The use of data messages to form contracts may raise numerous questions that can be
expressly addressed in an electronic transactions law. First, is such a contract valid?
Some types of contracts are subject to specific requirements of form, designed to
protect particular interests or persons, as discussed in the previous section. While
national law may permit certain types of contract to be formed electronically, in the
same way that oral contracts has been recognised as valid in many legal systems, for
other it may be required that they continue to be executed in physical form, e.g. wills
concerning succession.
Second, can a data message be viewed as the expression of a party’s will (a
requirement in many jurisdictions), especially where there has been no human review
or intervention? eCommerce applications, such as the transactional webs sites, will
often enable the information system to carry out all aspects of the contract formation
process without any human intervention. As such, doubts may be raised as to whether
such contracts exhibit an expression of the party’s will. Express provision can
recognise the validity of such completely automated processes, although it is only
required where national contract law includes such a requirement.
Third, what terms are incorporated into the contract? Traditional contract law
generally enables the incorporation of terms by reference, provided the party asserting
such terms has given the other party an opportunity to refer to such terms prior to
contract formation. In a web transaction environment, there may be uncertainty
whether techniques such as hypertext links satisfy the requirements of law. Express
reference in an electronic transactions law can therefore mitigate any such
uncertainty.
Fourth, when and where can a contract be deemed to have been formed? While
strictly an issue of contract formation, issues of when and where something occurs are
generally addressed under separate provision in respect of the communication
process.
The Task Force recommends that these issues of contract law be expressly
addressed in the electronic transactions law and recommends the wording used
in the United Nations Convention on the Use of Electronic Communications in
International Contracts (2005)4 (R.6).
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Record-keeping and evidential requirements
Many of the advantages of eCommerce techniques (including the ability to keep large
amounts of information electronically for storage, searching and manipulation) are
lost if a business is required to keep paper copies of every document or
communication. Yet, legal systems often require businesses to retain certain records,
and particularly written records, for accounting, revenue or audit purposes for a given
period of time, often reflecting the needs of public administrations. In addition,
organisations will retain records for evidential purposes, such as during the period in
which a contractual or tortious action may be brought under national limitation
statutes, or to evidence ownership of intellectual property rights. Many of these
requirements are written in such a way that they appear to contemplate retention of a
4
Articles 8, 11-13.
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