Business Law for the Entrepreneur
and Manager
Chapter 10 – Internet Law
Frank Cavico and Bahaudin G. Mujtaba
© Cavico & Mujtaba, 2008
Chapter Topics
• On-line Contracts
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Uniform Electronic Transaction Act
Uniform Computer Information Transaction Act
Electronic Signature in Global and National Commerce Act
Conclusion
• Internet Privacy – The Electronic Communications
Privacy Act
• Internet Domain Names – The Anticybersquatting
Consumer Protection Act
– Summary
© Cavico & Mujtaba, 2008
Internet Regulation
On-line Contracts
• The legal system in the United States has
promulgated three very important statutes
governing e-contracts:
– The Uniform Electronic Transactions Act
(UETA)
– The Uniform Computer Information
Transactions Act (UCITA)
– The federal Electronic Signature in Global and
National Commerce Act
© Cavico & Mujtaba, 2008
Uniform Electronic Transaction Act
• The objective of the Uniform Electronic Transaction Act
(UETA) is to place electronic records and signatures on the
same level as paper contracts and written signatures
• UETA applies only to those transactions between parties or
entities which have agreed to conduct their business
transactions by electronic means
• There are two major components of UETA:
– First, an electronic record will satisfy the writing requirement of
the Statute of Frauds
– Second, an electronic signature is equal to a written signature on a
paper contract
• UETA maintains that an electronic signature will have the
same effect as a notarized signature if the signature
includes all the standard information as required in an oath
© Cavico & Mujtaba, 2008
Uniform Computer Information
Transaction Act
• UCITA is a model act that establishes a uniform and extensive set of
rules that govern computer information transactions
• computer information transaction is broadly defined as an agreement to
create, transfer, or license computer information or information rights
• There are several UCITA provisions that have relevance to e-contracts:
• First, if an offer is in an electronic form, the contract is formed when
the electronic acceptance is received
• Second, counteroffers are not effective against electronic offerors
• Third, a consumer is not bound by a unilateral electronic error if: 1)
there is prompt notification of the error; 2) the consumer has not used
or benefited from the information; 3) the consumer delivers all copies
of information, or destroys the information at the request of the other
party; and 4) the consumer pays all costs for shipping, reshipping, and
processing
© Cavico & Mujtaba, 2008
Electronic Signature in Global and
National Commerce Act
• The United States federal law that made electronic signatures
equally as valid as written signatures is called the Electronic
Signature in Global and National Commerce Act, which also
is known as the “E-Sign” law
• The E-Sign law was not only an effort to legalize electronic
signatures but also an attempt to standardize the various state
laws
• Another goal of the statute was to place electronic contracts
on the same equal footing as paper contracts
• The federal statute preempts state laws, except if a state has
enacted the e-signature provisions of UETA, in which case
the state is exempt from the federal statute
© Cavico & Mujtaba, 2008
Conclusion
• To secure evidence of the e-contract, one simple and
straightforward solution is to print out all pertinent email
communications as well as all “electronic” prior
negotiations.
• An e-contract need not have a personal signature to be
valid and enforceable; rather, it is now acceptable for an
electronic signature to be legally sufficient
• One engaging in Internet contracts globally is well advised
to be aware of the laws of other countries, or the lack
thereof, regarding on-line contracts specifically as well as
Internet commerce generally
© Cavico & Mujtaba, 2008
Internet Privacy – The Electronic
Communications Privacy Act
• The Electronic Communications Privacy Act (ECPA) is a federal
statute enacted by the U.S. Congress in 1986 that makes it a crime to
intercept an electronic communication at the point of transmission, in
transit, when stored by a server, or after receipt by the intended
recipient
• The statute also makes it illegal to access stored email. In addition to
criminal penalties, the statute allows an aggrieved party to sue the
interceptor for civil damages. There are, however, two important
exceptions whereby stored electronic email communication can be
accessed without violating the law:1) access is permitted by a party or
entity which in fact provided the electronic communication service,
and 2) government and law enforcement entities and personnel can
access stored communications when investigating suspected illegal
activities
© Cavico & Mujtaba, 2008
Internet Domain Names – The
Anticybersquatting Consumer
Protection Act
• In 1999, the United States Congress enacted the Anticybersquatting
Consumer Protection Act in order to protect Internet domain names
• “Cybersquatting” is the term used to describe unfair uses of domain
names by private organizations that maintain databases of domain
names. This results when a person or business registers a domain name
that is the same or very similar to another’s domain name or trademark
or even a “famous” person’s name
• The federal statute now makes this practice illegal if the domain name
is identical to or confusingly similar to the name of another and there is
evidence of bad faith intent
• a private entity, under contract with the U.S. government, called the
Internet Corporation for Assigned Names and Numbers (ICANN), now
is primarily responsible for regulating the issuance of domain names
on the Internet
© Cavico & Mujtaba, 2008
Summary
• Internet regulation is a very pertinent issue in today’s
global marketplace; and therefore this chapter has looked
at the essential legal systems that govern computer
transactions and the Internet. These statutes include the
Uniform Electronic Transaction Act (UETA), Uniform
Computer Information Transaction Act (UCITA) and the
Electronic Signature in Global and National Commerce
Act. Internet privacy and Internet Domain is also
discussed with regards to the acts that they are regulated
by, which are the Electronic Communications Privacy Act
(ECPA) and the Anticybersquatting Consumer Protection
Act. This chapter also examined the validity of e-contracts
nationally as well as globally.
© Cavico & Mujtaba, 2008
Reference
1.
2.
Cavico, F. & Mujtaba, B. G., (2008). Business Law for the Entrepreneur
and Manager. ILEAD Academy Publications; Davie, Florida, USA. ISBN:
978-0-9774-2115-2.
Cavico, F. and Mujtaba, B. G. (2008). Legal Challenges for the Global
Manager and Entrepreneur. Kendal Hunt Publishing; United States.
© Cavico & Mujtaba, 2008