Consumer law for the info highway.

• Author: Bowal, Peter

"Very soon, all of us will be living in the electronic village hooked up to a huge computer, and we will be able to know what everybody else in the world thinks."

-- Francis August Schaeffer (1912-1984)

Introduction

As I write this, the "ILOVEYOU" Internet virus and at least four of its copycat variants have wormed their way through some 45 million business and personal computers and caused up to $20 billion in economic damage in only the last five days. Technology and its applications to business, which we call electronic commerce, is much hyped these days. We are almost made to feel old-fashioned if we buy or sell face-to-face through a bricks and mortar store, instead of double-clicking our way to contentment.

A few days of the love bug and we are quickly reminded of the limitations of technology as the new medium for doing business. The computer merely changes the way we interact. In doing so, some business processes are altered and the exchange of goods and services across traditional borders is expedited. Currently only about 3% of total commerce is conducted through online transactions, and most of that is business to business. It is expected that online transactions will comprise a small proportion of total consumer expenditures.

There are clearly some things that will never be bought and sold on a large scale by way of the Internet. These include groceries, furniture, homes and many services. We will want to inspect, feel, trust and negotiate. Despite the availability of custom fit jeans on the web, one still cannot try the jeans on before buying them. Novelty and convenience will rarely compensate for these interpersonal consumer preferences in the contracting process. Standardized low touch transactions like billing, banking and ordering CD's are conducted more efficiently online.

This article examines some of the legal issues inherent in consumers buying on the Internet.

Current Law Applies

Many people say that the Internet is a lawless frontier. People say that it cannot be regulated. It is true that early attempts to regulate the Internet as a broadcast medium were unsuccessful. There are numerous challenges to legislating Internet content and activities, if only because this phenomenon has burst onto the scene in a short time and it is borderless. The policy makers do not know how best to deal with the Internet from a regulatory perspective.

Yet, like other lawless frontiers such as the high seas, Antarctica, and space, as well as international business itself, one can expect that countries and international business organizations will eventually come together and agree on protocols and conventions that take shape as international law.

The law will always profoundly lag behind technology and commercial innovations. The law itself does not innovate, but reacts by regulating those who do. New activities, media and methods will be covered by the law already in force, to the extent that it can be made to fit. Therefore, the current contract, competition, advertising and tax laws will continue to apply to consumer transactions that take place on the Internet. The formative elements of a contract (offer, acceptance, consideration, etc.) and legal remedies have not changed by the new method of consumer transacting.

The Internet is not, after all, the first new technology invented for doing business. It was preceded by the telephone and fax machine. The courts, when called upon to decide a dispute, have long asked where the contract and the breach took place, whose law applies and what is the appropriate legal solution. When a business or consumer sued or was sued in a foreign jurisdiction, the law recognized the contract and foreign judgments so that damages could be recovered as ordered by a court.

Internet commerce does not change this legal framework. The only things that the e-commerce...