Operating an online business means that it’s possible that anyone in the world may be able to access it. This is good for business, but this is also where it gets tricky from a legal perspective. If you are possibly providing goods or services to everyone in the world, you’ll need to start considering all the laws in the world too. So which law will override the other? This article will provide a few points on the governing law, jurisdiction and the conflict of laws.

The Dilemma

International online transactions pose a dilemma when it comes to disputes as various laws may apply to each transaction. The laws may vary according to several factors. For example, the parties’ location or the location of where the legal issues may have arisen. When it comes to goods, another location that may be considered is the place from where the goods are delivered.

Making the Governing Law and Jurisdiction Clear

In most instances, online businesses take the necessary steps to draft business terms and conditions for their website. These terms and conditions should have the relevant clauses that note down the governing law and the jurisdiction that will be used for each transaction. The governing law refers to the laws that will apply to the transaction. The jurisdiction refers to the court where a dispute may be heard if one were to arise. If there are no business terms and conditions, parties to an online transaction may need to fork out extra legal costs in simply determining the above issue.

Overseas Laws May Still Apply

Despite an express governing law provision, it is still possible that the laws in another country would apply to an online transaction. This may relate to the legality of the goods or services on offer. It is helpful to include terms in your business terms and conditions that place the responsibility on your customer to ensure it is lawful to access your online business in their country.

Overseas Judgments in Australia

If a matter were heard in an overseas jurisdiction, the Foreign Judgments Act 1991 (Cth) (the Act) allows for certain foreign judgments to be enforced in Australia. A number of countries allow for registrations of judgments. Once a judgment is registered, there is a possibility to enforce the judgment domestically as well. This is important to know in case a party brings an action against you in an overseas jurisdiction. Some countries in the Act include the United Kingdom, New Zealand, Japan, Korea, Singapore, France, Italy and Germany. To register an Australian judgment overseas may be more difficult. A lawyer in the country where the judgment is to be registered will be needed.

Key Takeaways

Online businesses operate in an area that increasingly exposes them to international transactions. The conflict of laws can be avoided using well-drafted business terms and conditions. This is often a pre-emptive approach that will help ensure that in the case of a dispute, matters can be governed by Australian law and heard in Australian courts.

Questions about how to sell goods overseas? Get in touch. 

Kristine Biason
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