit With a view to profit Established by written agreement, oral agreement or conduct Established by written agreement, oral agreement or conduct

Partnership Partnership Act 1892 (NSW) Partnership Act 1892 (NSW) Corporations Law: Not more than 20 partners (except doctors, solicitors and accountants) Corporations Law: Not more than 20 partners (except doctors, solicitors and accountants)

Partnership Profit sharing Profit sharing Joint and several liability Joint and several liability Fiduciary duties to partners Fiduciary duties to partners

Companies Corporations Act Corporations Act Artificial legal entity Artificial legal entity Liability of members can be limited Liability of members can be limited

Companies Constitution Constitution Directors duties Directors duties Limits on raising money from the public Limits on raising money from the public

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

Companies Form a company by: Registering name Registering name Lodge application with ASIC Lodge application with ASIC Registered office Registered office Names of directors and members Names of directors and members

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

What is a domain name Human friendly form of an Internet address Human friendly form of an Internet address Actual address is an Internet Protocol (IP) number Actual address is an Internet Protocol (IP) number System globally administered by ICANN System globally administered by ICANN Generic top level domains (gTLDs) Generic top level domains (gTLDs).com,.org,.net,.edu,.gov,.biz.com,.org,.net,.edu,.gov,.biz Country code top level domains (ccTLDs) Country code top level domains (ccTLDs)

Domain name registration in Australia open and closed domains open and closed domains open -.com,.org,.net,.info,.biz open -.com,.org,.net,.info,.biz closed -.gov,.edu,.mil,.museum closed -.gov,.edu,.mil,.museum auDA administers.com.au space auDA administers.com.au space to register in.au space must be a commercial entity registered and trading in Australia.. to register in.au space must be a commercial entity registered and trading in Australia..

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

Domain Names and other business identifiers Trade Marks Trade Marks Personality Rights Personality Rights Place Names Place Names Tension with domain names Tension with domain names Reverse domain name hijacking Reverse domain name hijacking cybersquatting cybersquatting