Business Law - Use of Contracts in E-Commerce - Assignment Example

? Business Law - Use of Contracts in E-commerce Table of Contents Introduction 3 Content 3 Incorporation 5 Trademark and Register 5 Intellectual Property 5 Copyright 6 Website 6 Protection of Consumer’s Privacy 7 Summary 7 References 9 Introduction The leading global organizations are trying to capitalize on the potential business opportunities which developed due to technological advancements in this present era of globalisation. Internet has become an important business tool that helps an organization or a business entity to maximize business output and profit. The global electronics market can be predicted based on the transaction cost theory. Use of Information Technology can result in a significant shift from the hierarchy structure to market structure. Business transaction costs can be reduced by low communication cost strategy. It can allow the organizations to focus on their core business activities (Lee, 1998, p.4). Moreover, organization can buy several external services through this cost reduction strategy. Frauds and opportunistic behaviour can take place in a strong long-term relationship between two different organizations. Supreme mutual trust can pose limited risk. Moreover, it will help the organizations to reduce their risk management costs. E-commerce involves synchronization between several organizations implementing effective communication technology. This synchronization can be attained in the form of a virtual enterprise or an electronic enterprise. Contracts play an important role in both these cases. In global electronic market, contracts are referred as the agreements on a particular business transaction. Contract can be considered as the collaboration agreement for a longer time period in a virtual enterprise. These cooperation agreements involve integrated business process. This integration can be attained in several ways but generally shared database and inter-organizational workflows are the major sources of this integrated business process. The study will discuss the use of several contracts in the e-commerce business. Content A contract can be defined as an agreement between several parties that is based on specific mutual commitments. One-sided commitment cannot be considered as a contract. Exchange of several goods and services between two or more than two parties can be termed as mutual commitment. In most general cases, one party provides services or goods and other party pays for those exchanged goods and services. Moreover, enforcement mechanism in places is highly essential in a contract. It ensures both identification and punishment of breaking a promise or commitment. As of now, every contract can be made through online in UK. Business transactions are generally divided into three successive phases, such as contract preparation, contract negotiation and contract fulfilment (Daskalopulu and Sergot, 1997, pp. 6-8). Contract preparation can be referred as the information phase. On the other hand, contract recognition can be referred as agreement phase. Contract fulfilment phase has limited negotiation activities. In this phase, several buyers select a specific product or service. It indicates that the buyers want to purchase that product or service. On the other hand, sellers deliver the product or services to the buyers after, before, or at the time of payment. This exchange process becomes more complicated in B2B process as the price of products or services may be not fixed. Moreover, the delivery process can become more difficult in several B2B processes as in International Trade. In these situations, the contracts are more elaborative in nature. These include several specifications in some fulfilment processes’ form (Chirku and Kauffman, 2000, pp.7-12). Moreover, these contracts help to indicate the disputes’ resolve process. Legal system is struggling due to rapid pace of e-commerce development. It is discussed earlier that mutual exchange of goods and services can be referred as contract. Written contract is the e-commerce legal tool. These contracts can provide the degree of certainty in rapidly changing arena of e-commerce. Before launching e-commerce venture, business owners or employers need to understand the importance of contracts. The employers or business owners should consider several key legal concerns in e-commerce ventures and contracts. Incorporation The organization needs to bring incorporation in their business process. The organization needs to make sure that the organization is a separate financial and legal entity from an individual. This incorporation will help to protect the owner in several regards (Poon and Swatman, 1999, p.21). Moreover, incorporation will help to promote the future goals of an organization. Trademark and Register According to the trademark act, the organization needs to ensure that the employees within the organization can identify significant sources of products and services. A symbol or design, word, phrase, or the combination of all of these can be referred as trademark. It identifies and differentiates the source of specific goals of organization from other companies (Angelov and Grefen, 2003, p.11). Service mark acts similar like trade mark. It identifies and distinguishes several significant sources of services. Service marks are utilized in the advertisings and promotional activities of services. Organizations need to implement this tool to protect and distinguish their source of source of services or products from other competitors. A “TM” product or service indicates that it is under the unregistered trademarks rights. On the other hand, “R” indicates a product’s or services’ registered mark. It will be illegal for an e-commerce venture to place “R” mark that does not have the national registration. Moreover, an organization cannot use the registered name or logo or symbol of other organization. Intellectual Property Owning intellectual property is important legal criteria for an e-commerce venture. For an example, if several components of a web site are produced by third party, then an employer or an owner of e-commerce venture will not be able to obtain the ownership. Considering this example, it can be stated that the developer of the website has total right and entity to retain the ownership of that webpage. Therefore, it is important for the employers to pay careful attention to several employment contracts and rights in order to maintain transparency in their business process. Copyright Copyright is an important legal aspect for the owners of e-commerce venture. The owners should copyright their sources of contents in order to protect their websites. Under copyright act, the owners have several exclusive rights. They can copy work. They can modify their own work and can develop derivative works. They can perform and display their works publicly through their websites. They can distribute their work to several end-sources. Organizations generally copyright their images, substantial texts, music, videos, audios, facts, and titles in order to protect their individuality. The e-commerce business owners need to buy or develop their own domains. Without having individual domains, an e-commerce venture cannot copyright their contents and several facts (Bryant, Colledge and Electron, 2002, p.13). Under copyright and protection law, an organization cannot use internet freely without having own public domain. Website The organizations need follow or develop a click wrap agreement for users. This agreement is the part of purchasing process. It gives the business owners of e-commerce ventures a legal remedy in order to ensure that the organization will be paid against their service or product delivery. Moreover, under the business law, the organizations need to imply legal warranty according to the agreement between two parties. Moreover, the web site needs to have legal permission, otherwise government have the authority to sue the owner of that e-commerce venture. Protection of Consumer’s Privacy It is true that global consumers are concerned about the privacy and protection of their personal facts and information. E-commerce business owners need to have private policies for their websites. Moreover, the owners need to integrate the private policies on their site. It is possible that, an individuals’ data or information may be lost or theft by the third party in partnering or co-branding agreements (Jones, Wilikenes, Morris and Masera, 2000, pp.9-11). Most importantly, the suppliers or the advertisers generally use traffic data in order to identify an individual potential customer. It can raise the threat of online data hacking. The organizations need to take care of the privacy of customers by securing domain and online transaction process. Summary Contracts can be used in both electronics markets and virtual organizations. There are several legal issues associated with e-commerce business that can affect the business performance. E-commerce involves harmonization between different organizations implementing valuable communication technology. In B2B business settings, several anti-trust laws can be applies in several types of exchange or auction sites maintained by the competitors within a specific industry. Several leading global organizations are implementing e-commerce in their business process in order to enhance their business performance and outputs. Effective e-commerce can provide significant customer satisfaction. Organizations can achieve huge competitive advantages from their e-commerce business activities. It reduces operational cost. Moreover, it helps to attract potential customers as it reduces the purchasing efforts of customers. There are several legal issues that can limit the business output or violate the organizational performance. The owners of e-commerce ventures need to maintain several key legal contracts in their e-commerce business to avoid various legal issues. The organizations need to incorporate their organizational future goals and objectives on their websites. Moreover, the organizations need to make sure that the logos or symbols are trademarked and registered in order to protect their intellectual assets. Moreover, the owners of e-commerce business ventures should copyright their sources of contents in order to protect their websites. Protecting and securing public information and data are important for an organization to avoid several legal and ethical issues. Violation of consumers’ protection and privacy can force the government and several recognized legal authorities to sue the business owners. References Angelov, S., and Grefen, P., 2003. The 4W Framework for B2B e-contracting. International Journal of networking and Virtual, 12(3), p.11. Bryant, A., Colledge, B., and Electron, J., 2002. Trust in Electronic Commerce Business Relationship. International Journal of Electronic Commerce, 14(3), pp.13. Chirku, A., and Kauffman, R., 2000. Reinter mediation Strategies in Business-to-Business Electronic Commerce. International Journal of Electronic Commerce, 4(4), pp.7-12. Daskalopulu, A., and Sergot, M., 1997. The Representation of Legal Contracts. AI and Society, 11(2), pp.6-8. Jones, S., Wilikens, M., Morris, P., and Masera, M., 2000. Trust Requirements in e-business. Communications of the ACM, 18(4), pp.9-11. Lee, R., 1998. Towards Open Electronic Contracting. International Journal of Electronic Markets, 3(1), p.4. Poon, S., and Swatman, P., 1999. An Exploratory study of Small business Internet Commerce Issues. Information & Management, 24(3), p.21. Read More