Friday, October 16, 2009


1.0-introduction:what is e-commerce

1.1-scope of e-commerce

2.0-applicability of the existing law to e-commerce:Trade Description Act 1972

2.1-applicability of the existing law to e-commerce:Sales of Goods Act 1957

2.2-applicability of the existing law to e-commerce:Direct Sales Act 1993

2.3-applicability of the existing law to e-commerce:Consumer Protection Act 1999

2.4-Electronic Commerce Act 2006

3.0-International Law on E-commerce

3.1-E-commerce in ASEAN countries

3.2-E-commerce law in United States

3.3-E-commerce law in Singapore

E-commerce Law in Singapore

Electronic Transactions Act 1998

This act was passed by the Singapore parliament in September in 1998. It will deals with the issues of certainty of electronic records and transactions. The ETA was drafted with the following principles:

(i) the need to conform to international standards and international model in order to be integrated with the global e-commerce framework;
(ii) the need to avoid over-regulation;
(iii)the need to be flexible and technologically neutral to adapt quickly to a free-flow global environment; and
(iv)the need for transparency and predictability in our laws.

The act also covers the following areas:
(i) electronic contracts
The section covers electronic contracts which are based on the UNCITRAL model laws. This part will settle the issue of how the formation form of contract in way of traditional should also be operated in e-commerce. It also will help us to solve the issue of the uncertainty of laws on electronic contracts. In addition, the act also clarifies the position of electronic contracts. In this part, the validity or enforceability can not be denied although the offer and acceptance is made by means of electronic records.

(iii) Electronic records and signatures,
Despite including provisions which deal with electronic secure records and signatures the act also mentioned that no record should be denied any legal effect just because it is a form of electronic record. Furthermore, the act also ensure that a secure environment for commercial transactions to take place. In this case, the parties must have some reasonable assurance that the electronic record, whether it takes the form of a contractual document or an electronic signature is identifiable with the originator. This is an essential ingredient in contractual liability. Then, the act also recognises digital signatures as one secure form of electronic transaction. Digital signatures allow parties the means with which to authenticate records for the purpose of conducting e-commerce transactions.

In conclusion, the government of Singapore had made attempt to strengthen the infrastructure
framework for electronic transactions in Singapore. To ensure the privacy in cyberspace is protected, the ETA was placed and it is a big step in e-commerce.

E-commerce Law in United States

The growth of e-commerce has increased the use of electronic contracts. Most of the countries nowadays adapted their commercial legislation to recognize electronic contracts and signatures as legally valid instruments. Although in this modern time, e-commerce and the promulgation of laws protecting e-commerce contracts has been expanded, many businesses and Internet users do not know precisely what law applies to their e-commerce contracts. Below are the lists of e-commerce law in the Unite States.

Basically there are some laws of electronics contracts in the United States. One of them is Uniformed Commercial Code (U.C.C. The U.C.C. is a set of uniformed commercial rules that have been adopted by most states. U.C.C. Article 2 refers to the sale of goods and Article 2A refers to the lease of goods including computer equipment. Thus, the U.C.C. applies to electronic contracts for the sale of goods. The U.C.C. does not apply to the online sale of services. Application of U.C.C. to the sale of electronic materials is definitely a complex issue that must be reviewed in a case by case basis. Important issues to be considered are if the licensing includes some type of service, the scope of the service, and the state where the contract is performed. The Restatement of Contracts may be an important tool here. For instance, if the state laws consider licensing of a product a sale of goods when incidental service is involved, then the U.C.C. rules would apply to that specific online licensing contract. In sum, the U.C.C. clearly applies to the online sale of goods; and it may also apply to the sale of certain electronic materials depending on the jurisdiction, the type of 'electronic material,' and the amount of service that this sale entails.

Another important law is Uniform Electronic Transactions Act (UETA). This law has been introduced by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in 1999. According to Article 3 and Article 4 of the UETA, this law is only applies to transactions related to business, commercial, and government matters; and to transactions conducted by electronic means.

Next, there are also U.C. Electronic Signatures in Global and National Commerce Act (E-Sign Act) which was in effect in 2001. As the validity of electronic commerce is the popular in e-commerce, this act recognizes the validity of contracts entered electronically, and where electronic signatures have been incorporated. The main purpose of this Act was to bestow on electronic contracts, the same authority as its paper-base counterpart. It is important to note that the E-Sign Act is not considered the U.S. electronic signature law. The E-Sign Act broadly defines electronic signatures as any mark or sound. Thus, any mark, image, symbol, or sound may constitute an e-signature for purposes of electronic contracts.

In conclusion, united stated has taken an effective step to solve the problem of e-commerce by enacting these kind of laws. This will make easier to the individual or society to bring action in case of e-commerce.

E-commerce in ASEAN countries

A program to maximize benefit of public or users of business via e-commerce has been created by Asia Pacific Economic Cooperation (APEC), called Electronic Commerce Steering Groups (ECGS) which its main concerns are on data privacy, consumer protection, cyber-security, paperless trading, trade facilitation and spam on business within APEC region.

Some problems with e-commerce are that some of websites have bad design or cluttered which will not convince buyers to buy online. Some may said it is only a marketing problem, or only a perception, but there were also people who said that due to their own experience. Due to that, they never shop online anymore because they don’t know whether their rights are protected or not if they buy online. Therefore, rather than taking risk, they prefer to avoid in complete.

(source: here )

It has to be put in priority that, in order for e-commerce to works well, it is crucial to gain consumers’ trust. Therefore, ECSG is taking initiative by building the trust in e-commerce by helping them from fraudulent and deceptive practices when consume on-line. APEC has implement APEC’s Voluntary Consumer Protection Guidelines and its main purposes basically cover international cooperation, education and awareness, online advertising and marketing and also on consumers dispute.

Other than issue of trust, there has also been problem with data privacy, which the main concern is whether consumer’s personal information is being protected while making a trans-border transaction. Due to this, the ECSG studied the APEC economist’s approach to data privacy in 2002. On 2003, ECSG established their own Data Privacy Subgroup to draft privacy principles and to implement mechanism as to make it applicable and in same time realistic to be implemented. They want to continue information exchange between individual economist on their development, and also to create public awareness by sharing and determining best practices on data privacy protection.

Research has been made to make it works between e-commerce and digital signature law between countries. According to the frameworks that been drafted, all the member stated shall adopt the regulation of the electronic commerce in order to built trust and confidence among consumers and to ease the transformation of the e-commerce within ASEAN. To make this works, the Member State will be needed to
• Make their national laws and policies regarding electronic transaction into a law based on international norms,
• Make it easy for the establishment of mutual recognition for digital signature frameworks,
• Support and facilitate a secure electronic transaction payment and settlement method between region,
• Adopt a means to protect intellectual property rights arising from e-commerce transaction and business. One of means that shall be taken into consideration is to adopt World Intellectual Property Organisation (WIPO) treaties, which are WIPO Copyright Treaty 1996 and also WIPO Performances and Phonograms Treaty 1996
• Take measures to raise awareness on personal data protection and also consumer privacy
• And also to promote alternative dispute resolution (ADR) mechanism for online transaction

as conclusion, by these steps that have been agreed by, it would provide some protection to consumer in the e-commerce transactions. Though, to implement these steps would still be a challenge to them and the consumers themselves must have wide knowledge about relevant issues and current development on e-commerce in order for the laws to be enforce upon them efficiently.

(source: here)

Thursday, October 15, 2009

International Law on E-commerce

UNCITRAL or United Nations Commissions on International Trade Law is the core legal body of the United Nations system in the field of international trade law works to modernize and harmonize the rules of international business. As trade means faster growth, higher living standards, and new opportunities through commerce, UNCITRAL seeks to increase these opportunities worldwide by formulating modern, fair, and harmonized rules on commercial transactions. As in modern period, people seek to use internet as a medium to execute their business, the world of e-commerce has grown up. However as usual this would give many problems to the society therefore UNCITRAL tries in effort to solve this problem.

In 2004, Working Group on Electronic Commerce of the United Nations Commission on International Trade Law (UNCITRAL) had made a draft on e-commerce convention. This draft was intended to facilitate e-commerce by removing current barriers. According to the Working Group Chairman, Jeffrey Chan of Singapore, This work will benefit world trade, as it will enable and encourage the greater use of e-commerce. He further said that nowadays, more transactions are being conducted through electronic means. However, there was problem with regards to legal rules of contracts. This is because in international business, different countries have different legal rules for contracts and it creates uncertainty when the same transaction is conducted across international borders.

By this convention, it tries to create a uniform legal regime for electronic transactions. By this method, it will generate confidence in e-commerce and reduce costs. Therefore, by this there can be an expansion of international trading transactions. This draft basically will tackling the issues related to electronic contracting, such as legal barriers in existing trade-related instruments to the expansion of e-commerce, as well as issues related to transfer of rights, in particular rights in tangible goods, by electronic means and mechanisms for publicizing and keeping a record of acts of transfer on the creation of security interests in such goods.

As mentioned earlier, this convention is tries to solve the issues of the uncertainty of legal rules for international contracts. So, there are provisions under this convention which deal with determining a party’s location in an electronic environment; the time and place of dispatch and receipt of electronic communications; and the use of automated message systems for contract formation. In addition, there are also other provisions which mentioned about the criteria establishing functional equivalence between electronic communications and paper documents which including “original” paper documents as well as between electronic authentication methods and hand-written signatures. The convention will assure companies and traders around the world that contracts negotiated electronically are as valid and enforceable as traditional paper-based transactions.

Thus, in 2005, UNICITRAL builds UNCITRAL Model Law on Electronic Commerce and the UNCITRAL Model Law on Electronic Signatures. This was represented by representatives from many countries including Malaysia which is a member of UNICITRAL. This model law had provides framework to deal with the issues of whether by clicking something in a website will validly conclude the contract. This model law address the issue on under what circumstances will an electronic signature have the same value as a hand-written one. Many other countries had adopted these model laws. The objectives of Model Laws are to facilitate rather than regulate electronic commerce, to adapt existing legal requirements and to provide basic legal validity and raise legal certainty. The important provisions under the law are the Article 5 where it stated:
Information shall not be denied legal effect, validity or enforceability solely because:
- It is in the form of a data message or
- It is incorporated by reference.

Under Article 9 of UNICITRAL Model Law it reads in any legal proceedings, nothing in the rules of evidence shall apply so as to deny the admissibility of a data message in evidence solely because it is a data message. Another vital provision is the article which talks about the time and place of dispatch and receipt. It falls under Article 15 where it provides:
A data message is deemed to be sent when it enters an information system outside the control of the originator. A data message is deemed to be received:
a) If the addressee has designated an information system to receive the message, when the message enters the designated system; or
b) If the message is sent to an information system other than the designated system, when the addressee retrieves the message.

All these provisions cover the problems of e-commerce transaction where a person or society may be putted in when enter into an electronic contract. In conclusion, we hope that this effort made by UNICITRAL will helps to provide even greater harmonization by offering a particular set of rules for international transactions especially electronic commerce.

Tuesday, October 13, 2009

Electronic Commerce Act 2006

Due to the rapid growth of electronic commerce in recent times, there has been a surge in the usage of the internet for business transactions. Commercial transactions such as banking transactions and the purchase of goods and services are now frequently performed over the internet and other computer networks. Furthermore, communication via e-mail is now commonplace in the commercial world.

In the line with this development, the Electronic Commerce Act 2006 (“the Act”) was enacted and came into force on 19th October 2006. There are three main objectives regarding the enactment of this Act which is to reaffirm the validity and legal effect of transactions by electronic means, to remove legal obstacles to e-commerce and to provide certainty in electronic communication. (An Overview on Electronic Commerce Act 2006, Aruna Kumaran, Senior Assistant Secretary Policy and Planning Division Ministry of Domestic Trade and Consumer Affair)

The scope of the Act also covers electronic commercial transactions carried out by the Federal and State Governments. However, the Act does not apply to certain transactions or documents, namely (1)power of attorney, (2)creation of wills and codicils, (3) creation of trusts, and (4)negotiable instruments.

Furthermore, the Act also contains provisions setting out how to determine the ‘who, what, where and when’ of an electronic message. Or in other words, this Act is mainly about procedures in operating the online transactions or e-commerce.


An electronic message is deemed to be sent by the originator of the message if it is sent by a person who has the authority to act on behalf of the originator in respect of that message or if the message is sent by an information processing system programmed by, or on behalf of the originator to operate automatically.The notion that one has to physically put pen to paper to sign a contract is now a thing of the past.

A person who receives an electronic message is entitled to regard the message as being that of the originator except in instances where he has received notice from the originator that the message was not sent by him or the addressee knew or should have known that the message was not sent by the originator had he exercised reasonable care.


What exactly did the originator of the message intend to send? Under the Act, there is a presumption that the electronic message is what the originator intended to send, and the addressee can act on that presumption unless the originator can show that the addressee knew or should have known that the electronic message received was an error. Therefore parties to a commercial transaction have to take precautions to ensure that any messages to be sent contains accurate information and are indeed intended for the recipient.


How does one determine the location of dispatch and receipt of electronic messages? The Act deems an electronic message to be sent from the originator’s place of business and received at the addressee’s place of business. If there is more than one place of business, it will be considered sent from the place of business that has the closest relationship with the transaction or in the absence of that, from the principal place of business. In circumstances where the originator or addressee has no place of business, it will be deemed sent or received, as the case may be, at the originator’s or addressee’s ordinary place of residence.


With regards to the issue of time of dispatch, an electronic message is deemed by the Act to be sent when it enters an information processing system outside the control of the originator. Therefore it would appear that the time of dispatch will be when a person clicks the ‘Send’ button when e-mailing or the ‘Buy/Purchase’ button on an online store.

An electronic message is deemed to be received when the message enters the designated information system (where there is a designated system), for instance, when a message enters the inbox folder of an e-mail account, or where there is no designated system, when the addressee comes to know about the message.

Where the parties agree or the originator requests that receipt of the electronic message is acknowledged, that message will be treated as though it has never been sent until the acknowledgment is received. If the method of acknowledgment has not been agreed by the parties, any acknowledgment (automated or otherwise) or any conduct of the addressee which is enough to communicate receipt, will suffice as acknowledgment.

Furthermore, the Act is a step forward in the regulation of contracts effected by electronic means. It lays down the legal principles that apply to the formation of such contracts as according to Section 7 of this Act, it provides that:

7. (1) In the formation of a contract, the communication of
proposals, acceptance of proposals, and revocation of proposals and acceptances or any related communication may be expressed by an electronic message.

The Act also lays down the requirements that have to be satisfied to establish the terms of these contracts, thereby enabling parties to put in place infrastructure that is capable of fulfilling these requirements.

In addition, the enforcement of the Consumer Protection (Amendment) Act 2007 on 15 August 2007 enables consumers who acquire goods or services through electronic means to file claims in the Tribunal for Consumer Claims under the Consumer Protection Act 1999. This will reduce the costs and expedite the disposal of litigation that arises from such transactions.

In conclusion, the act of Government in enacting this Electronic Commerce Act 2006 gives advantages to the consumers especially to those who actively conducting business transactions through the Internet.

*Electronic Commerce Act 2006 is on the sidebar.

New laws and amendments in the 11th Parliament.

Sumber / Tarikh: The Sun Online February 18, 2008 – Monday

B.Suresh Ram

PETALING JAYA (Feb 17, 2008): About 150 new laws and amendments were adopted by the 11th Parliament since it began sitting on May 17, 2004.

Here is the list of the the new laws and amendments:

> Constitution (Amendment) Bill 2004
The act saw the Dewan Rakyat increase retirement age of judges from 65 to 66.

> Chemical Weapons Convention Act 2004
Act seeks to implement the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction.

> National Heritage Act 2005
The act is a comprehensive set laws promulgated to provide conservation and preservation of National Heritage, natural heritage, tangible and intangible cultural heritage, underwater cultural heritage, treasure trove and for related matters.

> Constitution Act (Amendment) (No.2) Act 2005
The Federal Constitution was amended to increase the number of Dewan Rakyat seats to 222 following the delineation of constituencies in Sarawak in 2005.
Another amendment of the bill allowed the Chief Justice to refer a judge who commits a breach of any provision of a code of ethics to a body constituted under federal law, which also include provisions for the procedure to be followed and sanctions which can be imposed other than the removal of a judge from office.

> The Arbitration Act 2005
The act reforms the law relating to domestic arbitration, provide for international arbitration, the recognition and enforcement of awards and for related matters.

> Suruhanjaya Perkhidmatan Air Negara Act 2006
The law which drew flak from consumers, Non-Governmental Organisations (NGOs) and even elected representatives, was adopted after a lengthy study and debate. The Suruhanjaya Perkhidmatan Air Negara (SPAN) is empowered to supervise and regulate water supply services and sewerage services and to enforce the water supply and sewerage services laws and related matters.

> Legal Profession (Amendment) 2006 Act
It reduced the controversial quorum required to conduct an annual general meeting (AGM), as well as allow junior lawyers to contest for the Bar Council elections. The Dewan Rakyat made a rare move when it amended midway through the tabling of the bill and saw the removal of Section 93(3)(d) (4D), Section 93(3)(d) (4D) which states "no act or proceedings of the Disciplinary Board shall be invalidated solely on the ground that the Malaysian Bar President or his representative has taken part in any deliberation of the Disciplinary Board relating to any complaint where the Bar Council is the complainant".

> The Electronic Commerce Act 2006
This provides legal recognition of electronic messages in commercial transactions, the use of the electronic messages to fulfill legal requirements and to enable and facilitate commercial transactions through the use of electronic means.

Monday, October 12, 2009

applicability of the existing law to e-commerce: Consumer Protection Act 1999

Consumer Protection 1999 was enacted to protect consumers right in Malaysia. This act was enforced to protect consumers from unethical business transactions especially regarding buying and selling matters between dealers and consumers. So, does this act also governs online transactions or e-commerce?

Before this, Section 2 of this Act provides that the Act does not apply to any trade conducted by electronic means unless otherwise prescribed by the Minister. E-commerce activities are still new and have not yet developed further in Malaysia at the time the Act was enforced. Therefore, the provision in this Act does not specifically indicate whether the applicable activities includes activities of e-commerce in Malaysia. However, technology in Malaysia had developed and had led to changes because nowadays, consumers are more likely to make business transactions through online transactions or e-commerce as there are a lot of choices of goods and it is easy operated. There are various problems that arise through activities involving e-commerce transactions such as consumer fraud cases. For example, items ordered through certain websites does not reach the buyer although payment had been made via bank or post. Or the quality of the items that had been ordered does not achieve the standard like had been stated in the websites.

Furthermore, as according to Section 19 of the Act,manufacturers of products or goods must comply with safety standards stipulated in section 21 of the Act. Therefore, to conduct business transaction, the manufacturers and sellers must ensure that products that had been manufactured and sold are safe to be used by the consumers, If this Act clearly applies to electronic transactions, the provisions stated is relevant to consumers to take action against traders who had committed fraud to the consumer tribunal or court.

So, government had taken what can be considered as a wise action when this Act wad amended in August 1997, which the consumer is protected under this Act for transactions involving online matters. As according to Section 2 of the Act “Subject to subsection (2), this Act shall apply in respect of all goods and services that are offered or supplied to one or more consumers in trade including any trade transaction conducted through electronic means”.

Hence, it can be concluded here consumers who conduct online transactions or e-commerce are now protected under this Act.

You can refer to the Consumers Protection Act 1999 on the side bar.

Thursday, October 1, 2009

applicability of the existing law to e-commerce:Direct Sales Act 1993

However, transactions through the Internet has a connection with the sale of this type because sale or purchase of goods via the Internet are typically orders through electronic through the website.

Offences for false advertising in  goods is provided in Direct Sales Act 1993. Ads in this Act defined as any form of advertising (whether oral, written or sound) issued or displayed through notices, label cards, documents, film cinematography, pictures, photos, television or through any way.

Is provided in section 20 (1) Act 1993 that any vendor who provides goods or services through service mail order and at the same time advertise goods or services, the ad shall contain details as provided in the Act.

The main question is that whether DSA 1993 applies to e-commerce transactions? Do direct sales via the Internet are covered by AJL 1993? The question is very relevant to be asked for as e-commerce transactions is now well developed but the law protect consumers doing business on the Internet is still not specifically allocated and
clearly stated in Malaysia.

Hence we must also refer to DSA 1993. The question whether the Act applies to e-commerce on the Internet depends on the purpose or definition of 'direct sales' under the Act. According to the definitions and provisions DSA 1993, in general there are two forms of direct sales covered by the Act, namely: first, sales from house to another house and second, sales through mail order.

It is obviously that the first category does not apply to transactions via the Internet. Hence we must look to the second category which is sales through mail order.

Do sales through mail order sales equal to orders via the Internet? It is clear that sales of this type refer to any orders which are made either electronically or otherwise, and goods in respect sent by post. DSA 1993 does not provide any explanation about the characteristics of sales postal shipments.

However, transactions through the Internet can be said as has a connection with the sale of this type of transactions because sale or purchase of goods via the Internet are typically orders through electronic and usually through the website. The postal of goods ordered will be made whether in postal way or personal delivery. Hence, mail order as illustrated in DSA 1993 is relevant to the transaction via the Internet.

It cannot be denied that when the Act was first introduced, e-commerce is not yet developed as they do now. But, nowadays we can see Internet can be said as wee-developed and a lot e-commerce activities were conducted through the Internet. Although the application of e-commerce in Malaysia is still not really developed like other developed countries, but it is conducted in a good way in some activities, for example, in e-banking, purchasing reading materials, computer software or purchasing plane tickets.

In other words, it can be stated here that DSA 1993 also includes e-commerce activities. Although that, e-commerce activities can be said as more complicated that the activities stated in the DSA 1993.

You may refer to the Direct Sales Act 1993 on the sidebar.

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