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(vi) Right of the consumer to withdraw, i.e. cancellation terms;
(vii) The minimum duration of the contract and whether the contract for the supply of
products or services is to be permanent or recurrent, if appropriate;
(viii) Whether an equivalent product or service might be substituted, and confirmation as
to whether the seller pays the return costs in this event.
After the contract has been entered into, the supplier is required to provide written confir-
mation of the information provided. An e-mail confirmation is now legally binding
provided both parties have agreed that e-mail is an acceptable form for the contract. It is
always advisable to obtain an electronic signature to confirm that both parties have agreed
the contract, and this is especially valuable in the event of a dispute. The default position for
services is that there is no cancellation right once services begin.
The Out-Law site produced by lawyers Pinsent Mason gives more information on dis-
tance selling (www.out-law.com/page-430).

3 Making and accepting payment

For transactional e-commerce sites, the relevant laws are those referring to liability between
a credit card issuer, the merchant and the buyer. Merchants need to be aware of their liability
for different situations such as the customer making a fraudulent transaction.

4 Authenticating contracts concluded over the Internet
‘Authentication’ refers to establishing the identity of the purchaser. For example, to help
prove a credit card owner is the valid owner, many sites now ask for a 3-digit authentication
code which is separate from the credit card number. This helps reduce the risk of someone
buying fraudulently who has, for instance, found a credit card number from a traditional
shopping purchase. Using digital signatures is another method of helping to prove the iden-
tity of purchasers (and merchants).

5 E-mail risks
One of the main risks with e-mail is infringing an individual’s privacy. Specific laws have
been developed in many countries to reduce the volume of unsolicited commercial e-mail or
spam, as explained in the previous section on privacy.
A further issue with e-mail is defamation. This is where someone makes a statement that
is potentially damaging to an individual or a company. A well known example from 2000
involved a statement made on the Norwich Union Healthcare internal e-mail system in Eng-

land which was defamatory towards a rival company, WPA. The statement falsely alleged
that WPA was under investigation and that regulators had forced them to stop accepting
new business. The posting was published on the internal e-mail system to various members
of Norwich Union Healthcare staff. Although this was only on an internal system, it was not
contained and became more widespread. WPA sued for libel and the case was settled in an
out-of-court settlement when Norwich Union paid £415,000 to WPA. Such cases are rela-
tively rare.

6 Protecting intellectual property (IP)
Intellectual property Intellectual property rights (IPR) protect designs, ideas and inventions and includes con-
rights (IPR) tent and services developed for e-commerce sites. Closely related is copyright law which is
Protect the intangible designed to protect authors, producers, broadcasters and performers through ensuring they
property created by
corporations or see some returns from their works every time they are experienced. The European Directive
individuals that is of Copyright (2001/29/EC) came into force in many countries in 2003. This is a significant
protected under
copyright, trade secret update to the law which covers new technologies and approaches such as streaming a broad-
and patent laws. cast via the Internet.
IP can be misappropriated in two senses online.