Chapter 7. Internet Law and Business

• Pages: 417-446

CHAPTER7

INTERNET LAW AND BUSINESS1

[T]he explosion of Electronic Commerce on the Internet [is] creating huge opportunities for busi-

nesses, governments, industries and entire countries to transform themselves. At the same time,

these developments have resulted in new threats – the same businesses, governments, industries

and countries now face the risk of being marginalised if they do not respond to the changes taking

place around them.... the pace with which developments take place in the new networked world

means that even if the right actions are identified and execution begun, those who move too slowly

will be overtaken by others who can make the commitment to move at Internet speed.2

This statement was issued 16years ago but remains true as the use and evolution of the internet

continue to grow by leaps and bounds. Highlighted here is the speed with which technological

Reproduced with the permission of Stu’sViews

1 All the cases in this chapter are drawn from various US jurisdictions. While the geographical focus of this

book remains the Commonwealth Caribbean, the authors have found that the law relating to the internet is

very well developed in the United States and took the decision to use US case law here. It should be noted

that the European Union also has its own laws dealing with the internet, but they are considerably dierent

in approach to the ones that apply in the United States. On EU law concerning the internet, see Rustad,

M, Global Internet Law in a Nutshell, 2013, St Paul, MN: West. It should further be noted that this chapter is

certainly not exhaustive on the topic of internet law, but is meant to be introductory.

2 Report of the National Electronic Commerce Policy Committee, ‘Preparing Trinidad and Tobago for Doing

Business in the Internetworked Global Digital Economy’, 1999, Port of Spain: Government of Trinidad

and Tobago, p 6, [accessed 9 January2015]. Available at: http://unpan1.un.org/intradoc/groups/public/

documents/caricad/unpan008535.pdf.

418 Commonwealth Caribbean BusinessLaw

3 US Census Bureau, Department of Commerce, ‘Quarterly Retail E-Commerce Sales, 3rd Quarter 2014’,

9 January2015. Available at: http://www.census.gov/.

4 UK Oce for National Statistics [online], ‘E-Commerce and ICT Activity 2013’, 28 November2014,

[accessed 9 January2015]. Available at: http://www.ons.gov.uk/.

5 Kunkel, RG [online], ‘Recent Developments in Shrinkwrap, Clickwrap and Browsewrap Licenses in the

United States’, (2002) Murdoch University Electronic Journal of Law 9(3). Available at: http://www.murdoch.edu.

au/elaw/issues/v9n3/kunkel93.html.

6 See Frieden, J [online], ‘FAQ: Is an Internet Contract Enforceable?’, E-Commerce Law, posted 11 May2009,

[accessed 9 January2015]. Available at: http://ecommercelaw.typepad.com/ecommerce_law/2009/05/

faq-is-an-internet-contract-enforceable.html#more.

7 Craig, B, Cyberlaw: The Law of the Internet and Information Technology, 2013, Pearson Education Inc., p.72. There

are other pieces of legislation that address the same matter aswell.

8 See United Nations General Assembly Resolution, A/RES/60/21, 9 December2005. The adoption rate

has been, admittedly, poor; the Convention has only 18 signatories and six parties since its entry into force on

1 March2013. See United Nations Commission on Inter national Trade Law [online], ‘Status: United

Nations Convention on the Use of Electronic Communications in International Contracts (New York,

2005)’, 2015, [accessed 9 January2015]. Available at: http://www.uncitral.org/uncitral/en/uncitral_texts/

electronic_commerce/2005Convention_status.html.

developments take place and the fact that e-commerce has become an integral part of general

commerce. To support this, e-commerce sales in the United States over the last four quarters

(3rd Qtr 2014–4th Qtr 2013) amounted to some US$294bn, representing a total of 6.3 per

cent of total retail sales for the same period.3 In the United Kingdom, figures for 2013 indicate

that internet sales by UK businesses amounted to £557bn, reflecting a total of 20 per cent of

total business turnover for the United Kingdom.4

Such figures indicate a definite shift in the way global commerce occursand:

is forcing the legal infrastructure of commerce to change in order to keep up with technology.

Around the world nations are building the legal infrastructure to succeed in the global digital econ-

omy. Worldwide, revisions in laws regarding online privacy, electronic contracting, digital signa-

tures, and consumer protection have been enacted in order to provide the essential ‘e-confidence’

needed for electronic commerce to prosper.5

The increasing use of the internet to conduct trade, communicate and find information

illustrates its growing popularity, but this use has brought with it inherent legal diculties. Con-

tracting over the internet and issues arising out of online contracts, such as jurisdiction, choice

of forum, choice of law and taxation, are important in understanding the evolution of internet

law as it relates to business activities.

CONTRACTING IN THE DIGITAL MARKETPLACE

Conducting commercial transactions online has become commonplace; this is certainly evi-

denced by the high level of commercial activity taking place online, as noted above. One of the

early issues that arose was that of contract formation. It has since been agreed that the enforce-

ability of internet contracts is governed by the well-established legal principles which apply to

traditional written contracts.6 As with traditional contracts, to form an enforceable contract

online, there must be a ‘meeting of the minds’ of the parties to the contract and an intention to

contract, supported by some consideration.

Nonetheless, the issue of the signature created some diculty such that the US Congress

passed the Electronic Signatures in Global and National Commerce Act (E-SIGN Act) in 2000.7

Globally, so problematic became the issue of online contracting that the United Nations adopted

a Convention on the Use of Electronic Communications in International Contracts8 which