Module 2
Legal validity of data messages
KSTCD Branch/HRD Section/TrainForTrade & STICT Branch/ ICT Analysis Section
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Introductory Remarks
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Legal acts
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from transactions to e-government….
Regulation as facilitation: legal certainty
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liberalise, preserve, abolition
minimum standards
international harmonisation
Validity, enforceability & admissibility
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contract formation
requirements of form
communication procedure
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Module Structure
• Communications procedures
• Contract formation
• Requirements of form
• Evidential issues
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Learning Objectives
• Understand the different legal consequences of
communications
• Recognise the potential legal obstacles to the
execution of legal acts electronically
• Understand the different approaches to law reform
to facilitate electronic commerce
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Law Reform
• UN Convention (2005)
– UNCITRAL Model law on electronic commerce (1996) and
Model Law on Electronic Signatures (2001)
• European Union
– Electronic Signatures Directive (99/93/EC), Electronic
Commerce Directive (00/31/EC)
• National
– United States (1998), Singapore (1998), Australia (1999),
Ireland (2000), India (2000), Bahrain (2002)...
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Contract Formation
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Issues
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Validity
Methods of contract formation
Incorporation of terms
Content of implied terms
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Contract Validity
• Oral contracts
– evidence, public policy...
• UN Convention, Article (8)1
– “…a contract shall not be denied validity or enforceability
on the sole ground that it is in the form of an electronic
communication”
• Exceptions?
– e.g. real estate, wills and family law
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Contract formation
• Offer
– ‘invitation to treat’ or unilateral offer?
• Acceptance
– when and where communicated?
• instantaneous communications v postal rule
• Declaration of will
– ‘electronic agents’
• e.g. Java, Active X technology
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Defining Events
• Acknowledgement of receipt
– Model law 1996, art. 14
• “…the data message is treated as though it has never been sent,
until the acknowledgement is received.”
– impact on contract formation?
• Despatch and receipt of messages
• dispatch: “when it enters an information system outside the
control of the originator”
• receipt: ‘enters designated information system’; ‘retrieved by
addressee’ or ‘addressee information system’
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Incorporation of Terms
• Basic principle
– terms need to be brought to customer’s attention before
the contract is concluded
– subject to mandatory rules of law
• e.g. consumer protection rules
• Model law 1996, art. 5bis (1998)
– validity: “merely referred to in that data message”
• Case study: Web site
– placement of links
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Implied Terms
• Differing national standards
– quality, fit for purpose, delivery, information obligations,
exclusion clauses…..
• UN Convention on Contracts for the International Sale of Goods (1980)
• Jurisdictional issues
– governing law & jurisdiction
• Hague Conference on Private International Law
– identity and location
• export/import restrictions
• regulated activity, e.g. pharmaceutical products
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Requirements of Form
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Writing
• Statutory definitions
– e.g. UK Interpretation Act 1978: “…in visible form..”
– EU Distance-selling Directive
• art. 5(1) “...in writing or on another durable medium available and
accessible to him...”
• Judicial interpretation
• UN Convention, Art. 9(2)
– “if the information contained therein is accessible so
as to be usable for subsequent reference”
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Signatures I
• Legal requirements & practice
• Statutory definitions
– copies & equivalents
• “‘signature’ includes a facsimile of a signature by whatever process
reproduced”
• Signature functions
– identity
– intention to be bound
– validate integrity of document
• person to signature, signature to document
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UN Convention, Art. 9(3)
Where the law requires that a communication or a contract should be signed by a party,
or provides consequences for the absence of a signature, that requirement is met in
relation to an electronic communication if:
(a) A method is used to identify the party and to indicate that party’s intention in
respect of the information contained in the electronic communication;
and
(b) The method used is either:
(i) As reliable as appropriate for the purpose for which the electronic communication
was generated or communicated, in the light of all the circumstances,
including any relevant agreement; or
(ii) Proven in fact to have fulfilled the functions described in subparagraph (a)
above, by itself or together with further evidence.
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Signatures II
• Minimum standards
– e.g. EU electronic signatures directive
• ‘advanced electronic signature’
• Digital signature and certification authorities
– Public/private key encryption techniques
– certification as third-party verification
• notarial services
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Originals
• Uniqueness as security
– impact of digital technologies
• UN Convention Art. 9(4)
– (a) there exists a reliable assurance as to the integrity of the
information from the time when it was first generated in its final
form…..; and
– (b) where it is required that information be presented, that
information is capable of being displayed to the person to whom
it is to be made available.
• integrity: ‘complete and unaltered’, except in the normal course of
communication (9(5)
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Evidential Issues
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Record-keeping I
• Regulatory
– e.g. revenue-related
– prior approval and audit
• Evidential
– statutes of limitation
– presumptions
• identity of a party & record of the transaction
– e.g. copyright ©
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Record-keeping II
Model law 1996, Article 10 ‘Retention’
– (a) the information contained therein is accessible so as to be usable for
subsequent reference; and
– (b) the data message is retained in the format in which it was generated,
sent or received, or in a format which can be demonstrated to represent
accurately the information generated, sent or received; and
– (c) such information, if any, is retained as enables the identification
of the origin and destination of a data message and the date and
time when it was sent or received
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Evidential issues
Model Law, art. 9
– Admissibility: common & civil law systems
• special conditions for computer-derived evidence?
• ‘best evidence’ rule
– “if it is the best evidence that the person adducing it could
reasonably be expected to obtain, on the grounds that it is not in
its original form.” (9(1)(b))
 Evidential weight
 Reliability, integrity and identification
 Role of standards?
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Concluding Remarks
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