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Risky business? Internet opens new markets but creates new legal risks.

Article Excerpt
For 40 years, Uncle Henry was among legendary family and friends for the buffalo summer sausage he made and marketed in his rural Montana hometown. Then one summer, his nephew came home from college, a degree in business in one hand and a laptop computer in the other. "What you need, Uncle Henry, is a Web site," the nephew said, whereupon he launched Henry's buffalo sausage into cyberspace.

Neither uncle nor nephew realized, however, the potential--and significant legal risks associated with the worldwide, Internet-based marketing of Henry's homegrown business. Few small business people do. In fact, all firms--large and small--using the Internet face new legal risks that are not yet fully developed or understood. This much we do know: By marketing his summer sausage over the Internet, Uncle Henry unwittingly exposed himself to a multitude of potential lawsuits in virtually every jurisdiction in the world.

The past 30 years brought a rapid globalization of the world's economy, first for large multi-national corporations, most recently for smaller companies with fewer resources. In the past 10 years, businesses of all sizes developed an Internet presence and began selling their wares throughout the world.

The Internet makes information available to anyone who has access to a capable computer. According to one recent study, 171 million people around the world have access to the Internet. What a market! Cyberspace has greatly expanded the sales potential of all manner of businesses--from made-in-Montana huckleberry hand lotion to buffalo sausage and beyond. By displaying its products on a Web page, a business has access to more of the world's population than it could ever hope to reach via conventional marketing methods.

But what are the risks of conducting business over the Internet?

Cyberlaw

At the American...