Unit 10. Staying Legal in Cyberspace

When it comes to the law it’s just not true that in cyberspace no one can hear your scream. Companies will have to walk a digital tightrope to ensure that their Web sites do not breach the laws of any country where they want to sell electronically.

Selling goods and services over the Internet is about to become a cheap and efficient way for many companies to reach a large group of potential customers. But those suppliers wanting to use the Internet as a way to attract customers from different countries face a vast array of different laws and regulations, from copyright and trade marks to advertising standards and even what constitutes decency. The idea of a “one size fits all” Web site may not be an option.

Online suppliers who have no interest in building long-term business relationships can probably avoid acting within the law. After making some quick money, they can easily shut down their business in one obscure jurisdiction which has little regard for enforcement of the law and transfer to another.

However, for the vast majority of suppliers the problem of Internet law should be a major concern. The fact is that a company Web page should not breach laws in any country of the world.

A directive from the EU Parliament should result in common laws throughout the European Union.

Once electronic orders start rolling in there is the question, of how different countries treat a transnational order. Who is liable and for how much, if security measures don’t work and money or goods are lost or stolen?

Could the product being supplied cause personal injury or death? If so liability for product defects could lead to huge law suits, particularly in some jurisdictions like the US. By selling over the Internet and agreeing to take orders from certain countries the companies may well be moving into new markets and need to increase insurance covers.

However, if the Web site makes it clear that all orders can be rejected by a supplier then it can reserve the right to keep out of certain countries if it thinks the legal exposure would be too high.

There can also be problems with the formation of contracts. Under English law, for example, there is no need for a contract to be signed to be valid. Agreements which are legally enforceable are made all the time by telephone or in meetings or by fax. E-mail is no different.

Clearly as with all other contracts a supplier needs to make sure its standard terms and conditions of sale are sent by some means to the buyer before the contract is made, but in some ways this is easier electronically than it is by fax. With faxes, sales departments can all too easily forget to fax the reverse of order confirmation forms where the all important conditions appear.

Companies need to consider where their main customers are located. If they are in a country where a contract must be signed to be valid, and local law overrides any law set out in standard terms, then the Internet may be a useless tool to form binding contracts.

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