E-Commerce is business conducted over the internet. For the most part, the general legal rules apply to E-Commerce. The law of contract, the Sale of Goods Act and the consumer protection rules apply in the same broad way, as they apply to conventional transactions.
In the early part of the century, a number of pieces of legislation were passed to facilitate and ensure legal recognition for e-business and E-Commerce. As befits a medium that spans borders and allows virtual transactions, the European Union has played a leading role in providing common EU rules for E-Commerce. The EU legislation provides common rules and standards, throughout the Member States.
E-Commerce raises issues that may not arise in conventional face to face transactions. The buyer and seller will not usually be in real time contact. They may be in different countries. The risk of fraud and uncertainty is higher. Legal issues may arise, as to which country’s laws might apply. States may differ in their laws, as to whether an electronic document or communication is valid in place of a written document.
E-Commerce Act and Electronic Communications Act
The E-Commerce Act 2000 in Ireland and the Electronic Communications Act in the UK derived from an EU Directive. The legislation clarifies the application of existing common law rules to internet and electronic communication transactions. The fact that it did so in common terms across the European Union was helpful in establishing confidence that each EU State’ would recognise common basic principles.
The Acts declared that electronic information is legally valid and is deemed legally effective. A contract may not be denied validity by being in electronic form. The formation of contracts is subject to the general rules of offer, acceptance, and consideration. Electronic communications are deemed equivalent to written or oral communications.
Most contracts made over the internet were valid prior to the Acts. The Acts clarified and confirmed that contracts made over the internet are valid. The E-Commerce legislation did not apply to certain documents which are traditionally in formal written terms. Land transfers, Wills, trusts, power of attorney and land sale contracts must still be in writing. There is a provision in the legislation, which may be activated in the future.
Contracts and Legal Acts may be in Electronic Form
Where a person or public body is required (whether the requirement is in the form of an obligation or consequences flow from the information not being in writing) or permitted to give information in writing, it may be given in electronic form whether as an electronic communication or otherwise. This covers a wide variety of matters in the administrative and private contractual sphere. This is subject to the below conditions.
The above provision applies only
- if at the time the information was given, it is reasonable to expect that it would be readily accessible to the person or public body to whom it is directed for subsequent reference;
- where the information is required or permitted to be given to a public body or person, and the person or public body consent to the giving of the information in electronic form but requires the information to be given in accordance with particular information technology or to be verified in a particular way, when the requirements have been met (which must be public, objective, transparent, proportionate and non-discriminatory).
Where the information is required or permitted to be given to a person who is neither a public body nor acting on behalf of a public body it applies if the person to whom the information is required or permitted to be given consents to the information being given in that form.
This provision does not prejudice any other law requiring or permitting information to be given in accordance with particular information technology and procedural requirements or on a particular data storage device or by means of a particular kind of electronic communication.
Electronic Documents to Admissible
Documents have always been admissible as evidence, notwithstanding that they are stored electronically or in some non-paper medium. The legislation makes further detailed provision with respect to the admissibility of electronic documents and electronic signatures.
Electronic documents are admissible as evidence in legal proceedings. The law of evidence may not deny their admissibility on the sole ground that it is an electronic communication, an electronic form of a document, an electronic contract or writing in electronic form.
A document may not be denied admission where the original cannot be produced, provided that that which is the best evidence that the person or public body producing it could reasonably be expected to obtain, is produced.
An electronic signature is admissible in evidence. It may not be denied admission on the sole ground that it is not an advanced electronic signature, is not based on a qualified certificate, is not issued by an authorised certification service provider or is not created by a secure signature creation device. If the original is not produced, it may not be denied admission on this ground, provided that it is the best evidence that the person or public body producing it, could reasonably be expected to obtain.
Excluded Categories of Contract
The Electronic Commerce Directive allows States to exclude the following categories of contract;
- contracts that create or transfer rights in real estate except for rental rights;
- contracts which require by law, the involvement of courts, public authorities or professions exercising public authority;
- contracts of suretyship granted and collateral securities given by persons acting outside their trade, business or profession;
- contracts governed by family law or the law of succession.
The above exemptions must be reviewed every five years and a report is made to the Commission.
The Directive on electronic signatures is not applicable to contracts or obligations where the requirements as regard form are prescribed by national or community law. In Ireland, this would include statutory declarations and affidavits. In continental Europe, it would cover notarised documents. The Irish legislation specifically excludes wills, trusts and enduring powers of attorney.
The Minister may by regulations, remove items excluded from the legislation, where technology has advanced and access to it is widely available, where adequate procedures and practice has developed in public registration or other services, or where the public interest so requires. The variations may be permanent or may be made on a trial basis.
An electronic signature is data in an electronic form which is attached to or associated with other electronic data and is intended to serve as a method of authentication. Where a name is specifically typed into the body of an email it can potentially act as equivalent to a signature. The key issue is whether it is intended to authenticate the communication as that of the sender. In most circumstances, this will satisfy legal requirements for signature or authentication. An automatically generated signature may not be sufficient to authenticate a document.
An electronic signature may authenticate a document. Provided that a name or signature is attached to or associated with an online document in a way that is intended to authenticate its creator, this will generally have the same legal effect as a signature. For example, a scanned signature or even a name at the end of an e-mail will generally be equivalent to a signature on an order form. In practice, e-commerce retailers use further methods of authentication, such as passwords and encryption techniques. They have an incentive to do so as they usually carry the risk of loss in the event of fraud.