I. Introduction

While no one can question the fact that the law is constantly changing, n1 there are some general principles of law that have remained relatively stable over time. These principles may be applied to different types of fact patterns than in earlier years, but generally their underlying premises remain the same. How can the rapidly advancing world of technology affect these deeply imbedded principles of law? Judges, practitioners, and laymen are continuously forced to reevaluate the legal ramifications of everyday activities as the law changes. But what happens when the law does not catch up with the technology of the times?

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n1. See, e.g., Jeannette Thorel, State Income/Franchise Tax Implications of a Qualified Subchapter S Subsidiary Election, J. of St. Tax'n, Jan. 1, 1999, at 45 (recognizing changes in tax laws); Cathy Fleming, What CEO Training Tools Would You Recommend?, Credit Union Magazine, Oct. 1, 1999, at 21, available in 1999 WL 14607831 (recognizing federal and state laws are always changing); Elizabeth Rhodes, Partner Doesn't Need Owner's Title to Share Equity, Seattle Times, Oct. 11, 1998, at F1 (discussing changes in domestic partnership law).
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Agency law is a category of law that has remained relatively constant over the years. n2 Even though agency law has different interpretations in different jurisdictions, the underlying principles are similar. n3 However, with the rapid expansion of Internet transactions, [*538] these well settled principles may not be as effective as they are for the traditional personal transactions people have engaged in throughout the years.

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n2. See J. Dennis Hynes, Agency, Partnership, and the LLC in a Nutshell 106 (1997) [hereinafter Hynes, Nutshell] (noting that while the laws of agency are not completely static, the basic and fundamental principles of agency law will remain "viable"); see also J. Dennis Hynes, Agency and Partnership 10 (4th ed. 1994) [hereinafter Hynes, Agency] (indicating the American Law Institute's Restatement (Second) of Agency is relied upon by many courts as an important source of authority on agency law).
n3. See Hynes, Nutshell, supra note 2, at 3 (noting "there is considerable agreement among lawyers and judges with regard to the basic terminology and principles of... agency law"); infra notes 43-61 and accompanying text (discussing general principles of actual and apparent authority in agency law, and demonstrating a relative consistency in these principles in various jurisdictions).
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[O]ne of the major elements of consumer purchases is missing in Internet transactions. This is the face-to-face contact that has formed the basis of so many transactions. n28 With that element missing, the key element of trust is also missing. Can it reasonably be said that consumers transacting over the Internet place the same amount of trust in a seller on the Internet as they do with a merchant with whom they have discussed the matter in person? One of the advantages of the traditional face-to-face transactions is that goods are usually exchanged in a physical place. n29 A consumer has a fairly reliable sense that she will have some recourse if there is a problem with the transaction. She has a "store" to go to or she at least has some idea of where to begin looking to reach the seller. n30 This same advantage is not always present with Internet transactions. n31
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n28. See Froomkin, supra note 15, at 136 (listing the problems associated with Internet transactions, including the lack of a face-to-face relationship which affects the seller's ability to get an assurance of payment and the buyer's ability to confirm the identity of the seller and to demand a receipt).
n29. See id. at 139 (noting face-to-face transactions are exchanged in a physical place, which gives the buyer the knowledge of where to go if she has a problem subsequent to the purchase).
n30. See id. (noting there is the possibility the buyer can have the seller's physical place "attached" if the seller refuses to provide a refund or replacement in the case of a transaction that has been unsatisfactory to the purchaser).
n31. See Ellsworth & Ellsworth, supra note 5, at 49 (noting the consumer does not necessarily know the physical location of a company that has an Internet site).

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Internet commerce, especially information commerce, may lack the "packaging to help identify the sender after the goods are delivered." n32 Some of these sales may be of significant value and others may be minimal. Confusion as to liability arises here. For instance, "providers of information on the World Wide Web might choose to charge a fraction of a penny to each person accessing their pages. Browsers may be configured to pay these charges, up to a predefined limit, without ever troubling the user." n33 Does giving the browsers the right to charge for the seller's services create some type of agency relationship?

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n32. Froomkin, supra note 15, at 141; see also Electronic Commerce, supra note 16, at 44 (addressing the reality that "by definition, a product vendor using [Internet] Commerce has no physical presence with respect to the consumer").
n33. Froomkin, supra note 15, at 141 (footnote omitted).
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B. California

Some states have specifically dealt with the problems of consumer confusion in this area, and the possible agency relationship consequences that may follow. n131 California, for example, enacted section 17358(d)(2)(A) of the California Business and Professions Code in 1997. The law provides in relevant part:
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n131. While California is the only state that currently has a statute dealing directly with issues involving consumer confusion, the federal Lanham Act provides some consumer protection indirectly by providing companies with the right to sue another company that infringes on its trademark by advertising on the Internet. See 15 U.S.C. 1114 (1994); see also Data Concepts, Inc. v. Digital Consulting, Inc. 150 F.3d 620 (6th Cir. 1998) (providing an example of how the courts enforce the Lanham Act, as well as Tennessee's own statute outlawing "dilution of a mark" (Tenn. Code Ann. 47-25-512 (1999)) in an effort to provide protection to companies, and also constructively protect consumers who are misled by and have reasonably relied upon a company's unauthorized use of another company's mark, logo, or symbol); Ga. Code Ann. 10-1-393.5 (Supp. 1999) (illustrating another state statute that indirectly protects consumers who use the Internet through a fair business practices act which prohibits the Internet activity of "engag[ing] in any act, practice, or course of business that operates or would operate as a fraud or deceit upon a person, organization, or entity....").
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(2)(A) The disclosure of the legal name and address information shall appear on any of the following: (i) the first screen displayed when the vendor's electronic site is accessed, (ii) on the screen on which goods or services are first offered, (iii) on the screen on which a buyer may place the order for goods or services or (iv) on the screen on which the buyer may enter payment information, such as a credit card account number. The communication of that disclosure shall not be structured to be smaller or less legible than the text of the offer of the goods or services. n132

California may be ahead of many other states in consumer protection. For example, New York has no comparable law addressing [*560] the topic. n133 Even though California does address the high risk of confusion among Internet consumers, it does not specifically address the issue of agency relationships and the possibility of apparent authority existing if the seller of the product is not clearly identified and businesses are not clearly separated and distinct on the web site. n134

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n132. Cal. Bus. & Prof. Code 17538(d) (West 1997).
n133. See supra notes 17-18 and accompanying text (noting the need for governments to generate regulations in this area and discussing legislation that California has promulgated towards that end while noting New York has failed to enact any such legislation).
n134. See Cal. Bus. & Prof. Code 17538(d) (addressing an array of issues from providing the address of the vendor to the font size required for the disclosure of company information, but failing to address agency relationships or separation of business logos on web sites).
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In addition, there is an absence of case law on the California statute, making it difficult to predict how effective it will be and what modifications are needed to properly address the legal issues arising with respect to advertising and consumer transactions over the Internet. n135

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n135. At the time of publication, extensive research did not reveal any published case law providing guidance in applying California's "consumer confusion" law, section 17538 (d) of the California Business & Professional Code.
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C. United Nations Commission on International Trade Law On an international level, in 1996, the United Nations Commission on International Trade Law (UNCITRAL) developed a model law that makes the use of electronic commerce for international contracts legally enforceable. n136 In an effort to protect customers, the UNCITRAL model law provides that its law does not supercede any other law intended to protect consumers. n137 This leaves local law as a primary source of consumer protection. In addition to complying with the requirements of the UNCITRAL model law, merchants doing business electronically will need to be mindful of local laws which protect consumers. n138 While the UNCITRAL law deals with, and offers protections for, "the legal enforceability of electronic ensuring methods for commercial transactions, it does not specifically treat the surrounding issues." n139

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n136. See Powell, supra note 22, at 15 (discussing UNCITRAL's model law, which "supports the commercial use of international contracts in electronic commerce").
n137. See id.
n138. See id. (noting "electronic merchants will have to take into account local consumer protection legislation"). As an example, the European Union has adopted a Distance Selling Directive that provides a seven-day cooling-off period from delivery of the goods or services. See id.
n139. International Chamber of Commerce: General Usage for International Digitally Ensured Commerce, 37 Int'l Legal Materials 714 (May 1998).
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[*561] Like California, UNCITRAL is ahead of many jurisdictions with respect to modifying existing law and creating new law to adapt to the changing world of consumer transactions, especially transactions over the Internet. n140 Also, like California, UNCITRAL apparently has not come up with an adequate solution. n141 Although it is necessary to create laws that support international contracts and contracts over the Internet, it is also necessary to modify local consumer protection laws to conform with the new electronic contracts. n142 Without such modification, the laws proposed by UNCITRAL may be inconsistent, ineffective, or cause even more confusion. n143
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n140. See supra note 130 and accompanying text (showing there are no states other than California that have enacted statutes dealing directly with consumer confusion).
n141. One commentator readily points out that the question of "Who is going to police the actions of users [over the Internet]?" still remains unanswered. Mougayar, supra note 19, at 66.
n142. See Powell, supra note 22, at 14-15 (explaining the problems arising in applying national contract law to contracts created over the Internet and that rules in existence providing consumers with protection will not be trumped by the UNCITRAL model law, implying a need for these two types of laws to support electronic contracts).
n143. The status of in personam jurisdiction with respect to Internet cases serves as an excellent example of the problems that may arise when there is a lack of uniformity in the laws regulating Internet commerce. See Eric Schneiderman & Ronald Kornreich, Personal Jurisdiction and Internet Commerce, 217 N.Y.L.J., June 4, 1997, at 1. Commentators have described that situation as "inconsistent and incoherent on several levels." Id. at 4.
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VIII. Conclusion

As transactions and advertising over the Internet become more and more prevalent, the law as it exists in many areas, such as agency, must change to accommodate the new issues that are arising. Advertising is a powerful tool and many consumers rely on the reputation of companies, and the images and feelings their products evoke, when deciding whether to purchase a product or service. As personal, face-to-face transactions become a thing of the past and "big name" companies put their world-known logos next to the name of an "unknown" company while advertising their support of the company, consumer confusion increases. Many consumers may reasonably believe the two companies are related or are one and the same and, in turn, reasonably rely on such representation. As traditional agency principles dictate, the question is not whether the alleged principal and agent entered into an agency relationship, but whether the principal has created the representation to a third party that such a relationship exists and whether the third person - here the consumer - justifiably relied on that representation to his or her detriment. It is has been established that such apparent authority can be created through the use of advertisements, especially when those advertisements are national in scope. n168 It has also been found that apparent authority can be created through the Internet, especially when advertisements are used. n169 Given the current case law and traditional agency principles applied in that case law, there is [*566] a threat that the finding of apparent authority, and in many cases liability attaching by reason of that apparent authority, may become much more prevalent because of the easy accessibility to advertisements and products over the Internet. This may or may not be justifiable, but under current principles of law, it is nevertheless a reality. Whether or not these principles need to be changed is an issue for both the courts and the legislature to address, and without such a change, well-known companies may be subjecting themselves to liability by supporting and sponsoring less-known companies, whether or not they intend to do so.
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n168. See supra notes 62-76 and accompanying text (discussing apparent authority as it applies to advertising).
n169. See supra notes 89-128 (discussing the psychological effects of advertising and how these effects may create agency liabilities for a "better known" corporation that allows a "lesser known" corporation to advertise on its web page).
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