Transcript Slide 1

THE UNITED NATIONS
CONVENTION ON THE
USE OF ELECTRONIC
COMMUNICATIONS IN
INTERNATIONAL
CONTRACTS
JEFFREY W T CHAN
Principal Senior State Counsel
(Singapore)
27 OCT 2004
UNCITRAL
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UN Commission on Intl Trade Law
Estb. by UN General Assembly in 1966
Purpose: “…further the progressive
harmonisation of Intl. Trade law.”
Membership:
• 60 states elected by GA for 6 year
terms
• Rotating membership
• Geographic representation.
WORK OF UNCITRAL
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Products of UNCITRAL:
• Intl. Conventions
• Model Laws
• Legislative Guides
• Information and Trg. Programmes
Yearly Commission Meetings
Texts prepared by Working Groups
Professional Secretariat.
UNCITRAL WORK ON
ELECTRONIC COMMERCE
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1986 – Legal Guide to Electronic
Funds Transfers
1996 – Model Law on Electronic
Commerce
2001 – Model Law on Electronic
Signatures
Wide acceptance of Model Laws
No complete harmonisation
internationally.
THE ELECTRONIC
CONTRACTING CONVENTION
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Assembling of cohesive group of experts
Greater recognition of potential of electronic
commerce
• Global marketplace
• More choices for consumers
• Equalisation of opportunities for entrepreneurs
Dramatic increase in electronic transactions
Need for greater certainty for cross-border
electronic transactions
Intl Convention preferred.
OBJECTIVES
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Project of Working Group IV
(Electronic Commerce)-commenced in
Fall 2002.
Intended to :
• Harmonise national laws on the use of
electronic communications in the
formation and performance of crossborder contracts
• Update intl conventions relating to intl.
trade to remove obstacles to electronic
commerce
Working assumptions:
• Applicability of Model Laws on Electronic
Commerce and Electronic Signatures
• Applicability of the Convention on the
International Sale of Goods (CISG).
MAIN ISSUES IN THE
E C CONVENTION
• Scope (applicability)
• Means of achieving functional
equivalence
• Form requirements
• Time and place of dispatch and
receipt of electronic communications
• Contracting through Automated
systems
• Application to other trade-related intl
conventions.
BASIC DIRECTIONS
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Apply to international contracts
Update existing laws
Avoid substantive rules
Confine to achieving functional equivalence
for electronic communications in formation
and performance of contracts
• Party Autonomy
• Flexibility for States
• No mandatory rules for other intl.
conventions but provide options for States
INITIAL ISSUES
• Rapidly evolving electronic commerce
environment (esp. Internet)
• Need to update Model Laws
• Possibility of duality of regimes between
contracts entered into electronically and
other contracts (especially when mixed
means are used)
• Objections by the Intl Chamber of
Commerce
• Objections by agencies who formulated
other trade-related international
instruments.
SCOPE
• Applies to:
 electronic communications
in connection with
 formation or performance of
 contract between parties in
different states
SCOPE
• Does not apply to:
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Contracts for personal , family or household
purposes
“contracts on regulated exchange; foreign
exchange transactions; inter-bank payment
agreements or clearance and settlement systems
relating to securities or other financial assets or
instruments; transfer of security rights in, sale,
loan or holding of or agreement to repurchase
securities or other financial assets or instruments
held with an intermediary”
“bills of exchange, promissory notes, consignments
notes, warehouse receipts or any transferable
document or instrument that entitles the bearer or
beneficiary to claim the delivery of goods or the
payment of money.”
“Electronic
Communications”
• Defined as :
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“…any communication that the parties
make by means of data messages”
• “Data Message” defined as :
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“..information generated, sent, received
or stored by electronic, magnetic,
optical or similar means, including but
not limited to electronic date
interchange (EDI), electronic mail,
telegram, telex or telecopy”.
LIMITATIONS TO
APPLICABILITY
• Art 18 :
No reservations permitted
 States can declare to confine to –
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• Where other party is in a Contracting State, or
• Where rule of Private Intl Law leads to the
application of the law of a Contracting State, or
• Where the parties have agreed that the
Convention applies.
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State can by declaration exclude
application of the Convention to any
matter.
EFFECT OF
CONVENTION
• Art 8 :
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“Contract or other communication not
denied validity or legal enforceability on
the sole ground that it is in the form of
an electronic communication”
TIME AND PLACE OF DISPATCH
(Art. 10)
• Departure from Model Law on E C.
• E/comm. dispatched when it leaves
information system under control of
originator
• For common information system – when
it is received.
• “Information System” defined as :
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“…system for generating, sending,
receiving, storing or otherwise
processing electronic communications”.
TIME AND PLACE OF RECEIPT
(Art. 10)
• Distinction between e/comm sent to
designated electronic addresses and
other addresses
• Designated addresses
When capable of being received
• Other addresses- when :
Capable of being retrieved, and
 Addressee is aware that the e/comm has
been sent to that address
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• Departure from Model Law
PRESUMPTION
• E/comm presumed capable of
being retrieved when it reaches
addressee’s electronic address.
• Note:
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“Electronic Address” not defined.
FORM OF ELECTRONIC
DOCUMENTS (Art. 9)
• General rule: no requirement as to
form
• Where writing is required, e/comm
valid if :
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“..information contained therein is
accessible for future reference”
ORIGINALS OF
ELECTRONIC DOCUMENTS
• Art. 9 (4) & (5)
• Applies where law requires an
original document (e.g. New York
Convention)
• Need for “reliable assurance” of
“integrity of information” from time
information was “first generated in
final form as an electronic
communication”, and
• “Capable of being displayed”
Proposed exclusion to rules on
originals
• Art. 9 [(6)]
• “[…where a rule of law or the
agreement between the parties
requires a party to present
certain original documents for
the purpose of claiming
payment under a letter of
credit, a letter of guarantee or a
similar document].”
WEBSITE SALES
• Art. 11
• Sales through websites are
invitations to treat, not offers
• Not binding until final click by
intending buyer
• Effect of error thus significant
ERROR
• Concern only with automated
systems
• Confined to “input errors”, i.e.
errors of action, not errors of
choice
• Operator must provide
opportunity for correction
• If not provided, input can be
withdrawn
• Conditions apply.
Withdrawal of wrong inputs
• Notification to other party
• Reasonable steps to comply with
other party’s instructions, inc.
Return/destroy goods and services
provided
• No material benefits enjoyed.
Application to other intl
conventions
• Art 19
• Applies to 6 UNCITRAL Conventions
• Applies to use of e/comm in
formation/performance of other
contracts under other intl .
Conventions
• States can opt out at any time
• Opt out can be general or specific
• Provision rather confusing.
Remaining Work
• All substantive provisions (except
Art 9 (6) completed
• “Final Provisions” not completed
• Comments by States
• Final decision at UNCITRAL
Session – July 2005
• Accession by States
• Commentary
• “Accession kit”.
CONCLUSION
United Nations Convention on the
Use of Electronic Communications in
International Contracts