●How the legal environment affects electronic commerce activities.

●What elements combine to form an online business contract.

●How to copyright , patent, trademark laws govern the use of intellectual property online.

●That the internet has opened doors for online crime, terrorism, and warfare

●How ethics issues arise for companies conducting electronic commerce

●Ways to resolve conflict between companies desire to collect and use their customers data and the privacy rights of those customers

●What taxes are levied on electronic commerce activities.

INTRODUCTION●Case Study About Dell Computer and Micron Electronics.●WHAT: Two companies that sold personal computer through web sites and agreed to settle U.S Federal Trade Commission charges.

●Problem: Charges are misleading customers by their advertisements.

●Violation: Consumer Leasing Act of 1976-was designed to required banks and other leading establishments to fully disclose the terms of leases so that the customers would have enough information to make informed in financing choices when leasing cars, furniture and other goods.

●

THE LEGAL ENVIRONMENT OF ELECTRONIC THE LEGAL ENVIRONMENT OF ELECTRONIC COMMERCECOMMERCE

Businesses that operate on the Web must comply with the same Businesses that operate on the Web must comply with the same laws and regulations that govern the operations of all the laws and regulations that govern the operations of all the businesses.businesses. If they do not, they face the same penalties including fines, If they do not, they face the same penalties including fines, reparation payments, court-impose dissolution, and even jail reparation payments, court-impose dissolution, and even jail time for officers and owners-that any business face.time for officers and owners-that any business face.

TWO FACTORS, THE WEB FACE

FIRST

The Web extends a company’s reach beyond traditional boundaries.

SECOND

The Web increase the speed and efficiency of the business communication.

BORDERS AND JURISDICTION

Territorial borders in the physical world serve a useful purpose in traditional commerce:

They mark the ranger of culture and reach applicable laws very clearly. When people travel across international borders, they are made aware of the transition in many ways.

CULTURE HELPS DETERMINE LAWS AND ETHICAL STANDARDS

CULTURE

LAWSETHICAL

STANDARDS

POWER

Power is a form of control over physical space and the people and the objects that reside in the

space, and is a defining characteristic of statehood.

EFFECTS

Laws in the physical world are grounded in the relationship between physical proximity

and the effects, or impact, of a person’s behavior.

LEGITIMACY

Most people agree that the legitimate right to create and enforce laws derives from the mandate

of those who are subject to those laws.

NOTICE

Physical boundaries are a convenient and effective way to announce the ending of one legal or cultural systems and the beginning of another.

Notice is the expression of such change In the rules.

Physical geographic boundaries

Legal boundaries

Control over space, people, and objects

POWER

EFFECTS

LEGITIMACY

NOTICE

Stronger on people and things that are closerStronger on people and things that are closer

Mandate of those people subject to the laws

People must know the law and obey it

JURIDICTION ON THE INTERNET

The task on defining, establishing, and asserting jurisdiction are much more difficult on the internet than they are in the physical world, mainly because traditional geographic boundaries do not

exist. Contract is a promise or a set of promises between two or more legal entities-people or corporations-that provides for an exchange of value between them. Breach of contract- either party to a contract does not comply with the terms of the contract, the other party can sue for failure to comply. Tort is an international or negligent action taken by a legal entity that causes harm to another legal entity.

SUBJECT-MATTER JURISDICTION

Subject-matter jurisdiction is a court’s authority to decide a particular type of dispute.

PERSONAL JURISDICTION

Personal jurisdiction is, in general, determined by the residence of the parties. However, an out-of-state

person or corporation can also voluntarily submit to the jurisdiction of a particular state court by agreeing to do

so in writing or by taking action in the state.

Forum selection clause is one of the most common ways that people voluntarily submit to a jurisdiction is by signing a contract that includes a statement that the

contract will be enforced according to the laws of a particular state.

A TYPICAL FORUM SELECTION CLAUSE

These terms of use shall be govern by and construed in accordance with the laws of the State of Washington, without regard to its conflict of laws rules. Any legal actions arising out of this Agreement shall be litigated and enforce under the laws of the State of Washington. In addition, agree to submit to the jurisdiction of the courts of the State of Washington, and that any legal action pursued by you shall be within the exclusive jurisdiction of the court of King in the State of Washington

JURISDICTION IN INTERNATIONAL COMMERCE

Jurisdiction issues that arise in international business are even more complex than the rule governing personal

jurisdiction across state lines within the United States.

The exercise of jurisdiction across international border is govern by treaties between the countries engaged in

dispute.

Judicial comity is a principle that courts asked to enforce the laws of the other nations sometimes follow which

means that they voluntarily enforce other countries’ laws or judgments out of a sense of comity, or friendly civility

CONFLICT OF LAWS.

In the United States, business is govern by federal laws, state laws, and local laws. These laws addresses

the same issues in different ways. Lawyers call this situation a conflict of laws.

THREE ELEMENT OF CONTRACT

• An Offer is a commitment with certain terms made to another party, such as a declaration of willingness to buy or sell a product or service.

• An Acceptance is the expression of willingness to take an offer, including all its stated terms.

• Consideration is the agreed-upon exchange of something valuable, such as money, property or future service.

• An implied contract can also be formed by two or more parties that act as if a contract exists, even if there is no contract has been written and signed.

•

●STEP ●CONTRACT ELEMENT

●PARTICIPANT

●ACTION

●1. ●Invites offers ●Seller ●Promotes product through Web page and states condition under which offers will be accepted (for example, price and shipping terms)

●2. ●Offer ●Buyer ●Click button to make offer to purchase product

●3. ●Acceptance ●Seller ●Acceptance buyer’s offer, processes payment, and ships product

CLICK-WRAP AND WEB-WRAP CONTRACT ACCEPTANCE

END-USER LICENSE AGREEMENT

- often appear in a dialog box as a part of the software installation process. When the user click the “AGREE” button, the contract is deemed to be signed.

SHRINK WRAP ACCEPTANCE

- where the package are wrap by plastics including the statement indicating that the buyer accepted the condition of EULA’s by removing the plastic wrap on the package.

CREATING WRITTEN CONTRACT ON THE WEB

In general, contracts are valid even if they are not written or signed. However, certain categories of contract are enforce unless the terms are put into writing and signed by both parties.

Following this British precedent, every state in the United States today has similar law, called Statute of Frauds.

Writing exist when the terms of the contract has been reduced to some tangible form.

Signature is any symbol executed or adopted for the purpose of authenticating a writing.

IMPLIED WARRANTIES AND WARRANTY DISCLAIMERS ON WEB.

Implied Warranty is a promise to which the seller can be held even if the seller did not make an explicit statement on that promise.

Warranty Disclaimer is the statement declaring that the seller will not honor some or all warranties implied.

A WEB SITE WARRANTY DISCLAIMER

Disclaimers

WE DO NOT PROMISE THAT THIS WEB SITE OR ANY CONTENT, ELEMENT OR FEATURE OF THIS SITE WILL BE ERROR-FREE OR INTERRUPTED, OR THAT ANY DEFECTS WILL BE CORRECTED, OR THAT YOUR USE OF THE SITE WILL PROVIDED SPECIFIC RESULTS. THE SITE AND ITS CONTENT ARE DELIVERED ON AN “AS-IS “ BASIS. INFORMATION PROVIDED ON THE SITE IS SUBJECT TO CHANGE WITHOUT NOTICE. WE ANNOT ENSURE THAT ANY PROGRAMS, FILES OR OTHER DATA YOU DOWNLOAD FROM THE SITE WILL BE OF VIRUSES OR DESTRUCTIVE FEATURES.

WE DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF ACCURANCY, NON-INFRIGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. WE DISCLAIM ANY AND ALL LIABILITY FOR THE ACTS, OMISSION AND CONDUCT OF ANU THIRD PARTIES IN CONNECTION WITH OR RELATED TO YOUR USE OF THE SITE AND/OR ANY OF OUR SERVICES. YOU ASSUME TOTAL RESPONSIBILITY FOR YOUR USE OF THE SITE AND ANY LINKED SITES. YOUR SOLE REMEDY AGAINTS US FOR DISSATISFACTION WITH THIS SITE OR ANY CONTENT CONTAINED ON THE SITE IS TO STOP USING THE SITE OR THE CONENT. THE LIMITATION OF RELIEF IS A PART OF BARGAIN BETWEEN THE PARTIES.

The above disclaimers apply to any damages, liability or injuries caused by any failure of performance, error, omission, interruption , defect of any kind, delay of operation or function, computer virus, communication failure, theft or destruction of or unauthorized access to, alteration of, or use, whether for breach of contract, tort, negligence or any other cause of action.

AUTHORITY TO FORM A CONTRACTAUTHORITY TO BIND

- an individual has the authority to commit a company to an online contract is a greater problem than a forged identities in electronic commerce.

TERMS OF AGREEMENT

- many web sites have stated rules that site visitors must follow, although most visitors are not aware of these rules. If you examine the home page of a web site, you will often a link to page titled “ terms of service ” , “ conditions of use”, “ user agreement” , or something similar.

TERMS OF SERVICE

- are agreement even when they appear under a different title. In most cases, a site visitor is held to the terms of service even if that the visitor has not read the content or click the button to indicate agreement with the terms. The visitor is bound to the agreement by simply using the site, which is an example of the Web-wrap acceptance you learned about earlier in this chapter.

EXAMPLE OF TERMS OF SERVICEYour access to this site is provided by the example association . This term of service agreement describes your rights and responsibilities and states the terms and conditions under which you may use this web site. Please read this documents carefully. By using this web site, you are indicating your acceptance to be bound by the terms and condition by this agreement. If you do not accept the terms and conditions stated here, the association is not willing to allow you to use the web site and you should immediately stop using it. It is your responsibility to review the Agreement periodically so you are aware of this content.

USE AND PROTECTION OF INTELLECTUAL PROPERTY IN ONLINE BUSINESS

Intellectual property is a general terms that includes all products of a human mind. These products can be tangible or intangible. Intellectual property rights includes the protections afforded to individuals and companies by governments through governments’ granting of copyrights and patents, and through registration of trademarks and service marks.

Right of publicity, which limited right to aspect identity.

COPYRIGHT ISSUES Copyright is a right granted by a government to the author or creator of a literary or artistic work. The right is for the specific length of time provided by the copyright law and gives the author or creator the sole and exclusive right to print, publish or sell the work.

Creations that can be copyrighted include virtually all forms of artistic or intellectual expression-books, music, artworks, recordings (audio and video), architectural drawings, choreographic works, product packaging, and computer software.

VICARIOUS COPYRIGHT INFRINGEMENT- if it is capable of supervising the infringement activity and obtains financial benefits from the infringing activity.

PATENTS ISSUESPATENTS ISSUESA PATENT- is an exclusive right granted by the government to an individual to make, use and sell an invention.

THE BUSINESS PROCESS PATENT- which protects a specific set of procedures for conducting a particular business activity.

TRADE MARK- is a distinctive mark, device, motto or implement of the company affixes to the goods it produces for identification purposes.

SERVICE MARK- is a similar to a trade mark, but it is use to identify service provided.

TRADE NAME- is the Name that the business use to identify itself.

COMMON LAW- is the part of the business law established by the history of court decisions that has accumulated over many years.

STATUTORY LAWS- arises when elected legislative bodies pass laws, which are also called statues.

TRADE MARK ISSUESTRADE MARK ISSUES

CYBERSQUATTING-is a practice of registering a domain names that is the trade mark of another person or a company that hoping that the owner of the trade mark pay a huge amount of money to acquire the url.

TYPOSQUATTING- called name changing occurs when someone registers purposely misspelled variation of well-known domain names.

WORLD INTELLECTUAL PROPERTY ORGANIZATON- settled issues arises when someone has registers the domain name that is the existing trademark or an existing company or a person.

DOMAIN NAMES AND INTELLECTUAL DOMAIN NAMES AND INTELLECTUAL PROPERTY ISSUESPROPERTY ISSUES

NAME STEALING- occurs when someone other than the owner of the

domain names uses the name.

Protecting intellectual property online

1. Digital watermark- digital code or stream embedded undetectably in a digital image or audio file.

2. Verance- is a company that provides among other products, digital audio, water making system to protect audio files on the internet.

3. Blue spike- produces watermarking system that authenticates copyright and provides copy control.

4. Copy control- electronic mechanism for limiting the number of copies that one can make digital work.

5. Digimarc- another company that provides watermark intellectual property protection software.

Defamatory statement- is a statement that is false and that injures the reputation of another person.

Trademark dilution- is the reduction of the distinctive quality of a trademark by the alternative uses.

TYPES OF CYBERCRIME ONLINE

1. CYBERBULLYING- can include threat, sexual remarks, or pejorative comments transmitted on the internet or posted on the web.

2. SEXTING- is a crime in many jurisdictions. The practice of sending sexually explicit messages or photo using a mobile phone.

ELECTRONIC COMMUNICATIONS PRIVACY ACT OF 1986

Is the main law governing privacy in the internet today.

CHILDRENS ONLINE PRIVACY PROTECTION ACT OF 1996- which provides restriction on data collection that must be followed by electronic commerce.

LET’S PLAY

ERCYBLLYINGBU

ANSWER

CYBERBULLYING

LPIEDMI ARNRWTAY

ANSWER

IMPLIED WARRANTY

CIVERSE KARM

MKRTDERAA LIOTDULIN

ANSWER

TRADEMARK DILLUTION

NTYRWARA AIMERCLSID

ANSWER

WARRANTY DISCLAIMER

THANK YOU!