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Welcome to our law firm's January 2013 Newsletter! Please take the time to read the article and contact us should you have any questions or concerns.


Law Offices of Salar Atrizadeh

Online Transactions and Associated Protections 

In order for retailers to take advantage of the benefits of online transactions, they must familiarize themselves with the legal implications of e-commerce. With constantly changing state and federal regulations, it is important for online retailers to keep track of the legal standards that govern online sales and purchases.


Since online sales constitute taxable income, businesses are required to pay income tax on all revenues from Internet sales. The income tax also includes international sales because the Internet is a global forum. Businesses may be required to charge sales tax for online transactions if the business maintains a physical presence within a state that charges online sales tax.


In order to complete online transactions, customers typically provide payment information electronically. Accordingly, online retailers should have protections in place to ensure that hackers cannot gain access to the customers' personal information database. Businesses should ensure that employees have restricted access to this information as a further precaution. Most states have implemented laws that require retailers to report any breach of security to customers and respective law enforcement agencies.


Businesses that utilize cloud computing must take note of further legal implications. Online retailers may use application service providers to process customer information, such as credit card payments. In this case, the customer information is stored remotely rather than on the retailer's own internal network system. Therefore, it is important for online retailers to be aware of the legal implications involving customer privacy and cloud computing during online transactions.


Specific federal and state regulations aim to protect consumers in online, mail order, and door-to-door transactions. The Federal Trade Commission authorizes consumers to cancel a door-to-door sale that exceeds $25 within three days, without a penalty. Further, consumers may also be able to cancel sales completed by mail, over the telephone, or online, within thirty days as long as the retailer has not filled the order. This law intends to protect consumers against sellers who accept the purchase price, but fail to deliver the merchandise. In certain states, consumers also have the option of cancelling in-home purchases. This law aims to shield consumers from door-to-door retailers who may apply additional pressure on the buyer in the his or her home. Typically, the law requires the consumer to send the seller a written cancellation notice within three days. Upon a cancellation, the seller is required to return any deposit or down payment that secured the transaction. Although the seller is required to refund the entire amount, the seller does not have an obligation to do so immediately. The length of time that a seller has to return the amount will depend on the applicable state laws. Additionally, the buyer must return any merchandise received as part of the transaction to the seller.


At the Law Offices of Salar Atrizadeh, we guide our clients in legal matters by using extensive knowledge and skills to create innovative solutions. Please contact us today to set up a confidential consultation.

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