Jurisdictional Issues in Electronic Commerce Contracts: A Canadian Perspective

Authors

• Shafik Bhalloo

Abstract

Governments, the private sector, the media, and academicians have defined electronic commerce ("e-commerce") in a variety ways. Narrowly defined, e-commerce refers to sales or purchases transacted over open or public networks, such as the Internet, independent of whether the payment is made on the network. Employing a broader definition, e-commerce may also include sales and purchases made over closed or private networks, such as electronic data interchange ("EDI") and debit or credit cards.' This article will focus on the narrower definition of e-commerce and, more specifically, business-to-consumer ("B-to-C") transactions rather than business-to-business ("B-to-B") transactions.

In the first part of this article, the general legal framework governing the assumption of jurisdiction by Canadian courts over foreign defendants will be reviewed as a preamble to an examination of when Canadian courts may assume jurisdiction over foreign online vendors. In order to focus the analysis, the civil rules of the province of British Columbia will be used. It should be noted that each Canadian province and territory has its own civil rules and these rules equally share significant similarities and differences. Therefore, the reader is recommended not to blindly adopt the analysis of the British Columbia civil rules in this paper as authoritative in any other jurisdiction.It is recommended that the reader examine the civil rules of the specific jurisdiction in question before making any decisions to adopt or analogize from the following analysis of British Columbia civil rules.

The second part of this article analyzes the issue of when a Canadian online vendor is subject to the jurisdiction of courts far from the vendor's location. Since e-commerce in the United States has experienced hypergrowth in the past few years and the level of e-commerce in the United States has far exceeded that of any other nation since the advent of e-commerce, American courts have had much more experience in adjudicating e-commerce related disputes. American courts have had the opportunity to consider, develop, and evolve tests for assuming jurisdiction over foreign defendants in e-commerce transactions. Therefore, it is necessary to examine American law governing assumption of jurisdiction over foreign defendants in e-commerce transactions to better appreciate the exposure of Canadian online vendors to foreign courts. Additionally, Canadian online vendors are more likely to sell their products to American consumers than to consumers from any other foreign jurisdiction because Americans are the largest group of online consumers in the world. Therefore, the risk of Canadian online vendors being subjected to the jurisdiction of American courts is real and warrants discussion in this article.

The third part of this article will briefly discuss the risks to which Canadian consumers may be exposed when purchasing products online from foreign websites and the remedies available to them. The fourth and final part of this article will provide some guidelines for Canadian businesses to curtail or limit their potential liability in foreign jurisdictions when engaging in ecommerce with consumers, particularly, American consumers.

Recommended Citation

Shafik Bhalloo, Jurisdictional Issues in Electronic Commerce Contracts: A Canadian Perspective, 8 Computer L. Rev. & Tech. J. 225 (2004)