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E-Commerce is different. In the world of cyberspace retailing, you want to reach out to as many customers as possible. As the Amazon.com phenomenon shows, a successful website can have customers all over the world. What state has jurisdiction over an electronic contract entered into by an e-tailer operating in Connecticut, having a web server in Arkansas, with a customer in Arizona? The cyber-retailer would argue that C o nnecticut has exclusive jurisdiction over any dispute, while the customer would argue for Arizona. The location where a suit can be pursued is of critical importance, especially where the amount in dispute is small. If an Arizona customer with a $500 dispute is required to sue in Connecticut, the matter will likely be dropped. The best way for an online retailer, or any business that sells on the Internet, to limit exposure, is to provide a "click wrap" agreement, a written statement of terms and conditions that the customer "accepts" by affirmatively clicking on a button that says By John Heckman "I accept," "I agree" or words to that effect. The Terms and Conditions statement should include a provision by which the customer agrees that the Connecticut Superior Court or the Federal District Court for the State of Connecticut shall have exclusive jurisdiction over any disputes. (Assuming your business is located in Connecticut.) While this is by no means a guarantee that a lawsuit could not be brought in another state , it will improve the chances of contesting jurisdiction and may act as a deterrent to litigation. What else should a Terms and Conditions statement contain? It depends on what your site has to offer. If it is a retail site, you should post your warranty and return policies. Consideration should be given to limiting your liability by disclaiming all express and implied warranties, to the extent allowed. The right to do this varies from state to state. If you provide chat rooms or message boards and do not monitor messages, you want to state that and disclaim liability for erroneous or slanderous information. If you provide original content (material created by or belonging to you), you want to affirm your intellectual property rights in the material. If you provide material for downloading, you want to limit your liability for viruses and other computer problems that may result from the downloading. If you link to other sites, a disclaimer as to the content found on that site should be included. You have to consider your business model in preparing the Terms and Conditions statement. If you promote the site as consumer-friendly, you should not have inconsistent return or warranty policies. The law in this area is evolving. Just as you should not browse the Internet without adequate virus protection software, you should not risk your online business by failing to have clearly stated policies. |
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Francis G. Pennarola is a member of the law firm of Chipman, Mazzucco, Land & Pennarola, LLC in Danbury. He regularly represents clients in the IT, website development and advertising fields. |
If you enter into a contract in the state
of Connecticut with another Connecticut resident or business,
and a dispute arises concerning the meaning of a term or the
adequacy of performance, it is almost a certainty that jurisdiction
for the resolution of the dispute lies with the Connecticut courts.
The same is true for the other 49 states. There are exceptions,
of course, like where performance of the contract is called for
in another state.