February 22, 2012
Published in Business in Savannah
The Internet has emerged as an intercontinental catalogue of data, services and entertainment and a virtual marketplace for our on-demand society. As a result, mobile, web and social media usage has increased and e-commerce has exploded.
Both of these trends are expected to continue to grow at an extraordinary rate in 2012. However, despite its colossal benefits, the Internet is a breeding ground for consumer litigation, leaving legislators struggling to keep up, while courts are challenged with limited case law available.
Nevertheless, consumers insist that markets keep up with technology as retail demands push even the most conventional businesses into the digital world. Today, most businesses have incorporated some form of an online presence, ranging from static informational web pages to customized websites with fully-integrated retail sales platforms and mobile apps that put information and product sales directly into the palm of the user’s hand. Businesses are finding it hard to overlook these additional revenue streams and are doing everything they can to connect with their target markets.
Unfortunately, rising mobile, web and social media usage has only aggravated consumer lawsuits, giving businesses serious cause for concern when taking their products to cyberspace. In fact, all businesses should consider the legal ramifications of e-commerce prior to making the leap.
To further complicate matters, online sales are generally not exclusive to your own backyard. The unwary business may inadvertently find itself in an international trade debacle where foreign laws may apply. Cross-country legislation, as it relates to the Internet, can be complicated and not something that most businesses spend a lot of time considering when contemplating an online revenue source.
A common issue in e-commerce litigation is the enforceability of electronic contracts or e-contracts. Much like traditional commerce, e-commerce relies upon a buyer-seller agreement made in advance of the sale. However, unlike traditional commerce, the e-contract is drafted and presented by one party on a take-it-or-leave-it basis without giving consumers a realistic opportunity to negotiate terms that would benefit their own interests. However biased electronic contracts may seem, it seems consumers are not overly concerned as these transactions are taking place at a staggering rate.
It is not unusual for Internet users to be faced with the familiar choice to agree to the “terms of service” before proceeding with an online purchase, software download or social media site activities. When a user complies with terms stated, the e-contract is binding unless certain conditions are found “unconscionable,” or the purpose is contrary to public policy, unnecessarily harsh or includes one-sided results that “shock the conscience of the court.”
A contractual agreement requires two consenting parties, a fact that is difficult to ignore. Ultimately the choice to adhere to the terms of agreement is made by the consumer – whether uninformed or not. At a certain point, it comes down to personal accountability.
It’s absurd to offer consent without knowing the terms of agreement, just as this would be a preposterous position in any traditional contractual situation. So why are consumers disregarding the fine print found in an e-contract? Consumers and businesses alike should demand greater transparency in e-commerce trade contracts in the future to serve the mutual benefit of both parties. Otherwise, consumer litigation may eventually threaten the profitability and ease of use consumers and businesses have found so gratifying thus far.
If your business is considering online sales, it is essential to consult with a lawyer proficient in contractual language in advance. An attorney who is up-to-speed with current legislation as it continues to evolve with the influx of Internet traffic can help prevent serious headaches down the road.
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