Transcript Presentation 3

Legal Audits for E-Commerce
Copyright (c) 2000 Montana Law
Review
Montana Law Review
Winter, 2000
61 Mont. L. Rev. 77
by Richard C. Bulman, Jr., Esq. and
Jorge R. Gutierrez, Esq.
Summary
• Review of the legal issues that E-commerce
raises is an important step businesses can
take to limit liability and protect their
interests.
• Due process reviews have as much value to
e-business as they do for more traditional
business functions.
• Software - usually software is rented but
when software is customized there are
issues about the commercial platform
products by Microsoft or Lotus that the
software runs on.
• Web site developer agreements typically
address features to be incorporated into the
web pages, data collection process, progress
payments, warranties,
• Hardware - if purchased the sales agreement
will address delivery and set up, technical
services and maintenance services and fees
for various items.
• If space on an ISP’s server is rented the
agreement with the ISP will need to be
reviewed.
• ACCESS - Hosted site, items in agreements
response time, space requirement, cost scalability,
remedies for - down time, lost data, warranties
against viruses and downtime.
• Security - communication with customers and
third parties like credit card companies needs to be
protected. Agreements with the service provider
to provide security needs to be scrutinized because
integrity of a site and its data is critical.
• Maintenance - to avoid downtime service
contracts for the various components need
to be coordinated. To avoid lost time during
finger pointing of who’s fault is it stage a
maintenance service contract might be
advisable. Service agreements need to
address urgency, how support will be
provided (onsite - remotely)
• Information - gathering info is one key
benefit of having a web site agreements for
third party should include off site storage,
backup, security, and security of data and
access controls
• Integration - the ability to collect and
harness information in the business process
to make purchasing, marketing and other
business decisions.
• Agreements with each provider of a piece of
the system need to cover who will solve any
problem that arises.
• Business interruption insurance can be
valuable to cover the risk of loss of
operations.
Web Site Issues
• Copyright - Who owns work product when
a person is hired to create a web site. This
needs to be spelled out in contracts
• Licenses - media that can be presented
through a web site can have licensing issues
if it requires proprietary, song clips are a
clear example. Any license issue related to
a web site that can be identified should be
addressed via agreement or license.
• Patents - now that a patent has been issued
for an algorithm there has been a rush to
patent new ways of doing business.
Disclosures
• Terms and Conditions of Use - content
ownership, right to edit, passwords, contest
rules, email storage, security, limits on
liability,
• Privacy - What data is required and what is
voluntary to use site, how data will be used,
whether it will/can be sold, what limits can
be placed on the conveyance of data and
any retroactive steps offered to have data
removed from a database.
• Domain Names - need to be reviewed along
with Trademarks to ensure that rights are
protected and site does not infringe
• Advertisement - traditional contracts - what
services will be provided, what costs who
owns rights and licenses
• Online Advertisement - cost, size,
placement, location, use of cookies,
frequency
• Linking/Framing - agreements cover issues
like the use of intellectual property,
placement of links, consideration for the use
• Affiliate Programs - show products
available for sale on your site but direct
consumer to vendor’s site to make purchase.
Terms - commission, tracking, reporting,
payments, termination, indemnification.
• B2B - standing agreements
• Click here to Accept - this form of
establishing terms has yet to be sorted out
legally.
• B2C - US courts seem to accept site terms if
dealing with other countries should learn
whether special protections or requirements
are extended by their laws.
• Capturing data on the location of customers
can help with this effort
• Payment - upfront fees by credit card
companies can be costly especially in the
event of rejected or canceled transactions
review of terms and related to currency
fluctuations can help
• Agreements with trusted delivery service
can aid in handling problems caused by
fraud artists.
Emerging Areas
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Regulating data collected from children
Disclosures - truthful, ethical, meaningful
Standardization - EU and UNCITRAL
Taxation - It might be coming - investigate
jurisdiction without taxes.