Expert answer:International Widgets Code of Ethics
Answer & Explanation:The human resources department worked with management to carefully craft
a Code of Ethics. All employees received a copy
of the code and were required to sign off stating
that they had read the code and agreed to abide by its conditions. If an
issue concerning an employee occurs, the human
resources department investigates. As the assistant director of human
resources,
you are asked to evaluate an employee’s behavior.
You meet with Gloria Smithson to obtain all information needed to begin
your investigation. International Widgets Code of EthicsConfidentialityInternational
Widgets is committed to maintaining the highest degree of integrity in
all our dealings with potential, current, and past clients, both in
terms of normal commercial confidentiality and the protection of all
personal information received in the course of providing the business
services concerned. We extend the same standards to all our customers,
suppliers, and associates.EthicsWe conduct business
honestly and honorably and expect our clients and suppliers to do the
same. We train our employees to be ethical and expect them to always act
in the best interests of International Widgets.Duty of CareOur
actions and advice will always conform to relevant law and we believe
that all businesses, including International Widgets, should avoid
causing any adverse effect on the human rights of people in the
organizations we deal with, the local and wider environments, and the
well-being of society at large.Conflict of InterestEmployees
of International Widgets must act exclusively for the benefit of
International Widgets. Employees should avoid providing services to a
direct competitor of International Widgets, or engage in any type of
business relationship that is not in the best interests of International
Widgets.Our contract will usually be in the form of a detailed
proposal, including aims, activities, costs, timescales, and
deliverables. The quality of our service and the value of our support
provide the only true basis for continuity. We always try to meet our
clients’ contractual requirements, particularly for situations where an
external funding provider requires more official parameters and
controls.Intellectual Property and Moral RightsWe retain
the moral rights in, and ownership of, all intellectual property that
we create unless agreed otherwise in advance with our clients. In
return, we respect the moral and intellectual copyright vested in our
clients’ intellectual property. Employees are not to use the
intellectual property of International Widgets for any means other than
the terms and conditions of their employment and to advance the
interests of International Widgets.Quality AssuranceWe
maintain the quality of what we do through constant ongoing review with
our clients, of all aims, activities, outcomes, and the
cost-effectiveness of every activity. We encourage regular review
meetings and provide regular progress reports. This consultancy has been
accredited under a number of quality assurance schemes. Further details
are available on request.Professional ConductWe conduct
all of our activities professionally and with integrity. We take great
care to be completely objective in our judgment and any recommendations
that we give, so that issues are never influenced by anything other than
the best and proper interests of our clients.Equality and DiscriminationWe
always strive to be fair and objective in our advice and actions and we
are never influenced in our decisions, actions, or recommendations by
issues of gender, race, creed, color, age, or personal disability.AssignmentYou
are the assistant director of human resources. Janice Marshall has
asked you to review the Code of Ethics to determine if John has violated
its provisions. You are to prepare a paper that addresses the
following.Evaluate International Widgets’ Code of Ethics at
the conclusion of the You Decide scenario. Are there any provisions
which would prohibit John’s behavior? Please explain.In
addition to a possible ethics violation, are there other legal avenues
that International Widgets could pursue against John or its competitor? Is John in a fiduciary relationship with
International Widgets? Why or why not? Is he an agent of International
Widgets? Identify the duties and responsibilities of an agent and
whether or not John is fulfilling those obligations. What action should Gloria take involving John?Assignment requirements:When
preparing your responses, please use the facts provided in the You
DecideYour
paper should be four to five pages long, exclusive of the cover page
and references page, and double-spaced. It should comply with APA 6th
edition formatting.Cover pageReferences page12-point, Times New Roman fontTEXTBOOK READING15.docx41 INTERNATIONAL AND WORLD TRADE LAW.docx
15.docx
41_international_and_world_trade_law.docx
Unformatted Attachment Preview
15 DIGITAL LAW AND E-COMMERCE
Digital Law and E-Commerce
The development of the Internet and electronic commerce has required courts to apply existing law to
online commerce transactions and e-contracts and spurred the U.S. Congress and state legislatures to
enact new laws that govern the formation and enforcement of e-contracts.
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Describe the laws that apply to email contracts, e-commerce, and Web contracts.
2. Describe e-licensing and software law.
3. Describe the provisions of the federal Electronic Signatures in Global and National Commerce Act
(E-Sign Act)
4. Describe laws that protect privacy in cyberspace.
5. Define Internet domain names and describe how domain names are registered and protected.
CHAPTER OUTLINE
INTRODUCTION TO DIGITAL LAW AND E-COMMERCE
INTERNET
EMAIL CONTRACTS Digital Law · Regulation of Email Spam Case 15.1 · Facebook, Inc. v. Porembski
E-COMMERCE AND WEB CONTRACTS Case 15.2 · Hubbert v. Dell Corporation Digital Law · E-SIGN Act:
Statute of Frauds and Electronic Contracts Digital Law · E-SIGN Act: E-Signatures and Electronic Contracts
E-LICENSING OF SOFTWARE AND INFORMATION RIGHTS Digital Law · Uniform Computer Information
Transactions Act (UCITA)
PRIVACY IN CYBERSPACE
DOMAIN NAMES Digital Law · New Top-Level Domain Names Digital Law · Anticybersquatting
Consumer Protection Act Case 15.3 · New York Yankees Partnership d/b/a The New York Yankees
Baseball Club Global Law · Internet in Foreign Countries
“Through the use of chat rooms, any person with a phone line can become a town crier with a voice that
resonates farther than it could from any soapbox. Through the use of Web pages, mail exploders, and
newsgroups, the same individual can become a pamphleteer.”
Stevens, Justice
Reno v. American Civil Liberties Union, 521 U.S. 844 (1997)
INTRODUCTION TO DIGITAL LAW AND E-COMMERCE
The use of the Internet and the World Wide Web and the sale of goods and services through electronic
commerce, or e-commerce, have exploded. Large and small businesses sell goods and services over the
Internet through websites and registered domain names. Consumers and businesses can purchase
almost any good or service they want over the Internet, using such sites as Amazon.com, eBay, and
others. Businesses and individuals may register domain names to use on the Internet. Anyone who
infringes on these rights may be stopped from doing so and is liable for damages.
electronic commerce (e-commerce)
The sale of goods and services by computer over the Internet.
In addition, software and information may be licensed either by physically purchasing the software or
information and installing it on a computer or by merely downloading the software or information
directly into a computer.
Many legal scholars and lawyers argued that traditional rules of contract law do not adequately meet
the needs of Internet transactions and software and information licensing. These concerns led to an
effort to create new contract law for electronic transactions. After much debate, the National
Conference of Commissioners on Uniform State Laws developed the Uniform Computer Information
Transactions Act (UCITA). This model act provides uniform and comprehensive rules for contracts
involving computer information transactions and software and information licenses.
The federal government has also enacted many federal statutes that regulate the Internet and ecommerce. Federal law has been passed that regulates the Internet and protects personal rights while
using the Internet.
The ‘Net is a waste of time, and that’s exactly what’s right about it.
William Gibson
This chapter covers Internet law, domain names, e-commerce, e-contracts, licensing of software, and
other laws that regulate the Internet and e-commerce.
INTERNET
The Internet is a collection of millions of computers that provide a network of electronic connections
between the computers. Hundreds of millions of computers are connected to the Internet. The
Internet’s evolution helped usher in the Information Age. Individuals and businesses use the Internet for
communication of information and data.
Internet
A collection of millions of computers that provide a network of electronic connections between the
computers.
World Wide Web
The World Wide Web, also called the Web, consists of millions of computers that support a standard set
of rules for the exchange of information called Hypertext Transfer Protocol (HTTP). Web-based
documents are formatted using common coding languages. Businesses and individuals can access the
Web by registering with a service provider.
World Wide Web (Web)
An electronic connection of millions of computers that support a standard set of rules for the exchange
of information.
Individuals and businesses can have their own websites. A website is composed of electronic documents
known as web pages. Websites and web pages are stored on servers throughout the world, which are
operated by Internet service providers (ISPs). They are viewed by using web-browsing software such as
Microsoft Internet Explorer. Each website has a unique online address.
The Web has made it extremely attractive to conduct commercial activities online. Companies such as
Amazon.com and eBay are e-commerce powerhouses that sell all sorts of goods and services. Existing
brick-and-mortar companies, such as Wal-Mart, Merrill Lynch, and Dell Computers, sell their goods and
services online as well. E-commerce over the Web will continue to grow dramatically each year.
EMAIL CONTRACTS
Electronic mail, or email, is one of the most widely used applications for communication over the
Internet. Using email, individuals around the world can instantaneously communicate in electronic
writing with one another. Each person can have an email address that identifies him or her by a unique
address. Email is replacing telephone and paper communication between individuals and businesses.
electronic mail (email)
Electronic written communication between individuals using computers connected to the Internet.
Many contracts are now completed by using email. These are referred to as electronic mail contracts, or
email contracts. Email contracts are enforceable as long as they meet the requirements necessary to
form a traditional contract. This includes agreement, consideration, capacity, and lawful object.
Traditional challenges to the enforcement of a contract, such as fraud, duress, intoxication, insanity, and
other defenses may be asserted against the enforcement of an email contract. Email contracts usually
meet the requirements of the Statute of Frauds that requires certain contracts to be in writing, such as
contracts of the sale of real estate, contracts for the sale of goods that cost $500 or more, and other
contracts listed in the relevant Statute of Frauds.
electronic mail contract (email contract)
A contract that is entered into by the parties by use of email.
Often, the use of email communication is somewhat informal. In addition, an email contract may not
have the formality of drafting a paper contract that includes the final terms and conditions of the
parties’ agreement. The terms of the parties’ agreement may have to be gleaned from several emails
that have been communicated between the parties. In such a case, the court can integrate several
emails in order to determine the terms of the parties’ agreement.
The following feature discusses a federal law that regulates spam email.
DIGITAL LAW Regulation of Email Spam
Americans are being bombarded in their email accounts by spam—unsolicited commercial advertising.
Spammers try to sell people literally anything. Spam accounts for approximately three-quarters of all
business email traffic. In addition, many spam messages are fraudulent and deceptive, including
misleading subject lines. It takes time and money to sort through, review, and discard unwanted spam.
In 2003, Congress enacted the federal Controlling the Assault of Non-Solicited Pornography and
Marketing Act (CAN-SPAM Act).1 The act (1) prohibits spammers from using falsified headers in email
messages, including the originating domain name and email address; (2) prohibits deceptive subject
lines that mislead a recipient about the contents or subject matter of the message; and (3) requires that
recipients of spam be given the opportunity to opt out and not have the spammer send email to the
recipient’s address. The Federal Trade Commission (FTC), a federal administrative agency, is empowered
to enforce the CAN-SPAM Act.
Controlling the Assault of Non-Solicited Pornography and Marketing Act (CANSPAM Act)
A federal statute that places certain restrictions on persons and businesses that send unsolicited
commercial advertising (spam) to email accounts, prohibits falsified headers, prohibits deceptive subject
lines, and requires spammers to label sexually oriented email as such.
The act also requires spammers who send sexually oriented email to properly label it as such. The FTC
has adopted a rule that requires that sexually explicit spam email contain a warning on the subject line
reading “SEXUALLY EXPLICIT.” The FTC rule also prohibits the messages themselves from containing
graphic material. The graphic material can appear only after the recipient has opened the email
message.
In effect, the CAN-SPAM Act does not end spam but instead approves businesses to use spam as long as
they do not lie. The act provides a civil right of action to Internet access services who have suffered
losses because of spam. The act does not, however, provide a civil right of action to individuals who
have received unsolicited spam. The CAN-SPAM Act does not regulate spam sent internationally to
Americans from other countries. In essence, the CAN-SPAM Act is very weak in helping consumers ward
off the spam that deluges them daily.
In the following case, the court was presented with an issue involving spam.
CASE 15.1 FEDERAL COURT CASE Email Spam Facebook, Inc. v. Porembski
Web 2011 U.S. Dist. Lexis 9668 (2011)
United States District Court for the Northern District of California
“The record demonstrates that defendants willfully and knowingly violated the statutes in question by
engaging in the circumvention of Facebook’s security measures.”
—Fogel, District Judge
Facts
Facebook, Inc. owns and operates the social networking website located at http://www.facebook.com.
Facebook users must register with the website and agree to Facebook’s Statement of Rights and
Responsibilities (SRR). Facebook maintains strict policies against spam or any other form of unsolicited
advertising by users. Facebook filed a lawsuit in U.S. district court against Philip Porembski and PP Web
Services, LLC, which was controlled by Porembski. Facebook alleged that Porembski registered as a
Facebook user and was bound by the SRR. Porembski created PP Web Services LLC and was the sole
person to act on its behalf. Through fraudulent misrepresentations, Porembski obtained more than
116,000 Facebook users’ account information. PP Web Services then sent more than 7.2 million spam
messages to these Facebook users. Facebook alleged that the defendants’ spamming activities violated
the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM Act).
Facebook sought damages and a permanent injunction against the defendants.
Issue
Did the defendants violate the CAN-SPAM Act?
Language of the Court
The record demonstrates that defendants willfully and knowingly violated the statutes in question by
engaging in the circumvention of Facebook’s security measures. The court will award statutory damages
of $50.00 per violation of the CAN-SPAM Act, for a total award of $360,000,000 under that Act. It is
appropriate that defendants be permanently enjoined from accessing and abusing Facebook services.
Facebook’s request for permanent injunctive relief is granted.
Decision
The U.S. district court held that the defendants had violated the CAN-SPAM Act, awarded Facebook
$360,000,000 in damages, and issued a permanent injunction against the defendants.
Ethics Questions
Did Porembski act ethically in this case? Will Facebook recover its awarded damages?
Internet Service Provider (ISP)
Internet service providers (ISPs) are companies that provide consumers and businesses with access to
the Internet. ISPs provide email accounts to users, Internet access, and storage on the Internet. ISPs
offer a variety of access devices and services, including dial-up, cable, DSL, broadband wireless,
Ethernet, satellite Internet access, and other services to connect users to the Internet. There are also
web-hosting services that allow users to create their own websites and provide storage space for
website users.
A provision in the federal Communications Decency Act of 1996 provides: “No provider or user of an
interactive computer service shall be treated as the publisher or speaker of any information provided by
another information content provider.”2 Thus, ISPs are not liable for the content transmitted over their
networks by email users and websites.
Communications Decency Act
A federal statute that provides that Internet service providers are not liable for the content transmitted
over their networks by email users and websites.
E-COMMERCE AND WEB CONTRACTS
The Internet and electronic contracts, also called e-contracts, have increased as means of conducting
personal and commercial business. Internet sellers, lessors, and licensors use web addresses to sell and
lease goods and services and license software and other intellectual property. Websites such as
www.amazon.com, www.dell.com, and www.microsoft.com use the Internet extensively to sell, lease,
or license goods, services, and intellectual property. Assuming that all the elements to establish a
traditional contract are present, a Web contract is valid and enforceable.
Web contract
A contract that is entered into by purchasing, leasing, or licensing goods, services, software, or other
intellectual property from websites operated by sellers, lessors, and licensors.
In the following case, the court considered whether a Web contract was enforceable.
CASE 15.2 STATE COURT CASE Web Contract Hubbert v. Dell Corporation
835 N.E.2d 113 (2005)
Appellate Court of Illinois
“The blue hyperlinks on the defendant’s Web pages, constituting the five-step process for ordering the
computers, should be treated the same as a multipage written paper contract.”
—Hopkins, Justice
Facts
Plaintiffs Dewayne Hubbert, Elden Craft, Chris Grout, and Rhonda Byington purchased computers from
Dell Corporation online through Dell’s website. To make their purchase, each of the plaintiffs completed
online order forms on five pages on Dell’s website. On each of the five pages, Dell’s “Terms and
Conditions of Sale” were accessible by clicking on a blue hyperlink. In order to find the terms and
conditions, the plaintiffs would have had to click on the blue hyperlink and read the terms and
conditions of sale. On the last page of the five-page order form, the following statement appeared: “All
sales are subject to Dell’s Terms and Conditions of Sale.”
The plaintiffs filed a lawsuit against Dell, alleging that Dell misrepresented the speed of the
microprocessors included in their computers they purchased. Dell made a demand for arbitration,
asserting that the plaintiffs were bound by the arbitration agreement that was contained in the terms
and conditions of sale. The plaintiffs countered that the arbitration clause was not part of their Web
contract because the terms and conditions of sale were not conspicuously displayed as part of their Web
contract. The trial court sided with the plaintiffs, finding that the arbitration clause was unenforceable
because the terms and conditions of sale were not adequately communicated to the plaintiffs. Dell
appealed.
Issue
Were the terms and conditions of sale adequately communicated to the plaintiffs?
Language of the Court
We find that the online contract included the “Terms and Conditions of Sale.” The blue hyperlink
entitled “Terms and Conditions of Sale” appeared on numerous Web pages the plaintiffs completed in
the ordering process. The blue hyperlinks on the defendant’s Web pages, constituting the five-step
process for ordering the computers, should be treated the same as a multipage written paper contract.
The blue hyperlink simply takes a person to another page of the contract, similar to turning the page of a
written paper contract. Although there is no conspicuousness requirement, the hyperlink’s contrasting
blue type makes it conspicuous. Because the “Terms and Conditions of Sale” were a part of the online
contract, the plaintiffs were bound by the “Terms and Conditions of Sale,” including the arbitration
clause.
Decision
The appellate court held that Dell’s Terms and Conditions of Sale, accessible by clicking on a blue
hyperlink, which included the arbitration clause, were part of the Web contract between the plaintiffs
and Dell. The appellate court reversed the decision of the trial court and held in favor of Dell.
Ethics Questions
Did the plaintiffs act ethically in claiming that the terms and conditions of sale were not included in their
Web contract? Do you read the terms and conditions of sale when you purchase goods over the
Internet?
The following two features discuss a federal statute that established rules for electronic contracts and
electronic signatures.
DIGITAL LAW E-SIGN Act: Statute of Frauds and Electronic Contracts
In 2000, the federal government enacted the Electronic Signatures in Global and National Commerce Act
(E-SIGN Act).3 This is a federal statute that was enacted by Congress that has national reach. The act is
designed to place the world of electronic commerce on a par with the world of paper contracts in the
United States.
One of the main features of the E-SIGN Act is that it recognizes electronic contracts as meeting the
writing requirement of the Statute of Frauds for most contracts. Statutes of Frauds are state laws that
require certain types of contracts to be in writing. The E-SIGN Act provides that electronically signed
contracts cannot be denied effect because they are in electronic form or delivered electronically. The act
also provides that record retention requirements are satisfied if the records are stored electronically.
The federal law was passed with several provisions to protect consumers. First, consumers must consent
to receiving electronic records and contracts. Second, to receive electronic records, consumers must be
able to demonstrate that they have access to the electronic records. Third, businesses must tell
consumers that they have the right to receive hard-copy documents of their transaction.
DIGITAL LAW E-SIGN Act: E-Signatures and Electronic Contracts
In the past, signatures have been hand-applied by the person signing a document. In the electronic
commerce world, it is now “What is your mother’s maiden name?” “Slide your smart card in the sensor,”
or “Look into the iris scanner.” But are electronic signatures sufficient to form an enforceable contract?
The federal E-SIGN Act made the answer clear.
The E-SIGN Act recognizes an electronic signature, or e-signature. The act gives an e-signature the same
force and effect as a pen-inscribed signature on paper. The act is technology neutral, however, in that
the law does not define or decide which technologies should be used to create a legally binding
signature in cyberspace. Loosely defined, a digital signature is some electronic method that identifies an
individual. The challenge is to make sure that someone who uses a digital signature is the person he or
she claims to be. The act provides that a digital signature can basicall …
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