READ THESE 9 TIPS FOR E-COMMERCE BUSINESS

Power Sellers Center

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

Contracts

•Law of contracts•Issues for e-commerce

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

Offer

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

Acceptance

• Unqualified agreement to terms of offer• Express or inferred by conduct• Can’t 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 acceptance• Revocation must be communicated to offeror

Certainty

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

Consideration

• Valuable consideration• Passing between parties to contract• Can’t be unlawful or immoral

Intention

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

Capacity

• Age• Intellectual capacity

Terms and conditions

• Express • Implied

Formalities

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

Practical concernsfor e-commerce deals

• Identity and capacity of seller or buyer• Authenticity of offer and acceptance (digital signatures)• When and where contract formed• Governing law• Terms and conditions (click through)

Practical Concerns for e-commerce deals(2)

• Agreement on electronic payment system• Security of information exchanges• Consequences on breach• Storing 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 keeping• 1 July 2001 applies to all federal laws unless exempted

Electronic Transactions Act(2)• Validates electronic transactions• Given in writing met electronically now

• Govt can specify technology requirements• Business requirement valid only with consent

• Signatures-parties free to agree on method• Production and retention of documents

• Method must ensure integrity and accessibility• 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 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 writing• A written document to be kept• An electronic communication to be kept

• 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 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 trader• Partnership• Company• Trust

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

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

conduct

Partnership• Partnership Act 1892 (NSW)

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

Partnership• Profit sharing

• Joint and several liability

• Fiduciary duties to partners

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

Companies• Constitution

• Directors duties

• Limits on raising money from the public

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

Domain name registration in Australia

• open and closed domains • open - .com, .org, .net, .info, .biz• closed - .gov, .edu, .mil, .museum• auDA administers .com.au space• 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• Domain 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 identifiers• Trade Marks• Personality Rights• Place Names• Tension with domain names

• Reverse domain name hijacking• cybersquatting