Nowadays, business transactions have become easier with the use of the Internet and online platforms. To protect consumers in these transactions, and to also regulate businesses, Canada has enacted various statutes which compose the country’s e-commerce law.
What are the e-commerce laws of Canada?
E-commerce, or the business activities involving selling and buying of services and goods over the internet, is governed by numerous Canadian laws. This is in addition to other transactions that can be done online (e.g., government transactions).
Canadian e-commerce laws may be divided according to its coverage, namely federal or provincial/territorial laws. Businesses engaged in e-commerce may find that they fall under both levels of the law.
Federal e-commerce laws
While there is no single federal law specifically covering e-commerce, other federal laws may still govern e-commerce.
These laws include:
- Personal Information Protection and Electronic Documents Act (PIPEDA)
- Canada’s Anti-Spam Legislation (CASL)
PIPEDA and CASL mainly revolve around the protection of privacy of Canadian consumers. This includes the protection of their personal information and the need to get prior consent before engaging them for any e-commerce activities.
For the specifics on anti-spam laws, read our article on CASL.
Provincial or territorial e-commerce laws
Each province and territory of Canada has enacted their own Electronic Commerce Act which governs electronic transactions and e-commerce. Some examples would be Ontario’s Electronic Commerce Act, and British Columbia’s Electronic Transactions Act.
These Electronic Commerce Acts are mostly modeled from the Uniform Electronic Commerce Act, which implements the principles of the UN Model Law on Electronic Commerce.
In addition, most of these provinces and territories have their own Consumer Protection Act, which will also affect the conduct of e-commerce by businesses. For instance, Québec has the Consumer Protection Act; other provinces have Acts with similar titles, such as Manitoba’s The Consumer Protection Act.
Determination of jurisdiction
When e-commerce cases or disputes arise, Canadian common law provides for several tests to determine if a Canadian court has jurisdiction over the issue:
- Passive v. Active test: the court will examine the level of interaction available to individuals, and the court will assert its jurisdiction if it finds that interaction with the website was possible (active sense). However, the court will not exercise its jurisdiction if it finds that the website was accessible only in a passive sense.
- Purposeful direction test: the court will examine whether a website’s presence or overall strategy is “purposefully directed” towards individuals or Canadian citizens; if it does, the Canadian court will exercise its jurisdiction over the issue.
- Foreseeability test: if any of the parties have reasonably foreseen that they could be subjected to a foreign court – such as a Canadian court – then such court can exercise jurisdiction over such issue.
However, this would be subject to the agreement or contract of the parties. If such an agreement or contract indicates for a specific court, country, or jurisdiction which will hear and try the case, that must be followed.
How these tests apply will depend on the facts and the circumstances of each case. Consult with a computer & IT lawyer to see whether an e-commerce dispute may be filed before a Canadian court.
How do I comply with the Canadian e-commerce laws?
There are certain considerations that businesses and consumers must remember under Canada’s e-commerce law.
From the perspective of a business owner, this video explains how to comply with e-commerce law:
To know more about Canada’s e-commerce law, consult with a computer & IT lawyer in your area. If you’re located in Québec City or in Montréal, consult a Lexpert-Ranked computer & IT lawyer in Québec.
Québécois lawyers are especially helpful since Québec’s Civil Code may also apply to e-commerce transactions and is part of the province’s e-commerce law.
Electronic contracts
There seems to be no “written contract” between a seller and a buyer in an e-commerce transaction. This is usually because of the perception that there is no paper contract signed by both parties.
However, Canadian e-commerce law states that a contract is formed in an e-commerce transaction. It is legally enforceable and must be complied with in good faith.
For instance, under Ontario’s Electronic Commerce Act, any act (e.g., offer, acceptance of an offer, etc.) that is material to form a contract may be expressed by:
- an electronic information or an electronic document; or
- an act intended to result in electronic communication: touching or clicking on an icon, or by speaking
Canada’s common law also provides that “click-wrap” agreements and “web-wrap” agreements also form a legally binding contract in an e-commerce transaction. These “agreements” happen when a user or buyer only clicks a simple button to accept the agreement or contract prepared by the seller or offeror. An example of this is clicking an “I Agree” button.
Use of electronic signatures
Canada’s provincial e-commerce law allows for electronic signatures (or “e-signatures”) to have equivalent functions as wet signatures.
For instance, BC’s Electronic Transactions Act provides that the requirement for a signature of a person is equally complied with by an e-signature. While e-signatures may be necessary to form electronic contracts, government transactions can also use e-signatures as sanctioned by the e-commerce law.
An electronically signed document has the same binding and legal effect when used in e-commerce transactions.
Consumer Protection
As part of Canada’s e-commerce law, consumers are protected by the various federal and provincial/territorial laws.
One of the main protections granted by these laws includes what is called a “cooling-off” period. This period allows consumers to cancel an internet agreement if it is still within the cooling-off period. For example, Ontario’s Consumer Protection Act, 2002 allows a 7-day cooling-off period.
To know more about Canada’s e-commerce laws, contact one of the Lexpert-ranked best computer & IT lawyers.