Legal and Regulatory Issues in the Information Economy/The Rule of Law and the Internet
The Rule of Law and the Internet
As technology grows by leaps and bounds, the laws have to be made more responsive to changing times. The lack of a legal framework, in many jurisdictions, to address problems of validity of electronic transactions is a significant barrier to the growth of e-commerce. For one thing, while there are laws on contracts and other business transactions, these require written, signed, or so-called “first” documents. In e-commerce transactions, however, electronic data or documents or digitally signed contracts make up the whole transaction.
To address this conundrum, the United Nations Commission on International Trade Law (UNCITRAL) has drafted a model law on e-commerce that can serve as a guide for governments when they draft their own e-commerce laws.
What principles underpin the UNCITRAL Model Law?
The UNCITRAL Model Law operates on the following principles:
- Electronic communications shall be the functional equivalent of paper-based documents. Given proper standards, electronic documents can be treated and given the same value as paper documents.
- Autonomy of contracts
- Contracts may be in the form of electronic documents. However, this should not result in a change in the substantive terms and conditions of a transaction.
- Voluntary use of the electronic communication
- Parties may choose to enter into an electronic transaction or not at all. It is not mandatory.
- Solemnity of the contract and the primacy of statutory requirements respecting formalities of contracts
- The requirements for a contract to be valid and enforceable, such as notarization, remain the same.
- Application to form rather than substance
- The law should be applicable to the form rather than the substantive terms of the contract. Whatever statutory elements are required to be present must still be present, e.g., consent freely given, an object, cause or consideration.
- Primacy of consumer protection laws
- Consumer protection laws may take precedence over the provisions of the Model Law.
What kind of protection does the Model Law seek to provide?
The Model Law hopes to provide adequate legal protection for those who wish to engage in e-commerce. It ensures that electronic transactions are legally recognized and that a course of action, if necessary, is available and may be taken to enforce transactions entered into electronically.