Validity of Electronic Contracts in the UK

hardihood of electronic Contracts in the UKREGULATIONS AND CASE ANALYSIS ON THE VALIDITY OF electronic CONTRACTS IN UNITED KINGDOM1The logicality of Electronic Contracts in United realmLegal background of UK formulas on Electronic pin downsIn the late 1990s, the want of a level-headed foundation for e-commerce has ca utilise many another(prenominal) European countries to separately enact electronic touch sensation law.2Such a trend has raised a tutelage to the EU as a whole for the differences there might be.3In addressing the print, the EU has come up with the leading on a Community cloth for Electronic specks (EU E-Signatures directional).4The Directive requires implementation by all member states by July 19, 2001.5The Directive mainly cover ups with, inter alia, the recognition of electronic signature, technological neutrality, and planetary harmonization.6As a result, the Electronic Communications Act 2000 (ECA) and the Electronic Signatures Regulations 2002 (E SR) be the implementation of the EU Directive.2. Electronic Communications Act 2000During the history of face contract law, it has addressed and reconciled the validity routine of signature on the basis of their brings. Several forms of signatures were given legal validity such as initials, marks, seals or printed name.7 When it comes to electronic signatures, UK maintained their perspective as to relying on the snuff it performed by the signature method in determining its right this go about is called the technology neutral approach.8 The ECA heavily inherits of this technology neutral approach.The ECA focuses on troika main youngs (i) the validity of electronic signatures, (ii) the validity of electronic records in transactions, and (iii) the legality of public key cryptography.9 component 8 and 9 of the ECA removes the barrier amidst electronic rootss and their paper counterparts. As such, electronic records ar given legal validity on a role-by- drive basis. The ac t as well as authorizes the repository of State to enact secondary legislations.103. Electronic Signatures Regulations 2002The ESR came into force on March 8, 2002.11The main focus of the ESR is to implement certain provision of the EU E-Signatures Directive, especially the one concerning Cryptography Service Providers, including liability and information protection.12The ESR and the EU E-Signatures Directive shargon the comparable definition for electronic signature. below the ESR, a legal mostone can be a signatory. The two legislations also share the same two eccentric persons of signature, which is basic and advance(a) signature. Since UK contract law does non distinguish the notion of handwritten signature, theres no need for the ESR to particularisedally recognize the validity of an electronic signature as an alternative for the handwritten ones. However, various U.K. legislative acts have chiefly recognized sic that an e-signature is a valid form of signature in the specific context concerned.13Data piths below UK legislationsDefinition of entropy messages under UK legislationsUnder English legislation, information messages was addressed under the name of electronic communication. Section 15 of the Electronic Communication Act 2000 defines electronic communication as followsA communication transmitted (whether from one person to another, from one whatchamacallit to another or from a person to a device or vice versa)-By means of a telecom system (within the substance of the telecommunicationmunication Act 1984) orBy other means only while in an electronic formThis encompassing definition covers all kinds of communication transmitted through a device to a telecommunication network, including a telephone, fax, computer or laptop. Regarding electronic contracting, the EDI might be the oldest form of computer-based electronic contracting.14Origin of data messages under UK legislationsIn England and Wales, it is also tricky to determin e when and where the electronic communication theory are sent from. English legislation requires approximately physical manifestation of the subject study, or the parties intent. Its not a good deal important to search for the clipping of center where the electronic communication generated, besides several legal aspects relied on these two factors.Electronic communications, in their nature, are intangible to the outer world, unless stored of physically manifested by electronic equipment. Even if the electronic data is stored in the device, it can be easily deleted or modify without leaving any trace of the interference. This is a major issue of significant value of electronic data, for example, as to the existence of a contract or a contractual term.Evidential validity of data messages under UK legislationsElectronic evidence has been subjected to special legislation in England for many years. The admissibility of data message in England was governed by a lot of regulation s, much more than those of traditionalistic paper evidence.Section 5 of the Civil narrate Act 1968 provides that a computer-produced document shall be admissible as evidence, provided that the proponent can argue its authenticity. The person who wishes to submit electronic evidence essential establish thatThe document was prepared during a period over which the computer regularly stored or mathematical operationed informationOver the relevant period of clip, information of this type was regularly supplied to the computerThe computer was operating properly andThe information contained in the statement reproduces information supplied to the computer.15Without any of the above conditions, the electronic evidence would not be admissible.On the part of the proponent, not only he essentialiness prove the authenticity of the evidence, but also its reliability, often times by acquiring a certificate signed by a person responsible for the operation of the computer.16 clipping and pla ce of data messages under UK legislationsTime of data message under UK legislationsIn England and Wales, as well as many other countries, the courts face with a difficult issue of which rule among the dispatch rule and the pass along rule should be hold in in certain wooings. In fact, the solution for a previous compositors case does not necessarily solve the problem in a bracing situation.Time of dispatchSome argued that the dispatch rule (originated from the postal rule) should be applied in those cases dealing with email communication, but not to online transactions.17The contend for this is because they observed that e-mail communications share many feature with the stylish postal communication, for example, after the sender hit the sending button, he or she has very little control over what would happen to the message, or not at all. In other words, he did all he could in messaging the other party. Of course there might be some delay or problem as the two parties often do not communicate simultaneously. It was suggested that a modified postal rule should be used to deal with the formation of nowadays electronic communications.Time of receiptShould the court apply the receipt rule for contractual formation, the crucial issue would be the time of receipt of that piece of communication. In fact, one would specify a lot of identifiable point along the communication process that would fit the receipt category.18The Electronic Commerce Directive of UK does not deal with the contractual betrothal but it does shed light on the time of receipt of a message. Article 11 of the Directive provides for the situation where an ordinance was placed with a service provider and that service provider must acknowledge the receipt of that order.The order and acknowledgement of receipt are deemed to be received when the parties to whom they are addressed are able to access them.19The express able to access them was the subject of various debates. It is believed tha t the phrase was imported in a flash from regulation 11(2)(a) of the EC Directive and according to the advocate for Business, when the message is adapted of being accessed by the recipient it will be deemed received, which doesnt explain anything as to this interpretation.20 For instance, if a data message is sent in the middle of the night, it must be deemed capable of being accessed, but is it reasonable to require a consumer to check a message in the middle of the night? In most of the case, after dispatching, no one would expect that message to be received at that time of the day.Place of data messages under UK legislations accord to the general rule, the formation place of an electronic contract would the one where acceptance was communicated to the party making the disco biscuit. In specific situations, the place of acceptance was the place where the party making the offer received the acceptance. As a matter of facts, courts must look into details of the circumstance to d ecide which rule should be applied.Electronic signatures under UK legislationsThe ECA broadly defines electronic signature as so much of anything in electronic form that is incorporated into or differently logically associated with any electronic communication or electronic data and purports to be so incorporated or associated for the purpose of being used in establishing the authenticity of the communication or data, the integrity of the communication or data, or two.21From the above definition, an electronic signature can be downhearted into three elements, namely (i) so much of anything in electronic form, (ii) incorporation or logical association, and (iii) purports to be used by the individual creating it to sign.22The get-go fate of an electronic contract is the electronic form. This is such a broad provision so as to make sure that new concepts that are yet to be invented would be covered by the definition.The second requirement of an electronic signature is the incorpo ration of logical association with an electronic communication or electronic data. The signature could be deemed incorporated or logically associated by the modal value it is created. For example, in the process of creating a digital signature, the package could take part of the plaintext and create a message authentication code, which allows a recipient to check whether the message has been altered. As a matter of fact, the authentication code is separated from the message but at the same time incorporated into it. Another instance is where a biometric measurement is attached to a message. In this case, the biometric measurement would only function when it is associated with the message. thither are many other expressions to produce an electronic signature but the same principle is applied to all of them, even though the function of the electronic signature may vary from case to case.The third element of an electronic signature is the intent of authenticity23 by the signatory in creating the electronic signature. There are cases where the person who the signature purports to be was not the one who really caused it to be affixed to the data. In those instances, the electronic signature failed the third requirement.In terms of the admissibility of electronic signatures required by the EU E-Signatures Directive, the definition of electronic signature in the ECA is said to be too broad.24Understandably, the ECA looks to make mode for technological innovation therefore the definition was intentionally left unspecific.25However, the ECA should arrest the analogous binding characteristic of an electronic contract as a handwritten one, i.e. section 7 (3) of the ECA should not allowed authenticity and integrity to be separated by going beyond the interpretation of advanced electronic signatures.26It is similar to having a signature on a piece of paper on an unsigned contract and telling that the contract is signed. Moreover, section 7(3) also allows separate the data and the communication, which raise an issue of the non-repudiation characteristic which requires the integrity of both the data and the communication.Analysis on some significant cases of Electronic Contracts in United KingdomCase 1 florid Ocean separate Limited v. Salgaocar Mining Industries PVT Ltd. and another 2012 EWCA Civ 265This English case shed some light on the enforceability of a contract of indorsement where a series of documents have been duly authenticated by electronic signature of the guarantor.The facts of the caseThe plaintiff of this case, Golden Ocean Group Ltd (Golden Ocean), was a shipping company. The suspect was Salgaocar Mining Industries PVT Ltd (SMI).In early 2008, in reply to Golden Oceans offer to charter SMI a vessel, SMI nominated Trustworth Shipping Pte Ltd (Trustworth), a related company. The negotiations were conducted via telecommunicate on the basis that Trustworth richly guaranteed by SMI.Golden Ocean later on(prenominal) lay cryed that Trustworth had repudiated the charter and that it was guaranteed by SMI.The defendants argued that the email chain was insufficient to create a binding guarantee according to the Statute of Frauds.Legal issueThe issue of this case was whether the email chain constituted a binding guarantee or not.Judgment of the courtThe court rendered a judgment for the plaintiff, agreeing that Golden Ocean had a well arguable case that the document was in writing and did not contradict the Statute of Frauds. As such, the court cook forth the following reasonsFirst, the judge rejected the argument that the agreement between the parties was not in writing according to the Statute of Frauds. The phrase fully guaranteed by SMI can only be interpreted in the way that the charter party was guaranteed by SMI, instead of to be guaranteed as the case may be.Neither did the judge accept the idea that there should be some limitation to the number of documents to be permissible in the case of writing. The court emphasized that it was highly desirable that the law gives effect to the communications which are more than clearly than many negotiations between men of business, the ecological succession of offer, counter offer, and final acceptance by which, classically, the law determines whether a contract has been made.Regarding the signature issue, the court cerebrate that the contract was signed by way of the electronically printed signature of the person who sent them and it sufficed the test of a valid signature according to the Statute of Frauds.Case 2 Hall v Cognos Ltd Industrial Tribunal Case No.1803325/97The facts of the caseHall was employed by Cognos as a sales executive. Under the employment contract, Halls expenditures incurred for travel, modification and other reasonable cost would be covered by Cognos, under the condition that it would not exceed 6 months. Hall failed to submit the claim within 6 months so he asked Sarah McGoun and Keith Schroeder, his line manage r, whether these expired claimed was okey for him to get his recovery. The reply was Yes, it is OK. They communicated through a series of emails. Hall later submitted his request but Cognos refused to accept any payment.Legal issueThe issue of this case was whether emails can suffice the writing test and be considered as signed once theyre printed out.Judgment of the courtThe court rejected the claim for Cognos that because the emails were not in writing and signed, they didnt have any effect. Instead, the judge concluded that emails were in writing and signed once they were printed out.1 In the UK, there are three different legal territories England and Wales, Scotland and Northern Ireland. For the purpose of this chapter, the UK law or English law represents the law in England and Wales.2 Anthony Burke, EU and Irish net profit fairness An Overview, 13 INTL L. PRACTICUM, Autumn 2000, at 107, 113-153 Mariam A. Parmentier, Electronic Signatures, 6 COLUM. J. EUR. L. 251, 252 (2000) 4 Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community Framework for Electronic Signatures 1999 OJ L13/12, 19.1.2000.5 Id., Art. 136 Jacqueline Klosek, EU Telecom Ministers Approve Electronic Signatures Directive, 4 CYBERSPACE LAW. 12 (2000).7 Mincoff, M., An Overview of Electronic and digital Signature Legislation and Regulation in the United States Silanis Technology, 19998 Reed, C., What is a Signature?, Journal of Information, Law and Technology,20009 Murray, J., Public Key Infrastructure Digital Signatures and taxonomic Risk, Journal ofInformation, Law and Technology.200310 Id.11 interdisciplinary Centre for Law Info. Tech., Katholieke Universiteit Leuven, Study for the European Commission The Legal and market Aspects of Electronic Signatures, 215-16 (2003).12 Id. at 21513 Xxx Interdisciplinary Centre for Law Info. Tech., Katholieke Universiteit Leuven, Study for the European Commission The Legal and Market Aspects of Electron ic Signatures, 215-16 (2003)14 The most mature form of electronic contracting is electronic data exchange (EDI), which permits trading partners to exchange commercial documents electronically. Baum, M.S. Perritt, H., Electronic Contracting, publish and EDI Law, Wiley Law Publications New York, 1991, at 215 Section 5(2) of the Civil Evidence Act16 Ibid., Section 5(4)17See Murray, A.D., Entering Into Contracts Electronically The Real W.W.W., in Edwards, L. Waelde, C. (eds) Law and the Internet A Framework for Electronic Commerce 2nd ed. (Hart Portland, Oregon, 2000) at 26 and Downing, S. Harrington, J., The Postal Rule in Electronic Commerce A Reconsideration, (2000) 5 (2) Communications Law 4318 For example, the point at which an e-mail arrives at his service providers server or the point at which the e-mail is downloaded to the recipients computer19 Article 11 of the Electronic Commerce Directive20 Guidance for Business on the Regulations 5.29 (a)21 Section 7 (2) of the ECA22 Se e Stephen Mason, Electronic Signatures in Law, 4th edition, 2016, at 17123 Section 15 (2) of the ECA provides for 3 tests to determine the authenticity of a communication or data, which arewhether the communication or data comes from a particular person or other sourcewhether it is accurately timed and datedwhether it is intended to have legal effect.24 Section 7 of the ECA25 Section 7 (2) of the ECA26 This may be to satisfy Article 5(2) of the Directive that requires that electronic signatures are not denied legal effectiveness and admissibility as evidence.