Introduction to E-Commerce Law

Module 5 - Online Contracting, Commercial Online Laws, and Capital Rules

a. Online Contracting

NARRATIVE

ASSIGNMENTS

SUPPLEMENTAL DOCUMENTS

IBLS ARTICLES

NARRATIVE

The International Chamber of Commerce in its statement on Electronic Commerce says: “Today, buyers and a sellers in different parts of the world have no legal framework for conducting their negotiations, making contracts, arranging for finance, transport or insurance on-line because most of the rules that apply to international trade still presume the use of paper. Given that paper has certain inherent weaknesses as an information carrier, these rules create barriers that are unnecessary in the digital environment.” Currently we are seeing case law emerge with regard to the Arbitration Clauses in contracts. The ICC is a major influence with its Rules of Conciliation and Arbitration, and its Uniform Customs and Practice for Documentary Credits (UCP Publication No. 500), and Uniform Rules for Collections as detailed in ICC publication number 522 (URC 522.)

In the U.S., several legislations have been passed in order to provide e-commerce actors with some legal certainty. These legislations include the Electronic Signatures in Global and National Commerce Act 2000 (E-Sign Act,) the Uniform Computer Information Transactions Act (UCITA) and the Uniform Electronic Transactions Act (UETA.)

The UETA and the E-Sign act have a lot in common. Both acts validate electronic records and signatures. However, the UETA is more comprehensive than the federal act. Differences can be found in the areas of attribution of a signature, party agreement regarding the use of electronic media, sending and receiving electronic communications, the effect of change or error, the admissibility of electronic communications into evidence, and transferability of records.

The UCITA was developed by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in the summer of 1999 after a turbulent drafting process. The UCITA was designed for software and digital content contracts and was originally conceived to be Article 2B of the Uniform Commercial Code (UCC) which governs the sale of goods. UCITA aims at establishing a new commercial law for the information economy at a national United States level. Under UCITA, with certain limited exceptions, the terms expressed by the parties in their agreement control. If their agreement is silent, then trade usage and the parties' course of dealing and performance are looked to, and only if the contract is silent and trade usage and course of performance are unhelpful do the gap-filler provisions of UCITA apply. UCITA has not been passed by all states. Actually, only two states have enacted UCITA: Virginia and Maryland. Besides, in August 2003, NCCUSL decided not to expend further resources to promote UCITA in state legislatures and to discharge the UCITA Standby Drafting Committee.

Of course, the United Nations has a major roll to play in the e-contracts arena with the UNCITRAL Model Law on Electronic Commerce, the International Commercial Arbitration and Conciliation, the International Sales of Goods and Related Transactions, International Payments, and the Cross-border Payments Conventions. The Electronic Commerce Conventions is a trio of documents on Electronic Signatures (2001), Electronic Commerce (having to do with electronic data interchange, communication, and storage), and the Recommendation on the Value of Computer Records (1985).

Review UNCITRAL Model Law on Electronic Commerce Article 5 bis (pdf). Does anything in Article 5 bis raise a question with regard to older rules of contract law?

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ASSIGNMENTS

Discussion Board, and the Mid Term Assignment.

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SUPPLEMENTAL DOCUMENTS

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IBLS ARTICLES

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