The Law of E-Commerce: E-Contracts, E-Business

© 2011 Dr. Abdulhadi M. Alghamdi. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

First published by AuthorHouse 11/10/2011

ISBN: 978-1-4678-8603-1 (sc)

ISBN: 978-1-4678-8604-8 (ebk)

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Contents

Abstract

Abbreviations

Table of Statutes

Table of Cases

Chapter One

Chapter Two

Chapter Three

Chapter Four

Chapter Five

Chapter Six

DEDICATIONS

To my parents,

To my wife, daughter and son

Abstract

Electronic commerce raises a number of legal problems such as the need for authentication, liabilities, whether electronic records are admissible as evidence and whether electronic transmission considered ‘writing’ where writing is required. Many legal systems have faced or will face some questions, such as whether electronic evidence is inadmissible only on the grounds of being created or stored electronically? Should the law of evidence be reformed in order to meet the new technologies? It is questionable whether electronic communications and records can or should meet the legal requirements of writing and signature. Do electronic and digital signatures satisfy the legal requirements? It has been argued that it is not logical and reasonable to apply legal requirements that have been constituted on the grounds of paper-based communication to electronic communication. Electronic contracts raise some legal issues, including whether the contract must be in a particular form or authenticated; when the message is sent and received; whether it is received in the same form as it is sent; validity, time and place of communication; ‘cross-offers’ and ‘battle of forms’ issues. All these issues are considered from the UK common law point of view and according to the SICG, UNIDROIT Principles, PECL, UNCITRAL Model Law and the Uniform Commercial Code. Electronic contracts need consideration whether a computer can properly be used to enter into a contractual relationship, to which existing rules on contract negotiation may need to be developed to suit formation of contracts by means of computer and telecommunications and whether old rules are appropriate for today’s technology. This book examines other legal problems relating to contracts formed on the Internet, including the use of electronic agents, enforceability of clickwrap agreements, electronic payments and choice-of-law and jurisdiction issues.

Abbreviations

ACPA: US Antcybersquatting Consumer Protection Act 1999.

ATM: Automated Teller Machine.

BIOS: Basic Input/Output System.

ccTLD: Country Code Top Level Domain Name.

CISG: United Nations Conventions on Contracts for the International Sale of Goods1980.

CPU: Central Processing Unit.

CSP: Cryptography Service Provider.

DNS: Domain Name System.

E-Agent: Electronic Agent.

ECA: UK Electronic Communications Act 2000.

E-Cash: Electronic Cash.

ECD: European Electronic Commerce Directive 2000.

E-Cheque: Electronic Cheque.

E-Commerce: Electronic Commerce.

EDI: Electronic Data Interchange.

EFTA: European Free Trade Area States.

EGBGB: Introduction Law to the German Civil Code.

ESD: European Electronic Signatures Directive 1999.

E-Signature: Electronic Signature.

FATF: Financial Action Task Force on Money Laundering.

gTLD: Generic Top Level Domain Name.

HTML: Hypertext Markup Language.

HTTP: Hypertext Transfer Protocol Used to Transfer Information.

IANA: Internet Assigned Number Authority.

IAP: Internet Access Provider.

ICANN: Internet Corporation for Assigned Names and Numbers.

IP: Internet Protocol.

ISP: Internet Service Provider.

Magex: A Digital System Incorporates Both Payment and Copyright Protection Elements.

MIME: Multipurpose Internet Mail Extension.

NAF: National Arbitration Forum.

NSI: Network Solution.

PECL: Principles of European Contract Law.

PIN: Personal Identification Number.

PKC: Public Key Cryptography.

POP: Post Office Protocol Server.

RAM: Random Access Memory.

SET: Secure Electronic Transaction.

SLD: Second Level Domain Name.

SMTP: Simple Mail Transfer Protocol.

SSL: Secure Sockets Layer.

TCP/IP: Transmission Control Protocol/Internet Protocol.

TLD: Top Level Domain Name.

TPA: Trading Partner Agreement.

UCC: US Uniform Commercial Code.

UCITA: US Uniform Computer Information Transactions Act.

UDRP: Uniform Domain Name Dispute Resolution Policy.

UECA: Canadian Uniform Electronic Commerce Act 1999.

UECA: Canadian Uniform Electronic Commerce Act 1999.

UETA: US Uniform Electronic Transactions Act.

UNCITRAL: United Nations Commission on International Trade Law.

UNIDROIT Principles: Principles of International Commercial Contracts Formulated by the International Institute for the Unification of Private Law 1994 (Rome Institute)

URL: Uniform Resource Locator.

WIPO: World Intellectual Property Organization.

WWW: World Wide Web (Web).

Table of Statutes

Anticybersquatting Consumer Protection Act 1999 (ACPA) (US).

Australia Evidence Act 1995.

Australian Payment System (Regulation) Act 1998.

Belgian Civil Code.

Betting and Gaming Act 1981

Brussels Convention on Jurisdiction and Enforcement of Judgment in Civil and Commercial Matters.

Canada Sale of Goods Act 1990.

Canadian Uniform Electronic Commerce Act 1999 (UECA).

Civil Evidence Act 1968 (England).

Civil Evidence Act 1995 (England).

Civil Evidence (Scotland) Act 1988.

Coinage Act 1971.

Consumer Credit Act 1974.

Currency and Bank Notes Act 1954.

Digital Signature Act 1995 (Utah).

Digital Signature Act 1997 (German).

Electronic Commerce Directive 2000 (ECD) (EU).

Electronic Communications Act 2000 (UK).

Electronic Signatures Directive 1999 (ESD).

European Directive on Unfair Terms in Consumer Contracts.

Evidence Act 1938 (England).

Federal Rules of Evidence (US).

Federal Trademark Dilution Act 1995 (US).

Forgery and Counterfeiting Act 1981.

French Civil Code.

Hamburg Convention on the Carriage of Goods by Sea.

Interpretation Act 1978.

Introduction Law to the German Civil Code (EGBGB).

Italian legislation on Electronic Documents and Digital Signatures.

Lugano Convention on Jurisdiction and Enforcement of Judgment in Civil and Commercial Matters 1988.

Principles of European Contract Law (PECL).

Proposal for a Council Regulation (EC) on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters.

Requirements of Writing (Scotland) Act 1995.

Restatement (Second) of Conflict of Laws.

Rome Convention.

Restatement (Second) of Contracts 1979 & 1981.

Statute of Frauds 1677 (UK).

Solicitors Act 1932 (UK)

Trademark Act 1946 (US).

Trademark Infringement Act (US).

UK Banking Act 1987.

UK Contracts (Applicable Law) Act 1990.

UK Copyright Act 1988.

UK Financial Services Act 1986.

UK Money Laundering Regulations 1993.

UK Sale of Goods Act 1979.

UK Trade Marks Act 1994.

UK Unfair Contract Terms Act 1977.

UNCITRAL Model Law on Electronic Commerce (Model Law).

UNCITRAL Model Law on Electronic Signatures 2001.

Unfair Terms in Consumer Contracts Regulations 1994.

Unfair Terms in Consumer Contracts Regulations 1999(as amended in 2001).

UNIDROIT Principales.

Uniform Commercial Code (UCC).

Uniform Computer Information Transactions Act (UCITA) (US).

Uniform Domain Name Dispute Resolution Policy (UDRP).

Uniform Electronic Transactions Act (UETA) (US).

United Nations Conventions on Contracts for the International Sale of Goods (CISG).

United Nations Convention on International Bills of Exchange and International Promissory Notes.

Wills Act 1837 (UK).

Table of Cases

Abercrombi & Fitch Co. ν Hunting World Inc., 537 F. 2d 4 (2d Cir. 1976).

Accuride Int’l Inc. ν Accuride Corp., 871 F. 2d 1531 (9th Cir. 1989).

ACLU ν Reno [929 F. Supp. 824 (E.D. Pa1996].

Actmedia Inc. ν Active Media Int’l Inc., No. 96C 3448 (U.S. Dist. 1996).

Adams ν Lindsell [1818] 1 B & Ald 681.

Adelaide Electric Supply Co. Ltd. ν Prudential Assurance Co. Ltd. [1934] AC 122.

Advent Systems Ltd. ν Unisys Crop. 925 F. 2d 675 (3rd Cir. 1991).

AEB & Associates Design Group Inc. ν Tonka Corp., 853 F. Supp. 724 (SDNY 1994).

Agar Crop. ν Multi-Fluid Inc. No.95-5105, 1997 U.S. Dist. (S.D. Tex. 1997).

American Airlines Inc. ν A 1-800-A-M-E-R-I-C-A-N Corp., 622 F. Supp. 673 (N.D. Ill. 1985).

American Civil Liberties Union ν Reno, 929 F. Supp. 824 (ED Pa. 1996).

American Eyewear ν Peeper’s Sunglasses, 106 F. Supp. 2d 895 (2001).

American Standard Inc. ν Toeppen, 96 CV 02147 (U.S. Dist. 1996).

Arizona Retail Systems Inc. ν Software Link Inc., 831 F. Supp. 759 (D. Ariz. 1993).

Asahi Metal Industry Co. Ltd. ν Superior Court of California, 480 U.S. 102 (1986).

Australian Stock Exchange Ltd. & Anor ν ASX Investor Services Pty Ltd., 1998, NG1390.

Avery Dennison Corporation ν Sumpton, 999 F. Supp. 1337 (CD Cal. 1998).

Avnet Inc. ν Isoact Limited (Avnet) [1998] FSR 16.

Bally Total Fitness Holding Co. ν Faber, 29 F. Supp. 2d 1161 (CD Cal 1998).

Banco de Portugal ν Waterlow & Sons Ltd. [1932] Ac 452..

Bazak International Corp. ν Mast Industries Inc., 535 NE 2d 633 (NY 1989).

Beatty ν First Explor. Fund [1988] 25 B.C.L.R. (2d) (B.C.S.C.) Australia.

Bellco First Federal Credit Union ν Kaspar (In re Kaspar), No. 96-1462 10th Cir (D.C. Cir. 1997).

Bensusan Restaurant Corp. ν Patterson, 93 F. Supp. 295 (S.D.N.Y. 1996).

Beta Computer (Europe) Ltd. ν Adobe Systems (Europe) Ltd. [1996] FSR 367.

Blau Plumbing Inc. ν S.O.S. Fix-it Inc., 781 F. 2d 604 (7th Cir. 1986).

Border Harvesters ν Edwards Engineering (Perth) Ltd. [1985] SLT 128.

Brinkibon Ltd. ν Stahag Stahl GmBH [1982] 1 All ER 293; [1983] 2 AC 34.

British Road Services Ltd. ν Arther V. Crutchley Ltd. [1968] 1 All ER 811.

British Steel Corp. ν Cleveland Bridge & Engineering Co. Ltd. [1984] 1 All ER 504.

British Telecommunications Plc & Ors ν One in a Million [1999] RPC 1.

Brogden ν Metropolitan Rail Co. [1877] 2 AC. 666.

Brookfield Communications Inc. ν West Coast Entertainment Corporation, 174 F. Supp. 3d 1036, 50 USPQ 2d 1546 (9th Cir. 1999).

Brower ν Gateway 2000 Inc., 676 N.Y.S.2d 569 (New York Supreme Ct. App. Div. 1998).

Brydges ν Dix [1891] 7 TLR 215.

Burnley ν Alford [1919] 2 SLT 123.

Butler Machine Tool Co. Ltd. ν Ex-Cell-O Corp. Ltd. [1979] 1 All ER 965; [1979] 1 WR 40 CA.

Byrne v Lean Van Tienhoven & Co., [1848] C.P.D. 344; 49 L.Q.B. 316.

Cable News Network ν CNNews.com, 162 F. Supp 2d 484 (E.D. Va. 2001).

Caesar’s World Inc. ν Caesars-Palace.com, 112 F. Supp. 2d 502 (E.D. Va. 2000).

Camichael ν C’s Exrx. [1920] SC 195.

Campbell ν Ker, 24 February [1810] FC.

Car Toys Inc. ν Informa Unlimited Inc, No. FA0002000093682 (Nat’l Arbitration Forum March 2000).

Cardservice International ν McGee, 950 F.Supp. 737 (E.D. Va. 1997).

Carlill ν Carbolic Smoke Ball Company [1893] 1QB 256 CA.

Carnival Cruise Lines ν Shute 499 US 585 (1991).

Caspi ν Microsoft Network, 732 A. 2d 528 (N.J. Super Ct. App. Div. 1999).

Castle ν Cross [1985] All ER 87.

CD Solutions ν Tooker 965 F. Supp. 17 (N.D. Tax. 1970.

Chapman ν Smethurs [1909] 1 KB 927.

Clarke ν Earl of Dunraven and Mount-Earl [1897] AC 59.

Clifton ν Palumbo [1944] 2 All ER 497.

Clipper Maritime Ltd. ν Shirlstar Container Ltd. [1987] 1 Lloyd’s Rep. 546.

Coco ν Clark [1986] FSR 415; [1969] RPC 41.

Colqhoun ν Wilson’s Trs [1860] 22 D 1035.

Commerce & Industry Insurance Company ν Bayer Corp., 433 Mass. 388 (742 2d 567, 2001).

Communication Crop. ν Pulse Communications Inc., 170 F. 3d 1354 (Fed. Cir. 1999).

Comp Examiner Agency ν Juris Inc, No. 96-0213-WMB (U.S. Dist. 1996).

CompuServe ν Patterson, 89 F. 3d. 1257 (6th Cir. 1996).

Corinthian Pharmaceutical Systems Inc. ν Lederle Laboratories 724 F. Supp. 605 (S. D. Ind. 1989).

Countess of Dunmore ν Alexander [1930] 9 Shaw 190.

Cowan ν O’Connor [1888] 20 QB 640.

Cybersell Inc. ν Cyber Sell Inc. 130 F. 3d. 414 (9th Cir. 1997).

Dial-A-Mattress Franchise Corp. ν Page 880 F. 2d 675 (2nd Cir. 1989).

Data Concepts Inc. ν Digital Consulting Inc., 150 F. 3d 620 (6th Cir. 1998).

Data Disc Inc. ν Systems Technology Associations Inc. 557 F. 2d 1280 (9th Cir. 1977).

Dawson International plc ν Coates Paton pl [1993] SLT 80.

Decker ν Circus Circus Hotel, No. 97-1848 (D.N.J. 1999).

Delinger ν Dendler, 415 Pa. Super. 164, 608 A. 2d 1061 (1992).

Derby & Co. ν Weldon [1991] 1 WLR 653.

Desknet Systems Inc. ν Desknet Inc, 42 U.S.P.Q. 2d 1954 (S.D.N.Y. 1997).

Dickinson ν Dodds [1876] 2 Ch. D. 463.

Dickson ν National Bank [1917] SC 50.

Digital Equipment Corporation ν AltaVista Technology, 960 F Supp 456 (D. Mass., 1997).

Direct Line Group Ltd. ν Direct Line Estate Agency Ltd. [1997] FSR 374.

Director General of Fair Treading ν First National Bank [2000] 2 All E.R. 759.

Doherty ν Registry of Motor Vehicles, No. 97CV0050 (Mass 1997).

Dranoff-Peristein Assocs. ν Sklar, 967 F. 2d 852 (3d Cir. 1992).

Dunlop ν Higgins [1848] 6 Bell’s App 195.

Dunlop ν Selfridge [1915] AC 847.

Eaglehill Ltd. ν J. Needham Ltd. [1973] A.C. 992.

E-cards ν King, No. 99-CV3726 (N.D. Cal. 2000).

ECash Techs. Inc. ν Guagliardo, 127 F. Supp. 2d 1069 (C.D. Cal. 2000).

Electronic Boutique Holdings Corp. ν Zuccarini, 56 USPQ 2d 1705 (ED 2000).

Entores Ltd. ν Miles Far East Corporation [1955] 2 QB 327; [1955] 2 All ER 493.

Errol ν Walker [1966] SC 93.

Ex parte Dryden [1893] 14 NSWR 77.

Findlater ν Mann [1990] STL 46.

Fisher ν Bell [1961] 1QB 394.

Foster ν MacKinnon [1869] 4 L R 704.

Garton ν Hunter [1969] 1 All E R 451.

Gateway 2000 Inc. ν Gateway.com Inc., US Dist LEXIS 2144 (EDNC 1997).

Gibson ν Manchester City Council [1979] 1 W L R 294; [1979] 1 All ER 972.

Gill & Duffus Lanauer Ltd. ν London Export Corp. [1982] 2 Lloyd’s Rep 627.

Goodman ν J Eban Ltd. [1954] 1 QB 550.

Greenlees ν Manchester Insurance Company [1933] SC 383.

Groff ν American Online Inc., No. PC 97-0331, 1998 WL 307001 (R. I. Super. 1998).

GTE New Media Services Inc. ν Ameritech Corp. 21 F. Supp. 2d. 27 (D.D.C. 1998).

Guthman ν La Vida Llena, 709 P. 2d 675 N.M. (1985).

H ν Schering Chemicals [1983] 1 All ER 849.

Hanson ν Denckla, 357 U.S. 235 (1958).

Hardwick Game Farm ν Suffolk Agriculture & Poultry Producers Ass’n [1968] 2 All E.R. 444.

Harris’ Case [1872] L R 7 Ch App 587.

Harrods ν UK Network Services Limited & others H 5453 [1996] (unreported).

Harvey ν Facey [1893] A. C. 552.

Hasbro ν Clue Computing Inc., 45 United States P Q 2d 1170 (D Mass 1997).

Hasbro Inc. ν Clue Computing Inc., 66 F. Supp. 2d 117 (D M A 1999).

Hasbro Inc. ν Internet Entertainment Group Ltd., WL 84853 (W. D. Wash 1996).

Hastie & Jenkerson ν McMahon [1991] 1 All E R 254.

Hebb’s case [1867] Law Rep. 4 Eq 9.

Helicopters National de Columbia, S. A. ν Hall [466 U.S. 408, 1983].

Henthorn ν Fraser [1892] 2 Ch 27.

Hill ν Gateway 2000 Inc., 105 F.3d 1147 (7th Cir. 1997).

Holiday Inns Inc. ν 800 Reservation Inc., 838 F. Supp. 1247 (E. D. Tenn. 1993).

Hollywood Casino Corporation ν Global Interactive, NAF File No FA002000094107 (Arbitration).

Home Interiors & Gifts Inc. ν Home Interiors, No. D2000-0010 WIPO (March 7, 2000) (Arbitration).

Hotmail Corporation ν Van Money Pie Inc., 47 U.S.P.Q. 2d 1020, 1998 WL 388389 (April 1998, N D Cal.).

Household Fire Insurance ν Grant [1879] 3 Ex D 216.

Howley ν Whipple [1869] 48 NH 487.

Hyde ν Wrench [1840] 3 Beav 334.

Henderson ν SBS Realisation Ltd., Court of Appeal, 13 April1992 (Unreported).

Hearst Comm. Inc. ν Spencer, No. FA9003763 (NAF Apr. 13, 2000) (Arbitration).

I. Lan Systems Inc. ν Netscout Service Level Corp., 183F. Supp. 2d 328 (D. Mass. 2002).

Idaho Power Co. ν Westinghouse Elec. Corp. 596 F. 2d 924 (9th Cir. 1979).

Infinity Broadcasting Corp. ν Greater Boston Radio II, Inc., 32 USPQ 2d 1925 (D. Mass. 1994).

Inset Systems Inc. ν Instruction Set Inc., 937 F. Supp. 161 (D. Conn. 1996).

Interfoto Picture Library ν Stiletto Visual Programmes [1989] 1 Q.B. 433; [1988] 1 All ER 348.

Intermatic Inc. ν Toeppen, 947 F. Supp. 1227 (N.D. Ill. 1996).

International News Services ν Associated Press, 248 U.S. 215 (1918).

International Order of Job’s Daughters ν Lindenburg & Co., 633 F. 2d 912 (9th Cir. 1981).

International Shoe Co. ν Washington [326 U.S. 310, 1945].

Interocean Shipping Co. ν V. National Shipping & Trading Corp., 423 US 1054 (2nd Cir. 1976).

Interstellar Starship Services Ltd. ν Expix Inc., 983 f. Supp. 1331 (D. Ore. 1997).

J. Crew Int’l Inc. ν crew.com, No. D2000-0054 (WIPO Apr. 20, 2000) (Arbitration).

J. Spurling Ltd. ν Bradshaw [1956] 1 W.L.R. 461.

J.M. Smith ν Colquhoun’s Tr. [1901] 3 F. 981

Jews For Jesus ν Brodsky, 993 F. Supp 282, 46USPQ2d 1652 (DNJ 1998)

Jones ν Daniel [1894] 2 Ch 332.

Jones ν Horace Mann Insurance Co., 937 P. 2d 1360 (1997).

Juno Online Services ν Juno Lighting Inc, 979 F. Supp. 684 (ND Ill. 1997).

Kajala ν Noble [1982] 75 Cr. App. R 149.

KCPL Inc. ν Nash, 49 US PQ 2d 1584 (SDNY 1998).

Kennedy ν Lee [1817] 3 Mer 441.

Kremen ν Cohen, 99 F. Supp. 2d 1169 (N.D. Cal. 2000).

Lamport & Holt Lines ν Coubro & Scrutton [1981] 2 Lloyd’s Rep.

Lark ν Outhwaite [1991] 2 Lloyd’s Rep 132.

Lea Tai Textile Co. ν Menning Fabrics 411 F. Supp. 1404 (S.D.N.Y. 1975).

Leach Nominees Pty Ltd. ν Walter Wright Pty Ltd. [1986] WAR 244.

Lightman J. in Glaxo Plc. ν Glaxo-Wellcome Ltd. [1996] FSR 388.

Lockheed Martin Corp. ν Network Solutions Inc, 194 F. 3d 980 (9th Cir. 1997).

London ν City of Gainesville, 768 F. 2d 1223 (11th Cir. 1986).

Lucent Technologies Inc. ν Lucentsucks.com, 95 F. Supp 2d 528 (ED Va. 2000).

M.A. Mortenson Company Inc. ν Timberline Software Corp., 970 P.2d 803 (Wash. App. 1999).

Madden ν Kaiser Found Hosps., 552 P.2d 1178 (Cal. 1976).

Maritz Inc. ν Cybergold Inc., 947 F. Supp. 1328 (E.D.Mo. 1996).

Marks & Spencer & Ors ν One in a Million [1998] FSR 265.

Mary-Lynn Mondich & Other ν Shane Brown, WIPO Case No D00-0004 (Arbitration).

Maxwell ν Fidelity Services, Inc., 184 Ariz. 82, 907 P. 2d 51 (1995).

McCaughn ν American Meter Co., 67 F 2d 148, 149 (U S Court of Appeals, 3rd Cir).

McCrone ν Boots Farm Sales [1981] SLT 103.

McDonough ν Fallon McElligott Inc., 40 United States, P Q 2D 1826.

Mclevr ν Richardson [1813] 1 M & S 557.

Mendoza ν America Online Inc., No. 827047-2 (Cal. Sup. Ct, 2000).

Meritt ν Meritt [1970] 1W L R 1211.

Micro Star ν Formgen Inc., 942 F. Supp. 1312, Aff’d 154 F. 3d 1107 (9th Cir. 1998).

Microsoft ν Electrowide [1997] FSR 380.

Millennium Enterprises Inc. ν Millennium Music, L P 33 F. Supp.2d.907, 911 (D. Or. 999).

Morrison ν Paterson [1985] SLT 255.

Morton ν Copeland [1855] 24 L.J.C.P. 169.

Moss ν Hancock [1899] 2 QB 111.

MTV Networks ν Adam Curry, 867 F. Supp. 202 (S.D.N.Y. 1994).

Myers ν DPP [1965] AC 1001.

Network Solutions Inc., ν Umbro Int’l Inc. 529 S.E.2d 80 (Va. 20000).

Newborn ν Sensolid LD [1954] 1 QB 45.

Nicolene Ltd. ν Simmonds [1953] 1 Q B 543.

Nieczkowski ν Masco Corp., [1997 F supp 782].

Nissan Motor Co. ν Nissan Computer Corp., 89 F. Supp. 2d 1154 (CD Cal. 2000).

Northrop Corp. ν Litronic Industry, 29 F. 3d 1173 (7th Cir. 1994).

Official Airlines Guides Inc. ν Goss, 6 F. 3d 1385 (9th Cir. 1993).

Offord ν Davies [1862] 12 C.B. 748.

Oggi Advertising Ltd. ν Mckenzie and Ors. [1998] 1 NZLR 631.

Owners of Motorship Sapporo Maru ν Owners of Steam Tanker Statue of Liberty [1968] 2 All ER 195.

Pagnan SpA ν Feed Products Ltd. [1987] 2 Lloyd’s Rep 601.

Panavision International ν Toeppen 945 F. Supp. 1296 (1998)

Parisi ν NetLearning Inc., 139 F. Supp. 2d 745 (E.D.V. 2001)

Partridge ν Crittenden [1968] 1 WLR 1204; [1968] 2 All E.R. 421

Pathfinder Communications Corp. ν Midwest Communications Co., 593 F. Supp. 281 (N. D. Ind. 1984).

Payne ν Cave [1789] 3 T.R. 148.

Pennoyer ν Neff, 95 U.S. 714 (1877).

Pharmaceutical Society of GB v. Boots Cash Chemists [1952] 2 QB 795.

Phillimore ν Barry [1818] I Camp. 513.

Pitman Training Ltd. ν Nominet UK and Anor. [1997] FSR 797.

Planned Parenthood Federation of America Inc. ν Richard Bucci, 42 USPQ 2d 1430 (SDNY 1997).

Poel ν Brunswick-Balke-Collender Co., 110 United States, N.E. 619 (N.Y. 1915).

Pollstar ν Gigmania Ltd., 170 F. Supp. 2d. 974 (E. D. Cal. 2000); 2000 WL 33266437 (E. D. Cal. 2000).

Primrose ν Western Union Telegraph Co., 154 US 1 (1893).

Prince plc. ν Prince Sportswear Group Inc. [1998] FSR 21.

ProCD Inc. ν Zeidenberg, 86 F.3d 1447 (7th Cir. 1996).

R ν Clarke [1927] 40 CLR 227.

_ ν Cochrane [1993] Crim. L. R. 48.

_ ν Coventry Justices [1992] TLR 74.

_ ν Daye [908] 2 KB 333.

_ ν Governor of Bentonville Prison [1989] 3 All ER 701.

_ ν Pettigrew [1980] 71 Cr. App. R. 39.

_ ν Shephard [1991] Cr. App. R.139.

_ ν Shephardi [1993] AC 380.

_ ν Spiby [1990] 91 Cr. App. R.186.

_ ν Stevenson [1971] 1 WLR 1.

_ ν Waddon [1999] Southwark Crown Court, unreported.

_ ν Wayte [1983] 76 Cr. App. R.110.

_ ν Wood [1982] 76 Cr. App. R. 23.

Ramsgate Victoria Hotel C. ν Montefiore [1866] LR 1 Ex. 109.

Rayon Corp. ν Dutchess Underwear Corp. 92 F. 2d 33 (2d Cir. 1937).

Re a Debtor [1996] 2 All ER 345.

Registral.com LLC ν Fisher Controls International Inc., H-01-1423 (U.S. Dist 2001).

Robert Ellenbogen ν Mike Pearson, WIPO Case No D00-0001.

Rollo ν HMA [1996] SCCR 874.

Roofcare ν Gillies [1984] SLT (Sheriff Court) 8.

Roto-Lith Ltd. ν F P Barlett & Co., 297 F 2d 497 (1st Cir 1962).

Rudbart ν North Jersey District Water Supply Comm’n, 127 N.J. 344,2d 681 (1992).

Rutterford Ltd. ν Allied Breweries Ltd. [1990] SLT 249.

Saunders ν Anglia Building Society [1971] 1 App Cas 1004.

Scancarriers A/S ν Aotearoa International Ltd. (The Barranduna) [1985] 2 Lloyd’s Rep. 419.

Schelde Delta Shipping ν Astarte Shipping Ltd. [1995] 2 Lloyd’s Rep 249.

Shetland Times Limited ν Wills [1997] STL 669.

Shield ν Zuccarini 89 F. Supp. 2d 634 (ED Pa. 2000).

Shuey ν United States, 92 U.S. 73 (1875).

Smith ν Hughes [1871] LR 6 Q.B. 597.

Societe De Developments Et D’Innovations Des Marches Agicoles ν International Yogurt Co. Inc., 662 F. Supp. 839 (Or. 1987).

SoftMan Products Company LLC ν Adobe Systems Inc., 171 F. Supp. 2d 1075 (C.D. Cal 2001).

Sparks ν R [1964] AC 964.

Specht ν Netscape Communications Corp., 150 F.Supp.2d 585 (S.D.N.Y. 2001); No. 4871 (N. Y., July 5th 2001).

Sporty’s Farm LLC ν Sportsman’s Market Inc., 202 F. 3d 489 (2d Cir. 2000).

Spraying Sys. Co. ν Delavan Inc., 957 F. 2d 387 (7th Cir. 1992).

Springsteen ν Burgar, No. D2000-1532 (WIPO Jan. 25, 2001) (Arbitration).

Standard Bank London Ltd. ν Bank of Tokyo Ltd. [1995] 2 Lloyd’s Rep. 169.

State Farm Mutual Automobile Insurance Co. ν Bockhorst, 453 F 2d 533 (C. App., 10th Cir. 1972).

State of Minnesota ν Granite Gate Resorts Inc., 568 NW 2nd 715 (Minn. C. A. (1997).

Statue of Liberty [1968] 2 All ER 195.

Step-Saver Data Systems Inc. ν Wyse Technology, 939 F.2d 91 (3rd Cir. 1991).

Stevenson ν McLean [1880] 5 Q B 346.

Storm Impact Inc. ν Software of the Month Club, 13 F. Supp. 2d. 782 (N.D. Ill. 1998).

Strick Corp. ν Strickland, 162 F. Supp. 2d 372 (E.D. Pa. 2001).

Suffell ν Bank pf England [1882] 9 QBD 555.

Tata Sons Ltd. ν D & Enters, No. D2000-0479 (WIPO Aug. 18, 2000) (Arbitration).

TeleTech Customer Care Mgmt Inc. ν Tele-Tech Co. Inc., 977 F. Supp. 1407 (CD Cal. 1997).

Tenax Steamship Co. Ltd. ν Brimnes, The Brimnes [1975] 5 Q.B. 929.

Teper ν The Queen [1952] AC 480.

The Comp Exam’r Agency ν Juris Inc., WL 376600 (CD Cal. 1996).

Thoms ν Microsoft Corp., No. 88944, 2000 I11 (App. Ct. 1999).

Thomson ν James [1848] 6 Bell’s App 195.

Thomson ν James [1855] 18 D 1.

Thornton ν Shoe Lane Parking [1971] 2 Q B 163.

Ticketmaster Corp. ν Tickets.Com, No CV 99-7654 HLH WL 525390 (C. D. Cal. 2000); 2000 US Dist. LEXIS 4553 (C. D. Cal. 2000).

Tinn ν Hoffman [1873] 29 L T.

Tomothy ν Simpson [1834] 6 C&P 499.

Toys R Us Inc. ν Feinberg, 26 F. Supp. 2d 639 (ES Dist. 1998).

Tracomin S. A. ν Anton C Nielson [1984] 2 Lloyd’s Rep 195.

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Chapter One

Introduction

The term ‘electronic commerce’ or ‘e-commerce’ simply refers to business transacted by electronic means, which includes business-to-business and business-to-consumer transactions. The term is a broad concept that encompasses agreements concluded electronically through the exchange of e-mail over websites and the transfer of money by electronic means. It also refers to many other forms of transacting, such as the use of Automated Teller Machines (ATMs) and the submitting of various types of documents to government entities. For the purposes of this study, electronic commerce can be defined as the use of computers and telecommunications to conduct business transactions that encompass all the steps involved in negotiating, confirming, and performing commercial transactions electronically. These steps include placing and tracking orders, the delivery of goods or services, and the exchange of funds.

E-commerce is built fundamentally on the use of electronic communications systems, mainly the Internet, which have challenged our laws and do not recognize either geographic or jurisdictional boundaries. This has been proved to be an important advantage for participating in worldwide business. Also, electronic commerce has other advantages over paper-based commerce, including increasing speed while reducing paperwork and the cost of doing business. These advantages increasingly have encouraged businesses to transact electronically. This development is supported by advancements in global communication technologies, particularly the Internet, which have had a profound impact not only on commercial activities, but also on many aspects of our lives.

Despite the fact that companies have exchanged business data for many years by using different communication networks, the emergence of e-commerce has changed the method and nature of that exchange. As mentioned, e-commerce is most frequently associated with the use of the Internet, which allows one to advertise goods and services, make purchases, and arrange sales and payment. During its rapid growth, the Internet has made e-commerce open to every person and every company around the world. It provides businesses with the ability to reach customers without the need to have a physical existence (i.e., a shop) in different jurisdictions.

This book seeks to achieve several goals. First, since the Internet is growing so rapidly, e-commerce is open to every person and every company around the world, which in turn raises fundamental questions concerning the legality of transactions, fraud, and forgery. Second, the changes effected by new technologies generally and computers specifically are not trivial; they are substantial and demand our consideration. They have influenced specific areas of substantive and procedural law, which have implications for computers (evidence, contract, intellectual property, and so on). The ways in which developments in technology have made available a range of techniques (electronic mail, the Internet, legal databases whether on CD or on the Internet, etc.) have increasingly changed and may further change our laws, which is worth examining. In fact, the continuing technological advances have fundamentally outstripped the ability of some legal systems to keep pace. In addition, given the fact that e-commerce is based upon the processing and transmission of digitized data over the Internet, including visual images, text, and sound, it is questionable whether the ‘offline’ regulations are capable of applying to the ‘online’ world. Such applicability and sufficiency will be examined throughout the book. This book also examines the legal issues which have arisen from the use of electronic means as a method for conducting business. Moreover, it attempts to analyse case decisions and regulations that are related to electronic commerce. It will become necessary and helpful to bring to light legal responses to some technologies in the past, such as the telegraph, telex, and telephone. Doing so may provide some indication as to how new technology, such as the Internet, would be dealt with in legal terms.

The book seeks to analyse the most important of the legal issues that confront the application of the Internet to commercial purposes in the field of evidence and contract laws. It will address three current topics concerning electronic commerce, namely e-evidence, e-contracts, and e-business. While paying some attention to other jurisdictions’ regulations, it concentrates mostly on UK and US court decisions on this topic and related rulings, such as fax and telex; existing statutes; and new regulations concerning evidence, contract, and electronic payments. While focussing on the UNCITRAL Model Law on Electronic Commerce (the Model Law), this work also considers international instruments, namely the United Nations Convention on Contracts for the International Sale of Goods (CISG), the Principles of European Contract Law (PECL), and the UNIDROIT Principles of International Commercial Contracts.

Owing to its limited length, this book will not touch upon either of the legal issues (though they are important) of intellectual property or Internet governance. However, some of these issues, such as trademark and jurisdiction, will be considered since they are related to the issues discussed in this study. Also beyond the scope of this study are questions related to the regulation of online content, data protection, and privacy. Simply, this work focuses on evidence and contract laws. While the former concentrates on the admissibility and authentication of electronic messages, the latter focuses on the contract formation and other related issues in the electronic context.

Outlines of the chapters are as follows.

Chapter Two is devoted to the evidential issues that emerge from using computer technology. Section 2.1 of this chapter provides a general introduction to evidence law and the likely legal issues that may arise because of the use of electronic means. Examining such legal issues requires an understanding of related technology. Therefore, section 2.2 provides a brief overview of computer technology.

Because the law of evidence has a great role to play in regulating the preparation, presentation, and evaluation of evidence, the use of computers in business transactions raises a number of legal problems in this branch of law. It has been noted that in litigation there are two basic questions underlying the decision to receive proffered material. The first question is whether the material is relevant; that is, logically probative. If so, the second question is whether the material is excluded by any of the rules or evidentiary principles.¹ Accordingly, section 2.3 focuses on the hearsay rule and electronic records.

Section 2.4 deals with the best evidence rule and electronic records. It is devoted to analysing the admissibility of electronic records and examines some concepts, such as ‘document’, ‘original’, and ‘copy’. Technology infiltrates further and further into our everyday life. Telephone, facsimile, and computers have brought about vast changes in fashions and methods of communication. Such effects manifest themselves increasingly in the fabric of the law. The law of evidence is one branch of law which has been affected. It has been argued that as government and business increasingly rely on computer record-keeping systems, the question of the admissibility in evidence of computer printouts becomes crucial.² The uncertainty of a national law regarding the admissibility of electronic messages into evidence in the case of a dispute has been characterised as an obstacle to the implementation of electronic commerce. As will be seen, computer evidence presents issues different from those presented by traditional record-keeping systems. The problem emerges when computer-generated evidence is treated in a manner comparable to the treatment of conventionally prepared writings under the law of evidence. Electronic documents are now the basis for many business transactions and are produced, stored, and transmitted globally in unprecedented numbers. Electronic evidence is no more than information that is recorded electronically. It may be created electronically or simply sorted electronically. It has become critical, because it differs from traditional evidence. The use of electronic records such as computer records results in a substantial departure from the traditional methods and procedures of record keeping. Consequently, the type of evidence available, its reliability, and its admissibility are greatly affected. The question of evidence involves the quality of evidence and its admissibility. It is arguable whether or not an electronic document is ‘original’. If not, is it a copy that is admissible? Is this document admissible under the best evidence rules?

Section 2.5 examines the legality of authenticating electronic messages. The authentication of electronic messages raises several questions, such as, What is the legal status of electronic and digital signatures? Can electronic documents be ‘signed’ in a way that is legally recognized? What should constitute a signature?

Finally, a conclusion to the above-mentioned parts will be provided in section 2.6.

The law of contract is the ‘foundation on which commercial law rests’.³ Therefore, Chapter Three discusses legal issues related to sale-of-goods contracts in the Internet context. Like traditional commerce, most electronic commerce involves the creation of contracts. This may explain why many of the developments in the law governing electronic commerce concern contract formation.

Section 3.1 provides an introduction to sale-of-goods contracts and the issues arising out of forming such contracts on the Internet. Section 3.2 presents a simplified explanation of the related technology, introducing certain terms and concepts that will be used repeatedly throughout the text. This section should illustrate the legal consequences of contracting electronically. On the Internet, as we shall see, the most likely scenarios for forming contracts are via e-mail or in connection with a web page. Parties from different countries can form a contract over the Internet without even leaving their chairs. Messages, such as e-mail, travel over unknown links and may or may not reach their intended destinations. Applying the elements and principles of contract formation to electronic commerce requires an understanding of contract law and electronic transacting. This chapter posits that the traditional legal concepts of the law of contract may be challenged and questioned in the light of new developments in communication tools such as World Wide Web.

One of the most fundamental problems arising out of the use of electronic means of communication comes from uncertainty as to whether or not electronic transmissions satisfy the formal requirements of writing and signature. Electronic communication raises new questions about the effectiveness of the traditional law. Indeed, many areas of the law potentially have been impacted by the technological development. Nevertheless none is more essential to business transactions than the law of contract. This is due to the importance of contract law. Therefore, section 3.3 examines the potential impact of formal requirements on electronic contracts.

Section 3.4 analyses contract formation in the light of the Internet. This section considers only the first two principles of contract formation, namely ‘offer and acceptance’ and ‘communications’. The other principles will be discussed in the two following chapters. Within this section there will also be a subsection dealing with so-called cross