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1. The concept of "privity of contract" applicable in common law countries simply states the obvious. That is, that the contract cannot bind persons who are not party to it. This means that if a party sells outside the jurisdiction any action for breach of contract must be against that party, not against the buyer.
2. This does not mean that someone circumventing geographical restrictions is not possibly facing any liability. In some countries at least they may be flirting with criminal liability such as fraud in addition to any civil liability. The situation is simply too confusing and case law seems to be non-existent, so the position is far from clear.
3. In the case of internet sales, I doubt a party to the contract would even be in breach of any reasonable contractual term only because someone outside the region managed to purchase from them.
4. Like much in the electronic world, I think a breach will only occur if the party concerned is deliberately selling outside the region, or is so recklessly indifferent that they do not take reasonable measures to prevent such sales.
5. Both parties probably exploit the uncertainty about what measures need to be taken. If the party concerned implements some form of geo-blocking on its servers, so that customers outside the region must take deliberate steps to evade the operation of this software (eg; vpn, proxy, dns service), could they still be in breach? What about if such a customer also has to give a false address etc?
6. I doubt most present distributors are in breach of their contracts, though I also suspect that they will or are coming under increasing pressure to take ever more draconian (and unreasonable) steps to stop selling outside the relevant region.
7. The problem is such a difficult one that it is already on the political agenda. Because geographic restrictions are so ineffective, technically at least, rights holders likely will, if they have not already, call for legislative intervention.
8. We should not lose sight of the fact that, like many actions that rights holders propose, this would be for the purpose of doing what they see needs to be done to protect their own "rights" and preserve existing business models and structures. Private rights, not public rights, though lobbyists do often seek to frame their cases in terms of the public interest, often with absurd results.
9. Even if sales do take place outside the region which are breaches of the contract, are the breaches so serious that the contract can be terminated? Otherwise, what damage has occurred? How is the non-breaching party compensated for such breaches?
In short, we have a hornet's nest. I really doubt the system of selling rights by region can last for goods delivered electronically. It's best chance of survival in the longer term is draconian legislation by multiple nations, probably by International Treaty. Not impossible, but not likely. And not necessary. I see no public interest.
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