Due: June 1, 2004 M. Shamos

General homework policies are the same as those of Electronic Payment Systems, 20-763, which you may read at http://euro.ecom.cmu.edu/program/courses/tcr763/admin.shtml.

All homework must be submitted as a Microsoft Word file with extension .doc by email to shamos@cs.cmu.edu. The filename should contain your name.

Whenever a problem seems to call for a yes or no answer, you must answer “yes” or “no” AND provide an explanation for your answer. Failure to explain will result in a zero for the question.

This homework is worth a total of 300 points.

Problem 1. [100 points] Hiller & Cohen Chapter 1, problem 3, page 22.

Problem 2. [100 points] Hiller & Cohen Chapter 1, problem 7, page 23. In addition, compare and contrast the Beer Nuts case with the Beer Across America case discussed in class.

Problem 3. [100 points] International Jurisdiction

Following the passage of the European Distance Selling Directive, the United Kingdom enacted The Consumer Protection (Distance Selling) Regulations 2000, which provide that, with certain exceptions, consumers in the U.K. who buy goods over the Internet have a period of seven days in which to cancel their order for any reason.

Alice is a resident of London who is a “consumer” under the definition in the Regulations. Bob is a merchant in Pittsburgh who sells stuffed toy animals over the Internet. Bob has never done any business with the U.K. before and has no place of business, employees or property in the U.K. Alice has never been to the United States and has no connection with the U.S. except for the transaction below.

Alice ordered $1000 worth of toys from Bob over the Internet on April 10, 2004. She paid Bob by PayPal. On April 11, 2004, Bob shipped the toys to Alice by handing them over to United Parcel Service for International Delivery. On April 14, 2004, Alice received the toys. On April 15, 2004, without opening the package, Alice decided that it was silly to spend that much money on toys and she sent an email to Bob canceling the order. The email satisfied section 10(4)(d) of the Regulations.

Bob is very upset. He does not have a policy that allows returns. Furthermore, from Alice’s email he understands that there was nothing wrong with the toys but Alice just changed her mind. He sends the following response to Alice: “I regret that we do not have a return policy. Under the circumstances, we cannot refund your money. You may therefore keep the toys.”

Alice wants her money back, so she has conversations with a solicitor in London and an attorney in Pittsburgh.

(a) [40 points] Is Bob subject to the Regulations? Discuss why or why not. You can and should use the “Bases of International Jurisdiction” discussed in class to analyze this problem, along with any other sources you may find.

(b) If Alice sues Bob in Pittsburgh, should she succeed in recovering her $1000? Explain why or why not.

(c) If Alice sues Bob in London, assume she will succeed in obtaining a judgment that she can return the toys and Bob must refund her money. She returns the toys to Bob at her own expense and tries to sue Bob in the U.S. to recover her $1000, using the U.K. judgment as the basis of her suit. Should the U.S. courts enforce this judgment against Bob by sending the sheriff to seize Bob’s property to satisfy the debt?

In answering these questions, you must use legal reasoning from the book, the lectures or other sources. DO NOT answer based on how you feel the case should turn out. We are dealing with a specific set of regulations and international law, not you personal sense of fairness.