CYBER LAWS

LECTURE NO. 6:
E-COMMERCE – CONTRACTS &
CONSUMER PAYMENTS
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NAUMAN QAISER

ADVOCATE HIGH COURT

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WHAT IS E-COMMERCE?
 "Ecommerce" or "electronic commerce" is the trading of goods and services on the
internet.

 It is your bustling city center or brick-and-mortar shop translated into zeroes and
ones on the internet superhighway.

 An estimated 2.14 billion people worldwide buy goods and services online, and the
number of Prime members shopping Amazon stores globally now tops 200 million.

 Ecommerce is one way people buy and sell things in retail.

 Some companies sell products online only, while other sellers use ecommerce as a
part of a broader strategy that includes physical stores and other distribution
channels.

 Either way, ecommerce allows startups, small businesses, and large companies to
sell products at scale and reach customers across the world
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What is an ecommerce website

 An e-commerce website is your digital storefront on the internet.

 It facilitates the transaction between a buyer and seller.

 It is the virtual space where you showcase products, and online customers make
selections.

 Your website acts as the product shelves, sales staff, and cash register of your
online business channel.

 Businesses might create a branded store experience on a store like Amazon,

build their own commerce site on a dedicated domain, or do it all for a multi-
channel approach.
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What is an ecommerce business?

 An ecommerce business is a company that generates revenue from

selling products or services online.

 For example, an ecommerce company might sell software, apparel,

housewares, or web design services.

 You can run an ecommerce business from a single website or through

multiple online channels like social media and email.
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How does ecommerce work?

Ecommerce works by connecting buyers and sellers using various electronic channels.

 For example, you need

 a channel, such as a website or social media, so customers can find products and
services to purchase.
 then a payment processor enables the exchange of the goods or services.

 Once the transaction succeeds, the customer receives a confirmation email or SMS, and
a printable receipt.

 If the transaction is for goods, then the seller ships the items and sends the customer a
tracking number via email or SMS.

 If the transaction is for a service, then the service provider can reach out to schedule and
complete the service.
 Types of ecommerce
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 Ecommerce takes as many different forms as there are various ways to shop online channels. A few
common business models that shape the world of ecommerce are:

• B2C – Businesses sell to individual consumers (end-users). The most common model with many
variations.

• B2B – Businesses sell to other businesses. Often the buyer resells products to the consumer.

• C2B – Consumers sell to businesses. C2B businesses allow customers to sell to other companies.

• C2C – Consumers sell to other consumers. Businesses create online marketplaces that connect
consumers.

• B2G – Businesses sell to governments or government agencies.

• C2G – Consumers sell to governments or government agencies.

• G2B – Governments or government agencies sell to businesses.

• G2C - Governments or government agencies sell to consumers.

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Benefits of ecommerce

 Conducting sales online has some significant advantages. Among the top
benefits, ecommerce:
• Is growing rapidly
• Offers global marketing reach
• Provides the ease of ordering products online
• Generally involves lower operating costs
• Gives direct-to-consumer access
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Challenges of ecommerce

 Some businesses may try to avoid ecommerce due to challenges like:

• Limited face-to-face interaction
• Technical difficulties
• Data security
• Challenges of shipping and fulfilling orders at scale
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E-COMMERCE LAW

 E-commerce law encompasses the regulations of conducting business

electronically rather than conventional physical means.

 This includes the regulation of all retail activities conducted over the
internet such as purchasing goods, availing services, delivery, payment
facilitation as well as supply chain and services management.

 Notable examples are the end user or internet trade agreements and
consumer to business or business to business contracts
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E-commerce regulation in Pakistan

 The regulation of e-commerce in Pakistan is still in its infancy, with

government efforts to develop a framework for e-commerce activities only
recently gaining momentum.

 In recent years, the government has taken steps to address these legal issues
by establishing the E-Commerce Policy Framework, which aims to provide
a comprehensive framework for e-commerce activities in Pakistan.

 The framework includes provisions for consumer protection, dispute

resolution, and intellectual property rights – which are some of the
important the legal issues related to online transactions in Pakistan

 The government has also launched an e-commerce portal, which aims to

provide a platform for e-commerce issues.
 Lack of dedicated E-commerce law in
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Pakistan
 However, the lack of a dedicated e-commerce law, coupled with a lack of enforcement, continues
to be a major challenge for the regulation of e-commerce in Pakistan

 On the other hand, the legal framework in Pakistan for countering e-commerce fraud involves
multiple laws and regulations.

 The Electronic Transactions Ordinance (ETO) of 2002 governs the use of electronic transactions
in the country and provides a legal framework for e-commerce activities. It includes provisions
for protecting personal data, safeguarding against hacking and unauthorized access, and
preventing fraud

 Additionally, the Information Technology Act of 2000 provides a legal framework for the use of
information technology in Pakistan and includes provisions for protecting electronic records,
digital signatures, and intellectual property rights, as well as measures to prevent cybercrime and
fraud.

 The Consumer Protection Act of 2019 protects consumers against fraud and other forms of
exploitation in e-commerce transactions.
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CONTD..
 The implementation of the aforementioned laws has been slow, and enforcement remains a challenge.

 Dispute resolution in e-commerce is another important aspect of the regulatory framework. Intellectual
property rights in e-commerce are also a concern in Pakistan.

 The Copyright Ordinance 1962 and the Trademarks Ordinance 2001 provide a framework for the
protection of intellectual property rights in e-commerce. However, the enforcement of these laws
remains a challenge.

 Pakistan’s legal and regulatory framework for e-commerce is still in the process of development, and
there are currently no specific laws governing the sale of goods and services over the internet.

 Additionally, the lack of a robust infrastructure for online payments and the limited availability of
secure shipping options make it difficult for e-commerce businesses to operate in Pakistan.

 Furthermore, the country’s weak intellectual property laws also pose a challenge for e-commerce
businesses, as they are not well-equipped to protect against intellectual property infringement.
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CONTD..

 The Federal Investigation Agency (FIA) Cyber Crime Wing is the government
agency responsible for investigating and prosecuting cybercrime, including e-
commerce fraud, in Pakistan.

 These laws and regulations are enforced by various government agencies and
individuals, and businesses need to report any incidents of e-commerce fraud
and follow best practices for protection
 Areas/Laws to consider before starting e-commerce
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 There are certain areas/legal issues, which businesses should consider before deciding to start an e-commerce
business:-

 Data protection

 Payments & refunds

 Shipments and deliveries

 Consumers laws and rights

 Terms and conditions related to the website use or for any online purchase

 Laws related to online advertising

 Financial data management of online costumers

 Intellectual property rights

 Taxation

 Maintenance of written agreements

 Dispute resolution
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Issues of E-commerce in Pakistan
 Online e-commerce in Pakistan is prone to various forms of fraud, including:-
 phishing scams where fraudsters send fake emails or messages pretending to be from
legitimate e-commerce websites or banks to trick users into revealing sensitive information
like passwords and credit card details.
 Another common fraud is the sale of counterfeit products, often at lower prices but of low
quality.
 In addition, there are fake websites that are designed to look like legitimate e-commerce sites
to trick users into entering personal and financial information or making purchases.
 Payment fraud is another issue where fraudsters trick users into making payments through
fake payment gateways or steal payment information during the transaction process.
 Shipping fraud is also prevalent where fraudsters trick users into paying for goods that are
never delivered or are significantly different from
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ESSENTIALS OF A CONTRACT

 Offer

 Acceptace

 Consideration

 Contractual Capacity

 Free Consent
 Coercion
 Fraud
 Misrepresentation
 Undue influence
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Three phases of a contract

 Business transactions are usually divided into three consecutive

phases:
 The contract preparation (or information phase),
 The contract negotiation (or agreement) and
 The contract performance
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Formal and informal contracts
 In the most simple case, the performance process is fixed as well as the price.

 In that case, there is not much to negotiate. The buyer selects a product,
indicates that he wants to buy it, and the seller delivers it to him before, after, or
at the same time as the payment. This would be a type of an informal/indirect
contract, without having to actually draft a contract and then execute/sign it.

 The process becomes more complex when the price is not fixed, as in most B2B
commerce, when there are more issues to be agreed other than only the price,
and when the delivery process is complex, as in international trade.

 In that case, the contract is more elaborate, including a specification in some

form of the performance process and an indication on how disputes are resolved
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What is an E-commerce Payment System

 An e-commerce or electronic payment system enables transactions over an

electronic mode of payment without the involvement of physical money or cheques
at the time of transaction.

 Electronic payment techniques are used by e-commerce enterprises to collect

payment for their products and services.

 The procedure of conducting business online has been dramatically changed by the
e-commerce payment systems which have made it simple for both businesses and
customers.
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Payment gateway
 In e-payments, a payment gateway is used to link a virtual storefront to the payment processing network of
your choosing in an online payment system.

 When it comes to payment gateways for E-commerce websites, there’s a plethora of them out there to
choose from.

 A business must figure out which ones can be the most beneficial payment gateways and integrate them.

 It is also wise to give customers multiple options as it helps enhance and further personalise their shopping
experience.

 A robust payment gateway provides multiple secure e-commerce payment options – as listed below – to
your customers. To clear your funds, this processing network also collaborates with your bank.

 Debit, credit cards

 Online banking

 E-wallet

 Smart card

 Mobile payment
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DISTANCE SELLING

 Distance selling means selling by:

• phone

• mail order

• email

• the internet

• digital television
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Advantages of distance selling

• approaching hard-to-reach customers

• repeat orders from established customers

• reaching new markets through the internet

 Costs are far lower than if you visit customers, or have retail premises.
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Disadvantages of distance selling

• you can't demonstrate your product

• it can be difficult to convince the customer to trust you without

meeting them
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When to use distance selling

 Many businesses find distance selling cost-effective for standard products

such as books and CDs as the customer already knows what they'll be
getting.

 Distance selling can also be a very useful way of getting repeat orders once
you have built the initial relationship by meeting the customer.

 Using the telephone means that as well as prompting the customer to reorder
or buy new products, you can give customers an opportunity to ask
questions.
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Laws on Distance Selling

 Businesses using distance and online selling must comply with a range of regulations.

 Every time you sell something you make a contract with the consumer.

 If you are selling to consumers, you must provide certain basic information such as
your business name, contact details and product, delivery and pricing information.

 The customer generally has the right to return goods within a specified period.

 If your business is a limited company or limited liability partnership and you have a
website, it must show details such as your full name and geographic address.

 There are also restrictions on privacy and data protection in direct marketing, and
on email marketing to individuals.
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THANKS