Legal Issues in the Virtual World and E-Commerce

Legal Issues in the Virtual World and E-Commerce

Daniel S. Hoops (Walsh College, USA)
DOI: 10.4018/978-1-61692-808-7.ch010
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Cyberspace is such an enormous concept that trying to briefly explain the “rules” for E-Commerce or “cyberlaw” is next to impossible. For an E-Commerce, it is important to understand that there are business-to-business transactions and those involving consumers. In addition to requiring a mastery of many legal specialties, E-Commerce presents legal issues in a virtual environment. Many business practices in a cyberspace are untested in the courts. New and innovative methods of competition, as well as the effects of an international playing field change the playfield constantly. The legalities of this great new frontier pose an impressive and intellectually stimulating challenge. This chapter is a survey and summary of the legal environment in the E-Commerce and the virtual world.
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Jurisdiction, Venue And Choice Of Laws

The easiest way to navigate the jurisdictional procedure is to answer the following questions: where did the alleged wrongful act occur? Where does the defendant reside or conduct business? Is there another jurisdiction in which the defendant established “minimum contacts” thereby making jurisdiction appropriate there? (International Shoe Company, 1945)

Each dispute must be analyzed using the U.S. Supreme Court’s standard that the non-resident defendant must (a) have had some minimum contact with the particular state, and (b) invoking that state’s jurisdiction will not offend the “traditional notions of fair play” and “substantial justice”.(Ibid; Heliocopteros Nacionales de Columbia, 1984). In other words, did the defendant receive some benefit from the jurisdiction, such as engaging in sales with residents of the particular jurisdiction, advertising within the jurisdiction, having residents of the jurisdiction as members to its website (Helicopteros Nacionales de Columbia).

The fact that a party has its principal place of business and servers located in another jurisdiction does not insulate that party from another state invoking its jurisdictional long-arm statute (Zippo Manufacturing Company; Lakin, 2003; Trintec Industries In, 2005).

One way to avoid being subjected to another state or nation’s jurisdiction is through a mandate as to what law will apply should there be a dispute related to the transaction. The “choice of laws” or “choice of venue” provision is a standard term in most contracts. In the event there is a breakdown in an on-line business relationship, next to the parties’ signatures, this should be considered one of the more important covenants in any eContract. Who will be presiding over the dispute, where will the dispute be resolved, and what laws will be applied are critical strategies in business.

Language to the following effect should be considered in any agreement between parties in an E-Commerce transaction:

Choice of Law and Venue. This agreement has been entered into in the State of Michigan, United States of America. The validity, interpretation and legal effect of this agreement is governed by the laws of the State of Michigan applicable to contracts entered into and performed entirely within such state (without giving effect to any conflict of laws principles under the laws of the State of Michigan and regardless of the place or places of the actual execution of this agreement or the place or places of the actual performance of this agreement). The Michigan courts (state and federal), only, shall govern jurisdiction over any controversies regarding this agreement, and the parties hereto consent to and irrevocably and unconditionally agree to be subject to the exclusive jurisdiction of said courts located in Wayne County, Michigan, United States (and of the appropriate appellate courts therefrom).

Courts throughout the United States and treaty nations should honor the provisions of a valid and otherwise lawful agreement, including an agreement pre-determining the jurisdiction, venue, choice of laws, if these are terms negotiated between the parties (Hague Conference on Private International Law, 2005).

Complete Chapter List

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Table of Contents
Ian Hughes
Barbara L. Ciaramitaro
Barbara L. Ciaramitaro
Chapter 1
David Oyarzun, María del Puy Carretero, Amalia Ortiz, Alex García-Alonso
This chapter presents an introductory overview of virtual worlds. Its purpose is to give the reader a basic knowledge about what a virtual world is.... Sample PDF
Virtual Worlds: Definition, History and the Elements that Compose Them
Chapter 2
Yesha Sivan
The goal of this chapter is to two fold: first to define and expose the domain of “Real Virtual Worlds” and secondly to define the critically of... Sample PDF
3D3C Real Virtual Worlds Defined: The Commerce Challenge
Chapter 3
Susan Jones
This introductory chapter provides an overview of e-commerce marketing focused on history, trends and future predictions for the field – leading... Sample PDF
From E-Commerce to V-Commerce
Chapter 4
Tracy Harwood
This chapter firstly explores the characteristics and features of online games and their potential for e-commercial exploitation via the communities... Sample PDF
Convergence of Online Gaming and E-Commerce
Chapter 5
Rita King
Virtual business as defined in this chapter is any business interaction that takes place in an immersive digital space in which individuals are... Sample PDF
Evolution of Business in Virtual Environments
Chapter 6
Paul Blowers
The rapid rise of Virtual World technology poses exciting opportunities and complex challenges for businesses. Virtual World technology, for the... Sample PDF
Company Specific Virtual Worlds
Chapter 7
Barbara L. Ciaramitaro, James Jones
The combined military forces of the United States are over 3 million strong; currently command a defense budget of $540 billion with an additional... Sample PDF
Virtual Worlds and the Military
Chapter 8
Virtual Education  (pages 144-159)
Barbara L. Ciaramitaro
Virtual education is a multi-billion dollar business and maintains a firm place in the world of E-Commerce. It is a mode used by educational... Sample PDF
Virtual Education
Chapter 9
Lee Hwang
Virtual worlds have long been a gleam in the visionary’s eye: the essential concept of a virtual world may have originated with Pliny (Biocca &... Sample PDF
Virtual Market Economies and the Business of Virtual Worlds
Chapter 10
Daniel S. Hoops
Cyberspace is such an enormous concept that trying to briefly explain the “rules” for E-Commerce or “cyberlaw” is next to impossible. For an... Sample PDF
Legal Issues in the Virtual World and E-Commerce
Chapter 11
Arman Gukasyan, Nadezhda Ilyina, Alexander Lavrov
Web 2.0 has demonstrated how new technologies can change the structure of the customer-provider relationship. This is evident in the many new... Sample PDF
Achieving Realism in 3D Interactive Systems: Technological Issues
Chapter 12
M. Kyritsis, S. R. Gulliver, S. Morar
Learning the spatial layout of an environment is essential in application domains including military and emergency personnel training.... Sample PDF
Learning Space in Virtual Environments: Understanding the Factors Influencing Training Time
Chapter 13
Shenlei E. Winkler
Open-Simulator (Open-Sim) refers to a three dimensional application environment that can be used to develop virtual worlds similar to those that... Sample PDF
Opening the Content Pipeline for OpenSim-Based Virtual Worlds
Chapter 14
Greg Gogolin
This chapter looks at security and privacy concerns of virtual worlds by investigating the use and capabilities of current and emerging technologies... Sample PDF
Security and Privacy Concerns of Virtual Worlds
Chapter 15
Joerg H. Kloss
This chapter discusses the topic of standards for Virtual Worlds with emphasis on their usability as a stable and reliable basis for long-term... Sample PDF
The Role of Standards for E-Commerce in Virtual Worlds
Chapter 16
Khulood Rambo, Kecheng Liu
Virtual E-Commerce can deliver product information that is similar to the information obtained from direct product examination. Both, interactivity... Sample PDF
Culture-Sensitive Virtual E-Commerce Design with Reference to Female Consumers in Saudi Arabia
Chapter 17
William G. Burns
The future of the evolving, collaborative communications structure will be impacted to an enormous and ever increasing degree by the merging of... Sample PDF
The Future of Virtual Worlds in E-Commerce
Chapter 18
Charles P. Schultz
Christensen (2002) describes that new technologies and solutions replace established goods and services as a result of being “good enough”... Sample PDF
Virtual Worlds: Good Enough Substitute?
About the Contributors