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Legal Implications of Technological Change in Your Business

General, News & Updates

The advent of technology has significantly enhanced our ability to communicate, both quickly, conveniently and at great distances.

Unfortunately, that convenience has also led to a degree of complacency, which can have some unfortunate legal results. Amongst other things, during my presentation at Insights 2016, I discussed the following 3 situations, where a lack of respect for technological communication has had some unfortunate results:

1.       In WA a prospective tenant negotiating a lease sent an email ending “Please proceed with wrapping this up” to the agent. Despite the fact formal lease documents were never signed, the above email was deemed to be sufficient to bind the prospective tenant to the lease.

2.       In the USA a customer entered into a commission based marketing agreement with an agent, which contained a cap on the commissions payable. After some time, the customer, corresponding over instant messenger, sent the following message “NO LIMIT”, which was responded to by the agent with the word “Awesome!” This was sufficient to waive the commission cap, resulting in a $1.2million liability.

3.       In Australia a company, not unusually, set up a corporate Facebook page. On this page customers placed testimonials about the company. It turned out some of these testimonials contained false information. A court decided that, once the company had been given notice of the false testimonials and refused to remove them, it was deemed to have made the testimonials itself, and as such fell afoul of the provisions of the Australian Consumer Law prohibiting such communications.

The main lesson to learn from these examples is that you should always treat technological communications with as much respect and attention as any other form of communication, particularly given that there is often a better record of technology based communication than there is, for example, verbal ones.

If you have any questions, please feel free to contact out ICT team here.