management & legal implications of ecommerce the law of torts negligence vicarious liability

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

The Law of Torts

Negligence

Vicarious Liability


Vicarious Liability Definition

The law holds a person liable for the wrongs of another even though the person has personally done no wrong

Examples Employer\Employee


Vicarious Liability (cont.) Rationale

EconomicThe employer is usually insured

SafetyProvides an incentive for employers to choose staff carefully and provide training

PolicyEmployers profit from their enterprise and therefore should be responsible for any loss it causes


Vicarious Liability (cont.) Indemnities

A contract can contain a clause requiring the employee to indemnify the employer

Some jurisdictions have abolished this right (e.g. s27C Wrongs Act (SA))

Employee is usually covered by employer’s insurance and insurer cannot recover against him (s66 Insurance Contracts Act)


Vicarious Liability (cont.) Requirements

Commission of a tort Not contract or other legal liabilities

By an employee A Principal is not liable for acts of an

Independent Contractor Acting in the course of his employment

What was the employee employed to do. Employer will be liable for acts in that area or incidental to it or if the employer otherwise authorised the wrongful act.


Vicarious Liability (cont.)Who is an Independent Contractor? Control test

Does the employer have the right to exercise control over what the employee does and how he does it?

Employer need only have power to control the employee’s work to the extent to which there is scope for such control


Vicarious Liability (cont.) Control test (cont.)

Factors Can the employer tell the employee

what to do, how to do it, when to do it etc.?

Does the employer have the power of dismissal

Does the employer provide equipment Does the employer pay holiday pay, sick

leave, workers compensation?



Integration testHow closely has the employee been integrated into the employer’s business



Multi-factor testA worker is likely to be an independent contractor and not an employee if he: Owns and maintains his own equipment Is paid by results Takes the chance of profit\loss Has the right to delegate work Has the right to work for others Is not entitle to sick pay, workers compensation, sick

leave or superannuation Does not have PAYE tax installments deducted


Vicarious Liability (cont.) Acting in the course of his employment

Wide meaning Employer is liable even when the employee does

something that is not part of his job Century Insurance Co Ltd v Northern Ireland

Road Transport Board [1942] AC 509 (P p417) Employer is liable even when the employee

commits an intentional or illegal act Poland v John Parr & Sons [1927] 1 KB 236 (P

p418) Lloyd v Grace, Smith & Co [1912] AC 716 (P

p417)


Corporate Internet Policy


Need Alignment with business strategy Protection of a valuable asset Networks produce a ripple effect


Definition Hardware Software Data Network


Ownership Overall control Control of sub-systems

New Systems implementation


Software Licensing Supported environments Auditing Software development

methodologies standards


Data Ownership Control Validation Authoritative sources Copying and transfer Archiving


Web Pages Consistency of layout Consistency of design Accessibility (W3C) Use of graphics Navigation Links


Web Pages (cont.) Proprietary information Disclaimers Terms and conditions Privacy statement Copyright notice


Security Storage

Firewalls Access Permissions Encryption


Security (cont.) Anti-viral measures

software installation updating

filtering attachments


Security (cont.) Intrusion monitoring and response Logging Backups Auditing Remote Access


Employee Usage Personal and\or business Subverting systems Permitted software Reporting of breaches Password protection Monitoring Privacy


Employee Usage (cont.) Vilification and Harassment

Inclusive language

Race Religion Ethnicity Gender Sexuality

Marital status Pregnancy Age Disabilities


Employee Usage (cont.) Emails

When to use How to use

Flaming

Archiving Format of attachments Privacy & Monitoring Mail lists


Employee Usage (cont.) Compliance with Federal & State law Penalties


Dissemination Publication New employee inductions Training Signed acknowledgement


Consumer Protection

Forder & Quirk Chapter 10


Trade Practices Act Prohibits

Misleading & Deceptive Conduct Unconscionable Conduct

Implies Terms Creates

Civil Remedies Criminal Penalties

Applies to Trading & Financial Corporations Use of Telegraphic Service (i.e. Internet)


Identifying Businesses Necessary to

Create Trust Provide details of whom to claim against

Business Names Acts If you trade under a name other than your

own you must register it. Must register in each state in which business

trades


Identifying Businesses (cont.) Corporations Law

Covers the whole of Australia Provides an on-line database Must state ACN on

Invoices Receipts Agreements Other essential documents


Identifying Businesses (cont.) Trade Marks

Registering business name or company name gives no intellectual property rights

Trade marks are nation based Infringement of intellectual property rights can

be misleading & deceptive conduct contrary to TPA


Identifying Businesses (cont.) Spoofing

Impersonation of reputable business Uses

Web site with similar name; or Email with embedded link

Relies on “human engineering” Difficult to authenticate site


Information on Goods & Services Misleading Advertising

Even if goods & services are free Expired information

Mere puffery Bait Advertising

Must be able to supply goods at stated price for a reasonable period


Information on Goods & Services Pyramid Schemes Pump and Dump Schemes Health Products


Transactions Form requirements

Language Currency

Use of $ symbol may be misleading

Taxes Licensing


Transactions (cont.) Implied Terms

Goods Merchantable quality Reasonable fit for purpose

Services Supplied with due care and skill Reasonably fir for purpose

Terms implied by TPA may not be excluded May be limited for goods not ordinarily acquired for

personal, domestic or household use


Transnational Contracts Governing Law

Jurisdiction clauses May be ignored as an attempt to oust

jurisdiction of local courts Alternative Dispute Resolution (ADR) clauses Conflict with local laws

TPA will apply if any part of transaction or pre-contractual negotiations occurs in Australia


Transnational Contracts (cont.) Uniform Computer Information Transactions Act

Actively promoted by Business Software Alliance

Enacted in some US States Actively promoted by Business Software

Alliance Enacted in some US States Aust Courts may refuse to uphold it for

Australian sales because of conflict with TPA Severe attack on Open Source Software


UCITA Consumer

must travel to developers jurisdiction to commence litigation

surrender rights to content made with software

must delete software if don’t agree to licence changes that developers can impose at any time


UCITA (cont.) Developers can

monitor consumers computer use Internet to switch off software on user’s

computer prevent users from publicising flaws in

software avoid liability for bugs

Prohibits reverse engineering (conflicts with Aust Copyright Act


Hague Convention Covers private international commercial litigation

Specifies which countries laws applies Specifies which countries courts have

jurisdiction Provides for registration of foreign judgments

US opposes it Prefers privately-run ADR


European Union Distance Sales Directive

Allows consumers to withdraw from consumer contracts within 7 days

Would apply to any sale to a EU consumer Only 10 of 17 European nations have enacted

it.


European Union (cont.) Distance Sales Directive (cont.)

Suppliers must Identify themselves and provide an address Inform consumer of right of withdrawal Provide information regarding characteristics;

price; delivery; payment method; after-sales services and warranties; duration of contract; period of offer; right of termination (if > 1 year)

Fulfil order within 30 days


Trans-national Consumer Protection Industry Codes of Practice Netiquette Best Practice


Self Help Identification Description Cost & Currency Applicable Law Privacy Payment Mechanism Delivery Refunds & Warranties Complaints & Dispute Resolution Print out Details

management & legal implications of ecommerce the law of torts negligence vicarious liability

Documents

control slide

control test

legal liabilities

employers business slide

p p417 employer

s27c wrongs act sa employee

employers insurance

integration test