Areas of Cyberlaw - Contract Law, Jurisdiction and Taxation

Contract Law

A contract is a legally recognized agreement between two or more persons, giving rise to obligations that may be enforced by the courts. Contracts can protect a business when they are created properly and contain the necessary information. The most essential requirement is that the contract was completed in writing, is valid and can be presented as proof of the transaction.

Some of the areas in which a contract will protect a business include:

• when hiring a service provider.
• when engaging a contractor or employee.
• when purchasing or selling a domain name.
• when entering into advertising or affiliate programs.
• when sharing confidential information.
• when establishing service level agreements with a service provider.
• when providing software licenses.

Contract law is governed by jurisdiction. In Canada, most contract law is governed provincially.

Jurisdiction

Due to the global nature of the Internet, information published in Canada can be viewed all over the world and vice versa, making it possible that the content publisher is liable not only in Canada, but also in other jurisdictions. Businesses should seek legal advice when conducting international e-Commerce to ensure that they are abiding by current legal standards.

In Canada and in other countries, laws with regard to electronic commerce and jurisdiction are still evolving, changing frequently. In most cases, at this time, the physical location of the content publisher will determine jurisdiction.

Taxation

The principle issues for Internet taxation law are with regard to taxation jurisdiction, proper collection of taxes and enforcement. In Canada, goods and services taxes or sales taxes and import duties are the forms of taxation most applicable to business activities over the Internet. Taxes that are applicable when a product or service is sold off-line are also applicable when a product or service is sold online.

The Canada Revenue Agency has published a guide (Conducting business on the Internet) for businesses that covers topics such as business account registration, income tax and e-commerce, GST/HTS and information on keeping electronic books and records.

GST/HST Technical Information Bulletin B-090: GST/HST and Electronic Commerce is an excellent reference source for businesses that need to understand GST/HST applications in e-commerce.