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.


digital id said...

E-Commerce also known as electronic commerce as well.Electronic Commerce that is conducted between businesses is referred to as business-to-business or pre-qualified participants.

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