1.1 GLOBALISATION OF BUSINESS
Electronic frontier
The Internet is a global network of computers that all speak the same language, a ``digital Esperanto'' of zero's and
ones (Gringras 1). This giant network has given birth to an electronic frontier, namely a virtual world in which cyber
citizens enter into cyber contracts.
One of the phenomena of globalisation and the development of information technology is the advent of global
business.
Globalisation
At the very least, globalisation is a process that affects all aspects of social, political, and economic activity. The world
is thus shrinking, and we are irresistibly moving toward a world of increased communication, common markets, and
shared culture.
The digitisation of information and the rapid growth of the Internet have had a marked influence on society. The
Internet is changing the way we communicate and do business. These changes have dramatically and irrevocably
altered the needs of business and industry.
2 What is electronic commerce?
Electronic commerce, or e-commerce, is simply trading electronically.
The technologies that can be used for electronic commerce include
- the Internet and the World Wide Web,
- electronic mail (e-mail),
- EFTPOS, and
- the common fax machine.
Commerce over the Internet differs from traditional commerce, in that, traditionally trading was developed in a paper
based society.
E-commerce takes place in an anonymous borderless society, and many of the rules which were developed for
trading in a real environment is inappropriate for this new virtual environment. Intellectual-property law faces the
biggest challenge yet as on- line services, the Information Highway and the age of multi- media have become realities.
Security
The Internet, comprised of millions of interconnected computers, allows nearly instantaneous communication and
transfer of information, around the world.
People use e-mail to correspond with one another.
The World Wide Web is used for online business, data transmission, research, learning, personal communica- tions,
transfer of payments and a myriad of other activities. The perpetual increase of information transmitted electronically
has lead to an increased need for secure transmissions.
Legal Issues
On-line service providers are experiencing a number of issues of concern namely
- privacy,
- liability,
- content restrictions,
- security,
- intellectual-property protection,
- consumer protection,
, - electronic authentication, and
- electronic-payment mechanisms.
Other issues are also affecting the consumer, including
- access to global telecommunications networks and
- the myriad of issues affecting access.
The creators of website shopping malls are faced with the challenge to design their sites in order to effectively contract
with customers.
3 1.3 International Trends In Legislation And Regulatory Regimes
Uniform Trade Laws
International efforts are under way to tackle the most important policy issues regarding
- telecommunications deregulation,
- the unified treatment of paperless commercial transactions,
- intellectual-property protection,
- security and privacy and customs and taxation.
Laws providing for data protection, digital and electronic signatures, privacy and access to information have become
imperative.
UNCITRAL Model Law
The UNCITRAL Model Law on Electronic Commerce (1996) aims to create a more secure legal environment for what
has become known as ``electronic commerce'' by providing a tool for states to enhance their legislation regarding
paperless communication and storage of information.
The Model Law is expressed in a technologically neutral manner; so that it can apply not only to existing, but also to
future, technology.
Examples
Numerous jurisdictions that have adopted legislative measures to facilitate e-commerce based their enabling
instruments on the Model Law (see, eg, in the US, the draft Uniform Electronic Transactions Act (hereafter referred to
as ``the UETA'' (1999).
This Act has been closely modelled on articles 2(a) and (f), 4, 5, 6, 7, 8, 9, 10, 11, 14 and 15 of the Model Law; see
also the Australian Electronic Transactions Act 1999; and the Canadian Uniform Electronic Commerce Act 1999
(available at <http:// www.law.ualberta.ca/alri/ulc/acts/eueca.htm>) (assented to on 13 Apr 2000); see Ontario's Act
with Respect to Electronic Information, Documents and Payments (Bill 70 2000);
Singapore has adopted the Electronic Transactions Act 25 of 1998, based on the Model Law. International
organisations have also played an important role in policy formulation (see the Global Business Dialogue on Electronic
Commerce, available at <http:// www.gbde.org>)).
,STUDY UNIT 2
Introduction to the Internet: overview and major role players
INTRODUCTION TO THE INTERNET
ORIGIN OF THE INTERNET
The Internet is a global network of computers that all speak the same language, a ``digital Esperanto'' of zero's and
ones.
The Internet is made up of a shared infrastructure namely a network of networks that all use the same protocols.
The ``TCP/ IP'' protocol is used in the United States, and the ``Open Systems Interconnection'' (OSI) protocol is used
in Europe.
The Internet came into being in the United States in 1969, for strategic military purposes.
The development of ARPAnet the first interlinked network of 40 computers enabled the American Defence
Department to simultaneously dispatch orders to all ballistic missile bases. The basic principles that guided the
development of the first network in the 1960's still apply today.
These networks link computers throughout the world through several means of telecommunication, such as telephone
and coaxial cables, fibre-optics and satellites. The best-known category of communication over the Internet is the
World Wide Web.
The World Wide Web (WWW) is at the moment the most popular way of gaining entry to the Internet.
The Internet consists of a world wide association of computers and infrastructure that makes communication possible.
The WWW is a part of the Internet consisting of interlinked data that makes communication on the web possible by
using a specific Internet protocol called HTTP.
In order to access information on the WWW a user needs an Internet browser like Netscape Communicator or Internet
Explorer which provides the means for finding and reading information on the web.
Each website has a unique web-address where the information hosted on that site may be found. In order to find
information, the user therefore needs to have or find the correct address.
Search engines, like Google (http:// www.google.com) provide a quick and efficient way to find relevant addresses on
the Internet.
An address will usually look as follows: http://www.msn.co.za. Several other communica- tion applications are also
available to the user, namely e-mail (electronic mail), Telnet, FTP (File Transfer Protocol), Gopher, Mailing Lists,
Discussion Groups (such as Newsgroups) and Internet Relay Chat. core infrastruc- ture The core infrastructure of the
Internet consists mainly of routers (computers designed to receive and transmit data), hosts (computers which store
programs and data), and pipes (telecommunication links between the routers and hosts).
2 2.2 INTERNET ROLE PLAYERS
MAIN PLAYERS
The main players in the Internet context are infrastructure and network providers, content providers, administrators,
access providers (commonly, and perhaps less accurately, known as Internet Service Providers (ISPs), or, more
accurately, as Online Service Providers (OSPs)), navigation providers, and transaction facilitators.
, 10 2.3 CONTRACTUAL RELATIONSHIP BETWEEN PARTIES
A number of contractual relationships may be created by and between parties using the Internet, ranging from
agreements to provide infrastructure, to provide access to the web, hosting material to commercial agreements
between users.
INFRASTRUCTURE PROVIDERS.
These entities provide the basic infrastructure which makes communication on the Internet possible.
The first type of infrastructure needed is communication lines such as telephone or data lines which link the various
computer systems to one another.
These services are usually provided by world-wide telecommunication companies such as Telkom. The agreement is
a composite agreement including lease, service and a contract for the use of the infrastructure.
INTERNET SERVICE PROVIDERS.
These entities provide a number of services to the users of the Internet ranging from Internet access, e-mail facilities
and hosting of websites.
- Mainly service agreements ( locatio conductio operis) in terms of which the service provider provides the services
agreed upon at a price agreed upon.
INTERNET CONTENT PROVIDERS.
These entities provide information on the web to users of the Internet.
There are a great variety of content providers, some charging fees for access or use of their sites, whereas others
provide free access but make their money from selling advertising space on their websites.
INTERNET BUSINESSES
Today there are a host of websites where transactions can be concluded online between the Internet business and
clients.
The rights and duties flowing from the contract concluded between the business and client will be determined by
establishing the naturalia for that contract as well as the agreement itself.
Many sites also make use of standard terms and conditions which are included by reference or through so- called
click-wrap.
Any relationship between Internet role players will be determined by the contractual relationship between them.
In the law of contract, relationships between contractual parties are determined first and foremost by the agreement
between the parties themselves.
However, there are certain specific contractual types and relationships for which the common law has developed a
number of specific rules - Naturalia which will apply to the relationship of a specific contract type unless the parties
have made another arrangement in their agreement.
It is therefore important to establish what kind of contractual relationship one is dealing with.
Freedom Of Contract In the South African law of contract, the principle of freedom of contract plays a fundamental
role in the flexibility and adaptability of this part of the law. This principle means, inter alia, that the parties have a large
degree of freedom in structuring any contractual relationship according to their wishes and needs. This also holds true
for the contractual relationships that may be concluded in respect of Internet services and cyber trade.
Electronic frontier
The Internet is a global network of computers that all speak the same language, a ``digital Esperanto'' of zero's and
ones (Gringras 1). This giant network has given birth to an electronic frontier, namely a virtual world in which cyber
citizens enter into cyber contracts.
One of the phenomena of globalisation and the development of information technology is the advent of global
business.
Globalisation
At the very least, globalisation is a process that affects all aspects of social, political, and economic activity. The world
is thus shrinking, and we are irresistibly moving toward a world of increased communication, common markets, and
shared culture.
The digitisation of information and the rapid growth of the Internet have had a marked influence on society. The
Internet is changing the way we communicate and do business. These changes have dramatically and irrevocably
altered the needs of business and industry.
2 What is electronic commerce?
Electronic commerce, or e-commerce, is simply trading electronically.
The technologies that can be used for electronic commerce include
- the Internet and the World Wide Web,
- electronic mail (e-mail),
- EFTPOS, and
- the common fax machine.
Commerce over the Internet differs from traditional commerce, in that, traditionally trading was developed in a paper
based society.
E-commerce takes place in an anonymous borderless society, and many of the rules which were developed for
trading in a real environment is inappropriate for this new virtual environment. Intellectual-property law faces the
biggest challenge yet as on- line services, the Information Highway and the age of multi- media have become realities.
Security
The Internet, comprised of millions of interconnected computers, allows nearly instantaneous communication and
transfer of information, around the world.
People use e-mail to correspond with one another.
The World Wide Web is used for online business, data transmission, research, learning, personal communica- tions,
transfer of payments and a myriad of other activities. The perpetual increase of information transmitted electronically
has lead to an increased need for secure transmissions.
Legal Issues
On-line service providers are experiencing a number of issues of concern namely
- privacy,
- liability,
- content restrictions,
- security,
- intellectual-property protection,
- consumer protection,
, - electronic authentication, and
- electronic-payment mechanisms.
Other issues are also affecting the consumer, including
- access to global telecommunications networks and
- the myriad of issues affecting access.
The creators of website shopping malls are faced with the challenge to design their sites in order to effectively contract
with customers.
3 1.3 International Trends In Legislation And Regulatory Regimes
Uniform Trade Laws
International efforts are under way to tackle the most important policy issues regarding
- telecommunications deregulation,
- the unified treatment of paperless commercial transactions,
- intellectual-property protection,
- security and privacy and customs and taxation.
Laws providing for data protection, digital and electronic signatures, privacy and access to information have become
imperative.
UNCITRAL Model Law
The UNCITRAL Model Law on Electronic Commerce (1996) aims to create a more secure legal environment for what
has become known as ``electronic commerce'' by providing a tool for states to enhance their legislation regarding
paperless communication and storage of information.
The Model Law is expressed in a technologically neutral manner; so that it can apply not only to existing, but also to
future, technology.
Examples
Numerous jurisdictions that have adopted legislative measures to facilitate e-commerce based their enabling
instruments on the Model Law (see, eg, in the US, the draft Uniform Electronic Transactions Act (hereafter referred to
as ``the UETA'' (1999).
This Act has been closely modelled on articles 2(a) and (f), 4, 5, 6, 7, 8, 9, 10, 11, 14 and 15 of the Model Law; see
also the Australian Electronic Transactions Act 1999; and the Canadian Uniform Electronic Commerce Act 1999
(available at <http:// www.law.ualberta.ca/alri/ulc/acts/eueca.htm>) (assented to on 13 Apr 2000); see Ontario's Act
with Respect to Electronic Information, Documents and Payments (Bill 70 2000);
Singapore has adopted the Electronic Transactions Act 25 of 1998, based on the Model Law. International
organisations have also played an important role in policy formulation (see the Global Business Dialogue on Electronic
Commerce, available at <http:// www.gbde.org>)).
,STUDY UNIT 2
Introduction to the Internet: overview and major role players
INTRODUCTION TO THE INTERNET
ORIGIN OF THE INTERNET
The Internet is a global network of computers that all speak the same language, a ``digital Esperanto'' of zero's and
ones.
The Internet is made up of a shared infrastructure namely a network of networks that all use the same protocols.
The ``TCP/ IP'' protocol is used in the United States, and the ``Open Systems Interconnection'' (OSI) protocol is used
in Europe.
The Internet came into being in the United States in 1969, for strategic military purposes.
The development of ARPAnet the first interlinked network of 40 computers enabled the American Defence
Department to simultaneously dispatch orders to all ballistic missile bases. The basic principles that guided the
development of the first network in the 1960's still apply today.
These networks link computers throughout the world through several means of telecommunication, such as telephone
and coaxial cables, fibre-optics and satellites. The best-known category of communication over the Internet is the
World Wide Web.
The World Wide Web (WWW) is at the moment the most popular way of gaining entry to the Internet.
The Internet consists of a world wide association of computers and infrastructure that makes communication possible.
The WWW is a part of the Internet consisting of interlinked data that makes communication on the web possible by
using a specific Internet protocol called HTTP.
In order to access information on the WWW a user needs an Internet browser like Netscape Communicator or Internet
Explorer which provides the means for finding and reading information on the web.
Each website has a unique web-address where the information hosted on that site may be found. In order to find
information, the user therefore needs to have or find the correct address.
Search engines, like Google (http:// www.google.com) provide a quick and efficient way to find relevant addresses on
the Internet.
An address will usually look as follows: http://www.msn.co.za. Several other communica- tion applications are also
available to the user, namely e-mail (electronic mail), Telnet, FTP (File Transfer Protocol), Gopher, Mailing Lists,
Discussion Groups (such as Newsgroups) and Internet Relay Chat. core infrastruc- ture The core infrastructure of the
Internet consists mainly of routers (computers designed to receive and transmit data), hosts (computers which store
programs and data), and pipes (telecommunication links between the routers and hosts).
2 2.2 INTERNET ROLE PLAYERS
MAIN PLAYERS
The main players in the Internet context are infrastructure and network providers, content providers, administrators,
access providers (commonly, and perhaps less accurately, known as Internet Service Providers (ISPs), or, more
accurately, as Online Service Providers (OSPs)), navigation providers, and transaction facilitators.
, 10 2.3 CONTRACTUAL RELATIONSHIP BETWEEN PARTIES
A number of contractual relationships may be created by and between parties using the Internet, ranging from
agreements to provide infrastructure, to provide access to the web, hosting material to commercial agreements
between users.
INFRASTRUCTURE PROVIDERS.
These entities provide the basic infrastructure which makes communication on the Internet possible.
The first type of infrastructure needed is communication lines such as telephone or data lines which link the various
computer systems to one another.
These services are usually provided by world-wide telecommunication companies such as Telkom. The agreement is
a composite agreement including lease, service and a contract for the use of the infrastructure.
INTERNET SERVICE PROVIDERS.
These entities provide a number of services to the users of the Internet ranging from Internet access, e-mail facilities
and hosting of websites.
- Mainly service agreements ( locatio conductio operis) in terms of which the service provider provides the services
agreed upon at a price agreed upon.
INTERNET CONTENT PROVIDERS.
These entities provide information on the web to users of the Internet.
There are a great variety of content providers, some charging fees for access or use of their sites, whereas others
provide free access but make their money from selling advertising space on their websites.
INTERNET BUSINESSES
Today there are a host of websites where transactions can be concluded online between the Internet business and
clients.
The rights and duties flowing from the contract concluded between the business and client will be determined by
establishing the naturalia for that contract as well as the agreement itself.
Many sites also make use of standard terms and conditions which are included by reference or through so- called
click-wrap.
Any relationship between Internet role players will be determined by the contractual relationship between them.
In the law of contract, relationships between contractual parties are determined first and foremost by the agreement
between the parties themselves.
However, there are certain specific contractual types and relationships for which the common law has developed a
number of specific rules - Naturalia which will apply to the relationship of a specific contract type unless the parties
have made another arrangement in their agreement.
It is therefore important to establish what kind of contractual relationship one is dealing with.
Freedom Of Contract In the South African law of contract, the principle of freedom of contract plays a fundamental
role in the flexibility and adaptability of this part of the law. This principle means, inter alia, that the parties have a large
degree of freedom in structuring any contractual relationship according to their wishes and needs. This also holds true
for the contractual relationships that may be concluded in respect of Internet services and cyber trade.
