Doing Business in the Information Age

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Doing Business in the Information Age

• John Corker
• GENL0230

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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

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Contracts

• Law of contracts
• Issues for e-commerce

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Contracts - the basics

• Offer
• Acceptance
• Intention to enter legal relations
• Consideration
• Legal capacity
• Genuine consent

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Offer

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

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Acceptance

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

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Time of creation of contract

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

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Termination orrevocation of offer

• Can be revoked prior to acceptance
• Revocation must be communicated to offeror

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Certainty

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

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Consideration

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

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Intention

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

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Capacity

• Age
• Intellectual capacity

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Terms and conditions

• Express
• Implied

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Formalities

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

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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)

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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

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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

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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

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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

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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

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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?

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Setting up a business entity

• Sole trader
• Partnership
• Company
• Trust

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Sole trader

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

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Partnership

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

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Partnership

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

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Partnership

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

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Companies

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

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Companies

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

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Companies

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

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Companies

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

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Which structure?

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

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What is a domain name

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

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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..

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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.

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Domain Names and other business identifiers

• Trade Marks
• Personality Rights
• Place Names
• Tension with domain names
• Reverse domain name hijacking
• cybersquatting