Deck 19: Electronic Commerce

Question 1

David Stanley has created a new company that will manufacture beverage containers. He intends to call his company Stanley Cup Inc. He also intends to conduct business online. He therefore wants to use the domain name ? HYPERLINK "http://www.stanleycup.ca/" ?www.stanleycup.ca. ?Which of the following statements is TRUE?

A) If anyone objects to David's good faith use of that domain name, the case will certainly be resolved through ADR.
B) Although there are several statutes that regulate the actual practice of online commerce, there are no special rules regulating the use of domain names, and as a result, any disputes arising from David's use of that domain name will be resolved on the basis of traditional intellectual property laws.
C) The use of that domain name will be regulated by an organization known as CIRA.
D) because "Stanley Cup" accurately describes David's name and business, he has an absolute right to use that domain name
E) none of the above

Answer 1

C

Question 2

Andres has created an online service that allows users to instantaneously distribute documents to hundreds of other people. Which of the following strategies can help him reduce his risk of being held liable for the content distributed by the users of his service?

A) He should include a provision in his terms of use allowing him to claim indemnification from a user if he is held liable for something they distributed through the service.
B) He should include a provision in his terms of use warning users that he will monitor every message they distribute through the service.
C) He should avoid telling users what they can or cannot distribute through the service for fear of infringing their free speech.
D) He should review all documents and edit anything that might be considered offensive.
E) He should implement all of the above strategies.

Answer 2

A

Question 3

According to the Office of the Privacy Commissioner of Canada, which of the following is an example of Serena's personal information?

A) the name of her pet
B) the name of her best friend
C) her favourite colour
D) her body weight
E) all of the above

Answer 3

D

Question 4

Ginger's Pet Shop has decided to retail its products over the Internet. To generate interest in its new web site, Ginger wants to allow customers to post content about pets or pet supplies on the site. Which of the following examples might pose a liability risk to Ginger?

A) The display of customers' pets on Ginger's web site contributes to Ginger's image as a customer- oriented pet shop.
B) Ginger's site carries a picture of a customer's dog with the customer's permission.
C) Ginger requires customers to agree to terms of use that restrict the types of pictures they can post, leading to complaints that her terms limit free speech.
D) A customer posts a video demonstrating the superiority of Ginger's pet supplies over the supplies sold by a competitor by allowing a pet goat to eat the competitors products.
E) none of the above

Question 5

Susianne has asked for your advice on how she can reduce the risk of having her identity stolen. Which following strategies would you recommend that she adopt?

A) She should never pay for items with a credit card, instead she should only use cash.
B) She should always carry her social insurance card so she can prove her identity whenever necessary.
C) She should always chose obvious passwords for her online accounts so that she does not risk forgetting them.
D) She should never download software from the Internet.
E) She should never transmit personal information over voicemail.

Question 6

RAS Auto Parts, a Canadian company, recently received some decidedly unfavourable publicity stemming from an incident that took place at a Caribbean conference attended by its board of directors. The story was published in the Trinidad Daily Online. RAS would like to bring a defamation suit against the Daily Online in Canada. In order to obtain jurisdiction in Canada, under the effects- based approach, which of the following elements must RAS prove?

A) what harm was done
B) how the harm was suffered
C) where the harm was suffered
D) why the harm was suffered
E) all of the above

Question 7

A company has recently begun to provide online services to consumers. In order to protect itself from the risk of liability and in order to improve the quality of its services, the company has asked you, as an online consumer protection expert, to provide advice on best practices. Which of the following is TRUE?

A) With the exception of the territories, every Canadian jurisdiction has adopted its own version of PIPEDA.
B) The company is legally obligated to comply with the minimum standards established in the Canadian Code for Consumer Protection in Electronic Commerce.
C) The company should offer services in only one language in order to avoid the risk of confusion.
D) The Canadian Code for Consumer Protection in Electronic Commerce is a federal statute.
E) none of the above

Question 8

After reading an article about domain name related entrepreneurship, you decide to register several domain names for resale. Subsequently, you receive a complaint alleging that you have registered one of those names in bad faith. The complainant has filed for arbitration. The name in question is breadandbutter.com. The complainant, a baker, conducts business under the name. Based on these facts, which of the following statements is most likely to be TRUE?

A) You have an intellectual property right in the name.
B) Your domain name dispute cannot be litigated in court.
C) The complainant can claim the good faith justification.
D) You are a cybersquatter.
E) all of the above

Question 9

Kamil created an electronic contract with Rogers Cable Inc. That contract contained a paragraph that purported to allow the company to change the terms of the agreement by (i) sending a letter through the mail to Kamil, (ii) sending an email to Kamil, or (iii) posting a notice of the changes on its web site. Which of the following statements is TRUE?

A) Regardless of the precise wording of the paragraph, Rogers can vary the terms of its agreement with Kamil only if it acts in a way that would satisfy the reasonable person.
B) Regardless of the precise wording of the paragraph, Rogers cannot change the terms of the agreement unless it ensures that Kamil actually became aware of the change.
C) Because of the risk that companies may take advantage of consumers, Rogers must provide Kamil with a hard copy of a letter that explains the changes to the agreement.
D) Rogers can rely on the paragraph as long as it took reasonable steps to draw Kamil's attention to it before the contract was created.
E) As long as Kamil agreed to the terms of the contract as a whole, he will certainly be bound by every term in that contract, even if he did not actually read the entire document.

Question 10

Which of the following tests is irrelevant to a determination of the appropriate jurisdiction for litigation arising from online interaction?

A) whether the web site has an actual impact in the place where jurisdiction is being sought
B) whether there is a real and substantial connection to the place where jurisdiction is being sought
C) whether the web site merely posts information, or requires customers to interact
D) whether the defendant is culpable
E) all of the above are relevant

Question 11

Based on the decision in SOCAN v Canadian Association of Internet Providers, which of the following statements is TRUE?

A) ISPs cannot be held responsible for paying royalties.
B) An Internet service provider (ISP) is content- neutral when it does not have knowledge of infringing content and cannot practically monitor the content passing over its network.
C) "Caching" is an unacceptable use of the Internet.
D) If an ISP knows that customers could potentially infringe copyright through their use of the Internet, the ISP can be held liable for any infringement that occurs.
E) all of the above

Question 12

M!ke Internet Inc offers an Internet connection and an email account for $9 per month. The company does not retail goods, nor does it provide a forum for subscriber auctions. Which of the following is most likely TRUE?

A) M!ke is an internet service provider.
B) M!ke is an online intermediary.
C) M!ke is an online service provider.
D) M!ke is unlikely to be seen as a participant in its customers' communications.
E) all of the above

Question 13

Syntax Systems has launched a new electronic newsletter. Similar to the use of a listserv, the newsletter is composed of subscriber submissions (rather than content generated by the news service itself). Each day's accumulated subscriber submissions are automatically packaged and automatically sent by mass email without editorial review. (In fact, the whole point of the newsletter is that no one knows what anyone else will say until it is disseminated.) Revenue for the newsletter is generated through automated advertising. Which of the following is most likely to be TRUE?

A) Syntax is likely to be liable in the event that an illegal message was posted.
B) Syntax is exempted from liability by virtue of being an Internet service provider.
C) Syntax can only avoid liability if it attempts to censor illegal messages.
D) Syntax is unlikely to be liable in the event that an illegal message was posted.
E) none of the above

Question 14

The case of Rudder v Microsoft dealt with the creation of online contracts. The judge held that

A) an electronic contract does not become effective until the consumer is provided with a paper copy of the agreement.
B) consumers cannot be held liable for terms that they did not actually read.
C) parts of a document that cannot be seen on the screen, when the document is first opened, are the electronic equivalent of small print.
D) when Canadian consumers become involved in disputes regarding online contracts, they are always entitled to have their claims heard in Canadian courts.
E) none of the above.

Question 15

Which of the following would best explain why certain terms in an online agreement might be found to be of NO LEGAL EFFECT?

A) The terms are displayed in red font, rather than black.
B) The terms cannot be stored electronically.
C) The terms are not accessible to the customer until after the customer has clicked an "I agree" box to accept the agreement.
D) The terms are boilerplate provisions.
E) all of the above

Question 16

The Government of Canada proposed to add new provisions to the Criminal Code that focus on prohibiting identity theft. Which of the following statements about the proposed amendment is FALSE?

A) Currently there are absolutely no provisions in the Criminal Code that can be used to prohibit identity theft.
B) It is currently difficult to characterize personal information as property unless it has commercial value.
C) Under the proposed amendment, the offender could be ordered to pay the victim for the reasonable amount spent restoring his or her identity.
D) The proposed provisions focus on the preparatory stages of identity theft, making it illegal to possess the identity documents of another person.
E) All of the above statements are false.

Question 17

Privacy laws limit the extent to which businesses can collect, use or disclose personal information about their customers. Which of the following strategies should be adopted by a company to minimize the risks and costs associated with privacy compliance?

A) When a company only collects necessary personal information, it can use that information however it wants.
B) A company should encrypt personal information whenever possible, even if there is a small financial cost to do so.
C) If the company is located in the Yukon, it is not subject to privacy legislation so should develop its privacy policy in a way that best suits its needs.
D) A company should appoint one person to be responsible for privacy issues so that it can completely avoid the cost of training other employees about privacy compliance.
E) none of the above

Question 18

If enacted, the Electronic Commerce Protection Act will

A) require that companies eliminate the possibility of keystroke errors in online transactions.
B) allow individuals to put their names on a Do Not Call List to avoid telemarketers.
C) create a criminal prohibition against identity theft.
D) give individuals the ability to sue spammers for the actual cost of each occurrence of spam, up to $1,000,000 per day.
E) create an automatic jail term of 14 years for anyone caught sending spam.

Question 19

Which of the following propositions is supported by the decision in Rudder v Microsoft?

A) The fact that a party clicked "I AGREE" without actually reading the terms of the agreement will render the contract unenforceable.
B) The fact that a party clicked "I AGREE" without actually reading the terms of the agreement will NOT render the contract unenforceable.
C) Clicking "I AGREE" is ineffectual unless there is a printout of the agreement to satisfy the parol evidence rule.
D) Clicking "I AGREE" is not a legally permissible means of communicating acceptance of a contractual offer.
E) none of the above

Question 20

You have recently gone into business as a consultant, specializing in the area of online consumer protection. As part of your services, you offer a seminar on how to avoid online consumer complaints. Which of the following practices will you immediately suggest to your clients?

A) Be sure your terms of use include extensive use of specialized legal terminology.
B) Promise not to collect any personal information.
C) Weave promotional materials into your terms and conditions of sale.
D) Be sure to accurately describe all online goods and services.
E) Dispense with confirmation procedures.

Question 21

Which of the following statements is TRUE?

A) Electronic commerce encourages international business transactions.
B) Technology reduces marketing costs.
C) Technology allows contracts to be performed more quickly.
D) The law governing electronic commerce is uncertain.
E) all of the above

Question 22

Which of the following is an example of traffic shaping?

A) An Internet service provider (ISP) completely blocks access to particular websites.
B) An ISP slows a user's internet service whenever she tries to send files through a peer- to- peer system.
C) An online service provider offers prizes to the first 1000 visitors to its web site.
D) An ISP gives subscriber information to the police upon request.
E) An online service provider redirects internet traffic from its old web site to its new and improved web site.

Question 23

Which of the following practices should be adopted in order to respect the consumer protection principles advocated by Industry Canada?

A) sharing customer information only with trusted business partners
B) providing the information necessary for customers to make informed choices
C) implementing electronic payment systems
D) sending unsolicited email only to parties who you think will be interested
E) all of the above

Question 24

After becoming tired of the muzzak piped into your office, you decide to subscribe to an online, listener- supported radio station dedicated to jazz and blues music. You had thought that there was no upfront fee, but that listeners may make a donation using their electronic wallets. Clicking through the site, you are asked to provide certain information on a contractual form. One day, after several visits to the web site, you notice a hyperlink labeled terms of service while viewing the previous hour's play list. You click the link and a document opens, indicating that, by streaming music from the web site, you have agreed to pay a flat fee on a monthly basis with a minimum subscription of one year. On your previous visits, you never noticed the hyperlink, which is barely visible in fine print, at the bottom corner of the home page right next to a flashy and distracting animation. Which of the following BEST characterizes this situation?

A) You may have entered into a contract but its terms likely do not include a year of monthly fees.
B) You have entered into a contract and owe a year of monthly fees.
C) You can rely on Rudder v Microsoft to get out of this contract.
D) You have not entered into a contract.
E) None of the above.

Question 25

The common carriage principle is relevant to Internet service providers (ISPs) because it

A) means the exact same thing as network neutrality.
B) allows ISP's to police the Internet by monitoring the content transmitted through their Internet infrastructure.
C) allows ISPs to privilege the content that they think customers most want to see.
D) prevents ISPs from denying competitors access to their Internet infrastructure.
E) none of the above

Question 26

You have recently gone into business as a consultant, specializing in the area of online consumer protection. As part of your services, you offer a seminar to business owners on how they can prevent identity theft. Which of the following practices will you suggest to your clients?

A) implementing electronic contracting and instantaneous communication
B) utilizing an open- access network
C) adopting authentication procedures that collect only necessary personal identifiers
D) transacting as a mere conduit
E) all of the above

Question 27

Phishing occurs when

A) a company sells your personal information without your permission.
B) you download free software from the internet.
C) you accidently install a virus on your computer when you are downloading music from a web site.
D) you believe that your bank has requested your personal information, which you supply in an email, only to later learn that the initial email was a scam.
E) without your knowledge, a program captures an image of your screen that can be used by an identity thief to collect your personal information.

Question 28

Rolf Dog Food has created a new web site to sell its dog food over the Internet. Which of the following strategies will help ensure that Rolf's terms of use are binding on visitors to the web site?

A) Rolf's terms of use are automatically binding on anyone using the site, so the company does not need to worry about where or how the terms are posted.
B) Rolf could deny visitors access to the web site unless they have confirm that they have read and agreed to the terms of use by clicking an "I accept" box.
C) It is impossible to ensure that terms of use will be binding on visitors to the web site.
D) Rolf can post the terms anywhere on his web site. As long as interested customers can locate and read them, the specific location is never important.
E) Rolf should mail a hardcopy of the terms of use to each potential visitor to the web site, to ensure that they receive adequate notice of the conditions.

Question 29

A government official has recently appointed you to a committee. That committee has been asked to consider possible changes to UECA. Which of the following statements is TRUE?

A) UECA is the name of a statute that applies across Canada.
B) UECA was created by the United Nations.
C) UECA formed the basis for most Canadian statutes that deal with online transactions.
D) The government in question must be the federal government.
E) UECA requires commercial organizations of a certain size to collect customer information.

Question 30

Cordelia intended to purchase ten copies of a book from an online book dealer. She intended to keep one copy for herself, and give the others to her students as end- of- term gifts. By mistake, however, she actually placed an order for "100," rather than "10," books. She realized her error only when she received an enormous shipment of books. She now wants to avoid the consequences of her mistake. Which of the following statements is TRUE under most Canadian statutes that deal with electronic commerce?

A) Cordelia will be entitled to relief only if she proves that she had committed a reasonable mistake and that she had not been careless when she placed her order.
B) Cordelia cannot possibly avoid the consequences of her own mistake.
C) Cordelia must pay for all 100 copies of the book unless she can prove that the book dealer immediately realized that a mistake had been made.
D) Cordelia is entitled to relief only if, among other things, she notified the book dealer of her error as soon as possible after realizing she had made a mistake.
E) Cordelia is automatically entitled to relief if the book dealer's web site did not immediately ask her to confirm the number of books that she wanted to purchase.

Question 31

Which of the following proposals is found within the Canadian Code of Practice for Consumer Protection in Electronic Commerce?

A) Unsolicited emails can be sent to customers without their consent as long as the subject line of the email clearly specifies what the message is about.
B) To reduce the risk of confusion and disagreement, online communications should be available in one language only.
C) Online vendors should never communicate with people they know to be children.
D) Online vendors should make a complaints procedure available to customers, endeavour to deal with complaints within one week, and resolve or address complaints within 45 days.
E) all of the above

Question 32

According to consumer protection principles, when should your business provide a refund for a completed online transaction?

A) when the transaction was the result of a keystroke error
B) when the customer had no opportunity to correct or cancel her order before it was accepted
C) when the customer has entered into the transaction without adequate information
D) when the customer mistakenly entered into the transaction because of inaccurate prompts on your web site
E) all of the above

Question 33

Eta sends Morley a contractual offer via email from her Calgary office. The email contains a provision indicating that the offer expires at 5:00 PM, Calgary time. Morley replies to Eta's offer from his Vancouver office, indicating that he accepts her offer. Morley's email leaves his control at 4:52 PM (Vancouver time) and reaches an information system within Eta's control instantaneously. Eta waited in her office till 5:10 PM (Calgary time), but received nothing (because of the one- hour time difference between Vancouver and Calgary). The next day, when Eta found Morley's email in her inbox (time stamped at 5:52 Calgary time), she phoned Morley to refuse the deal. According to the Uniform Electronic Commerce Act, which of the following is TRUE?

A) Eta's offer expired.
B) Once she opened her email it was too late for Eta to refuse the deal.
C) Morley accepted Eta's offer, but the contract did not come into affect until the next morning when Eta opened her email.
D) Eta and Morley have definitely concluded a binding agreement, which was formed at 4:52 Calgary time.
E) Eta and Morley have definitely concluded a binding agreement, which was formed at 5:52 Calgary time.

Question 34

The International Widget Co has approached you seeking advice. It is currently embroiled in a dispute with one of its regular trading partners. As a result of spilling Orange Crush on his keyboard, the trading partner's Purchasing Officer accidentally ordered 700 widgets, instead of the usual monthly 70. Figuring that the extraordinary order would not be processed, he did not bother informing International Widget about the mistake. Relying on the accuracy of the order, International Widget bought supplies necessary to make 700 widgets. The trading partner refuses to carry out the transaction. Assuming the relevant jurisdiction follows the approach adopted by Canadian statutes that deal with electronic commerce, which of the following is most likely TRUE?

A) International Widget can recover from its trading partner the cost of no more than 500 widgets.
B) International Widget's trading partner will not be bound by the order.
C) International Widget can recover from its trading partner the cost of no more that 350 widgets.
D) International Widget's trading partner will be bound by the order.
E) none of the above

Question 35

Which of the following propositions is best supported by the decision in Zhu v Merrill Lynch HSBC?

A) Customers are entitled to rely on the common sense meaning of a web site's online prompts when completing a transaction.
B) Customers are NOT entitled to rely on the common sense meaning of a web site's online prompts when completing a transaction.
C) It is the customer's responsibility to confirm the prompts received during online transactions.
D) Companies owe customers the same duty to make online transactions readily understandable, regardless of whether the customer might risk losing large amounts of money as a result of a faulty transaction.
E) Customers cannot rely on keystroke errors to cancel a transaction when that transaction involves the purchase or sale of stocks.

Question 36

Javed has created a web site for his company. The web site is strictly informational. It does not allow customers to buy products online or post their own content. Which of the following statements is TRUE?

A) Unless Javed specifies that his web site forms a part of his contract with customers, the content on the web site can never be considered in a claim for innocent misrepresentation.
B) Javed's web site could put him at risk for claims of copyright infringement, depending on the information posted on the site.
C) Javed does not need to worry about liability issues.
D) Javed should not include terms of use on his web site because such terms are only appropriate for websites that allow customers to make online purchases or post content.
E) none of the above

Question 37

Which of the following kinds of online behaviour might potentially attract liability?

A) trademark infringement
B) posting a defamatory remark
C) disclosing personal information
D) distributing materials subject to copyright
E) all of the above

Question 38

Miki wants to set up some kind of automated marketing to advertise her latest jewelry line. She is also wary of annoying her customers or breaking the law with her marketing. Which of the following strategies should she adopt ?

A) Sending an email to her regular customers, and requesting that they forward her email to ten friends, who can forward it to ten more friends and so on.
B) Comparing her list of customer phone numbers, which she gathered with permission to use for business- related phone calls, against the national Do Not Call List (DNCL) and sending a telephone message to those names that do not appear on DNCL.
C) Hiring a telemarketer to call every name in the phone book so that she can avoid liability all together.
D) Sending an email to everyone on her business contact list, which happens to be a very long list.
E) Sending an automated telephone message to every name in the phone book.

Question 39

Canadian and provincial privacy laws can be said to reduce the risk of identity theft. Which of the following statements is an example of how privacy laws might accomplish this task?

A) By requiring businesses to destroy personal information that is no longer needed.
B) By encouraging businesses to track customer purchases so they can identify any purchases that seem out of character and might therefore be fraudulent.
C) By requiring businesses to run criminal record checks on all employees.
D) By denying business the right to ever disclose personal information.
E) all of the above

Question 40

Which of the following is a good reason for incurring the costs associated with implementing Industry Canada's consumer protection principles into your business?

A) You will avoid the need for adopting a privacy- compliance policy.
B) Your business is legally required to do so.
C) You will strengthen consumer confidence in your products.
D) You will avoid competition from multi- level marketers.
E) all of the above

Question 41

Canada's Uniform Electronic Commerce Act creates rights, powers, obligations, and immunities with respect to electronic commerce- related activities within Canada.

Question 42

The Uniform Electronic Commerce Act states that electronic communications are deemed sent when they leave the senders control, whether they are received or not.

Question 43

All websites must contain terms of use.

Question 44

Isabella has commenced an action against a Caribbean- based company who offered a "guaranteed seventeen percent return on all 30- day foreign investments of twenty thousand dollars or more." Both the initial investment and interest were to be repaid in the investor's national currency, regardless of the mode of investment. Instead, the company provided Isabella with a certificate of ownership in a sugarcane farm, presumably obtained for less than its stated value. Because Isabella is a Canadian citizen she would like the action tried in a Canadian court and, accordingly, must satisfy the real and substantial connection test. Under this approach, Isabella must demonstrate that the effects of the Caribbean company (ie the harms suffered) were experienced in Canada.

Question 45

Kerasic Online is an ISP. It has been sued by SOCAN for copyright violation. SOCAN argues that Kerasic commits a wrong every time that it allows a customer to electronically distribute music files to other individuals. Kerasic believes, however, that as a result of a recent Supreme Court of Canada decision, an ISP can never be held liable for participating in the distribution of electronic music files. Kerasic's conclusion is correct.

Question 46

Companies should refrain from telling consumers about privacy breaches because it will cause consumers to become distrustful.

Question 47

While attending a recent conference on electronic publishing, Samina overheard a colleague remark that online service providers can avoid liability against third parties by inserting an exclusion from liability provision into their terms of use, provided that the exclusion clause is sufficiently brought to the attention of its users. The remark that she overheard is correct.

Question 48

Identify and briefly explain the provisions of the Canadian Code of Practice for Consumer Protection in Electronic Commerce that deal with advertising communications and potential customers.

Question 49

According to the Canadian Code of Practice for Consumer Protection in Electronic Commerce, it is illegal for a company to send unsolicited emails to customers.

Question 50

Defensive domain name registration is a precaution taken by companies to avoid potentially costly disputes with cybersquatters.

Question 51

The principle of network neutrality states that internet service providers should refrain from providing online services.

Question 52

Matt Cone has registered the domain name icecreamcone.ca. While Matt plans on using the domain name to promote his homemade ice cream, he is also considering selling the name to the highest bidder and using the money to help offset his start- up costs. Matt has contacted several relevant businesses with his offer. Recently, Matt has received a complaint from a kosher ice- cream distributor that holds a registered Canadian trade- mark for "Ice- Cream Cohen." It has characterized Matt's actions as cybersquatting and is demanding that he assign his registration in the domain name to them at cost. Because cybersquatting is an illegal practice, Matt must assign his rights to Cohen.

Question 53

You are the owner of Bread and Butter, a catering service that accepts customer orders through its web site. You have recently discovered that your company's domain name, breadandbutter.ca, was registered by a company called Domain Acquisitions Co during a lapse in your registration (due to an overlooked outstanding payment). This company has since offered to resell the domain name to your company for a considerable sum. Needless to say you are extremely perturbed. What are your possible courses of action? Decide which remedy you will seek and outline your strategy.

Question 54

You recently received a notice that your Internet service provider has released your personal account information to a third party in connection with a defamation complaint. When you call to contest the service provider's actions, you are referred to a provision in the terms of use agreement that you apparently did not read (or, at least, you did not remember reading it!). The relevant provision gives permission to release personal information under such circumstances. Can the service provider rely on the provision? Explain your reasoning, using the precedent set out in Rudder v Microsoft.

Question 55

Hoben Electronic Publishing Co wishes to take proactive steps to insulate itself from potential liability for any libelous content it might inadvertently publish. It has noticed that Southern Ontario is particularly litigious. Accordingly, it has posted a notice on its web site stating that residents of Southern Ontario cannot purchase or download content from the site. These are the only steps taken by the company. Although it had the opportunity to purchase software that would allow it to block access to residents of that region, it has chosen not to do so. Nor has Hoben engaged in further screening at the time of purchase and/or download. Nevertheless, the steps taken by the company are sufficient to avoid liability under the effects- based approach to determining jurisdiction.

Question 56

Identity theft is a major concern for businesses and customers alike. Briefly explain why identity theft can be harmful to a business and provide three examples of how a business might reduce the risk of identity theft.

Question 57

Given the uncertainty involved in determining a company's potential liability in foreign jurisdictions, are there any proactive steps that a company might take to protect itself? Explain your answer and provide examples.

Question 58

Under the proposed Electronic Commerce Protection Act, if Jane is identified as a known spammer, her Internet service provider can cancel her service without liability.

Question 59

The Government of Canada enacted PIPEDA in part to ensure an overlap between federal and provincial privacy laws.

Question 60

Citron Cleaning Supplies has begun marketing their new computer screen cleaner under the name "Compuclean." Citron is a US- based company and holds a US federally registered trademark for "Compuclean." Recently, it has discovered that a Canadian company is in the business of vending a similar product through the web site compuclean.ca. The Canadian web site encourages
foreign- based orders and maintains an international toll- free phone number for customer inquiries. Instead of bringing a complaint under the domain name arbitration system, Compuclean wishes to bring an action against the Canadian company in a US court. In order to increase the chances that the US court will assert jurisdiction, Citron should argue in favour of the application of a passive versus active test.

Question 61

Upon graduation from college, Martine decided to go into the information business. His first venture was a
fee- based daily electronic newsletter for online stock traders. Given the time sensitive nature of the information, Martine's Terms of Use promised to deliver the newsletter every business day, no later than 9:00 AM Eastern Standard Time. The newsletter was doing fairly well until one day at 8:42 AM EST, Martine spilled Orange Crush on his notebook computer right as he clicked to send the newsletter to the subscriber list. Having experienced a hardware malfunction and having lost a key piece of software and a portion of his address list, the newsletter was sent to some subscribers but not all. Because Martine's service was down for the rest of the day, those who didn't receive the newsletter right when it was sent, never did receive the news that day.
Martine had no way to determine who received and who did not receive the newsletter. Consequently, several day traders demanded a refund for services not rendered, while others decided to seek damages for lost opportunities. Martine is seeking your advice. Outline the issues involved in this case and advise Martine on how he can prevent future disputes, given the nature of his business.

Question 62

What are the advantages and disadvantages of a decision by your business to implement Industry Canada's
Principles of Consumer Protection in Electronic Commerce? Explain your answer.

Question 63

You have just started a new business selling jewel- encrusted dog collars over the Internet. Your web site allows customers to place orders online, which they pay for by credit card. The collars are then shipped straight to their homes. The web site is almost ready to be launched, the last thing you want to add to the site is your privacy policy. Briefly explain three provisions that you might wish to include in your privacy policy, and why a privacy policy is important for your business.

Question 64

Many businesses presume that electronic messages that have been sent will be received. Briefly discuss how businesses can proactively prevent the problems that would arise if a message were lost in cyberspace.

Question 65

You are a manager at a medium- sized start- up company that is well positioned in the online intermediary market. One of your colleagues has asked you to offer some advice about the liability of online intermediaries. Provide a brief introduction to this issue. Illustrate your answer with business law examples. How can a business shield itself from intermediary liability?

Question 66

Briefly explain how Canada's Uniform Electronic Commerce Act (UECA) emerged. What role does it play in online contract formation?

Question 67

"The Model Law on Electronic Commerce is not really a law." Is this statement true? Explain your answer.

Question 68

What is the significance of Time magazine's choice for "Person of the Year" for 2006? What does this choice signify for electronic commerce?

Question 69

Explain the principle of network neutrality using a business example. Why do some Internet companies, academics and public interest advocates support this principle? Does any Canadian legislation address network neutrality?

Question 70

Monkey Business Inc has implemented an automated software system that allows its employees to enter their weekly hours. Recently, it was determined that one if its employees made a keystroke error and was underpaid as a result. As a general rule, how can Monkey Business and its employees protect themselves against keystroke errors?