Like this article? PLEASE +1 it! Evan Signature
Evan Carmichael Top Header
Share for a Cause









Franchising and Ontario's Electronic Commerce Act

Written by: Peter Macrae Dillon

Article Overview: This article examines the impact of Ontario's Electronic Commerce Act on franchise systems operating in Ontario. Franchisors in the US have had the benefit of similar laws for some time now. peter macrae dillon Siskinds franchise franchisor franchising lawyer attorney Toronto Ontario Canada

Free Download - Recent Issues of Importance in Franchising -- Franchise Lawyer Canada By Peter Macrae Dillon
Name: Email:

Franchising and Ontario's Electronic Commerce Act

The Electronic Commerce Act ("ECA") received Royal Assent on October 16th and will, with out a doubt, impact your Ontario franchise system.

The purpose of the law is to provide a legal backbone to all of the electronic commerce currently being conducted in Canada (Canada is the world’s second-largest Internet user, after the United States). It accomplishes this by setting out rules for conducting business transactions electronically. What follows is a brief overview of some of the highlights of the ECA.

Voluntary

Of course your business does not have to be conducted in electronic form. No one is required to use, provide or accept documents or information in electronic form without their consent. Therefore, a contract based entirely on an electronic document may be invalidated by the absence of consent of one of the parties. Undoubtedly, the consent issue is an issue that Internet businesses should be keenly aware of when dealing with unsophisticated internet customers.

Electronic Functional Equivalents

The ECA establishes a series of rules allowing for the substitution of electronic equivalents to such basic contractual requirements as signatures and the exchanging and retention of documents in writing, including originals. However, for an electronic agreement to become enforceable under the ECA, it must have been provided to the person signing it and must be capable of being retained by that individual. Please note that the posting of a document on the website of one of the parties is not retention for purposes of the ECA.

Error Correction Mechanism

The ECA allows for an individual, who makes a material error in a transaction, to abandon the transaction and to return or destroy any consideration received. The transaction must have been implemented by an “electronic agent”, such as a computer program that operates without immediate human review of the documents. It would be smart e-business practice to give customers a clear opportunity to review and correct errors in their on-line orders.

Signature

Although electronic signatures are now binding, we do not yet have a comprehensive definition of what constitutes an electronic signature. Furthermore, there may be regulations that prescribe certain reliability and technological requirements. And, although the importance of being able to rely on a signature seems obvious, the ECA determines reliability by considering the circumstances, the purpose of the document and the timing of the signature. Until further elaboration has been provided by law or by the courts, we recommend the use of a scanned electronic signature, replicating the signatory’s “real” handwritten signature.

Assurances

The ECA requires a “reliable assurance” that the information is complete and unaltered. However, the reliability of that assurance can vary depending on the document’s purpose. Obviously, such vague criteria will be ripe for litigation.

In and Out Box

The ECA sets out rules that establish the time and place a contract is deemed to have been sent and received. This may affect the when and where of establishing the time and place a contract was formed. The concern here, of course, is that this could affect which laws govern the contract. A parties location for an electronic transmission is deemed to be their place of business or, if none, their place of residence. An electronic document is considered sent once it leaves the sender’s control and is considered received once it is capable of being retrieved and processed by the recipient.

Other Sectors

In addition to its application to the private business sector, the law will also apply to government and other public sector agencies. Provincial governments, agencies, municipalities, and local boards are permitted to deal with information and documents electronically and to make or receive electronic payments. They may not, however, require citizens to communicate electronically.



peter macrae dillon Siskinds franchise franchisor franchising lawyer attorney Toronto Ontario Canada

Related Articles
  Do you Know What The “e” Stands For In e-Commerce?
  Newsworthy Trends in Franchising
  E-Commerce: It's Time to Get Connected
  III. E-COMMERCE AND SMALL ENTREPRENEURS
  The Top 7 reasons why Franchising is Better than a Brand New Business

Home > Franchises > Peter Macrae Dillon > Franchising and Ontarios Electronic Commerce Act
Article Tags:

About the Author: Peter Macrae Dillon
RSS for Peter's articles - Visit Peter's website

Peter Macrae Dillon is one of North America’s leading and most-respected franchise attorneys. He is licensed to practice law in Ontario and New York. He specializes in advising start-up franchisors in the conversion and early stages of franchising. His group represents mature Canadian and American franchise systems operating in Canada, the United States, and internationally. Email Peter at peter.dillon@siskinds.com or visit his website at: www.franchiselaw.ca peter macrae dillon franchise franchisor lawyer attorney Toronto Ontario Canada www.franchiselaw.ca

Click here to visit Peter's website
Dashed Line

More from Peter Macrae Dillon
Recent Issues of Importance in Franchising Franchise Lawyer Canada
Franchisor Best Practices
What Does Common Law Mean
A Comparative Look at the Definition of Franchise
Taxation of NonResident Franchisors in Canada


Related Forum Posts
Re: Re Franchise etc Re: Re Franchise etc - [quote="bmueller47":e0j0nu4t]Can you see a shift of various types of franchises? What I am thinking about is that today it is more difficult to create franchises, that has great appeal. More and more people want to have their business, but no interference of someone else.[/quote:e0j0nu4t] Not sure what you mean exactly but it is certain that more and more people want to have their own business but not more and more people know what they really want to do, or how to do it. And that's what franchising is all about. Franchising is not for an entrepreneur. An entrepreneur will do his own thing. People who buy franchises want a turn key business, with a proven model. Franchising in the US had never been that good. I don't have the exact numbers in mind but I know for sure that franchising is growing more and more as people are getting more and more aware of this business model.
Franchising vs. Licensing? Franchising vs. Licensing? - What is your opinion on Franchising vs. Licensing? Which is better?
Nominations for a new Franchising Moderator! Nominations for a new Franchising Moderator! - Is there anyone you'd like to nominate as our Franchising Moderator (or volunteers for the position)?
Great Article, chock full of info. Great Article, chock full of info. - Ian, Thank you for linking your article regarding Licensing vs Franchising. Its a good read.
SecondLife Statistics SecondLife Statistics - Here are some statistics on SecondLife's growth: Second Life citizenship grew 995% just this year. Commerce, a more important statistic, rose to $9M, up 287% this year The male/female split is close to even -57 to 43% Finally, more than 55% of citizens hail from outside the US. I tried it out but don't get why it's so exciting - it takes so long to learn how to play and get used to all the settings.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.



Featured Article


Bottom Footer
Share for a Cause












Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Name:
Email:
Popular Articles

Multilevel Marketing: 4 Tips To MLM Success

Sales Courage and Resilience

Ten Steps to Go from Idea to E-book for Sale

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.