Model Law on Electronic Commerce

Last Updated: 13 Jul 2020
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Driven by the need to provide protection and assurance in e-transactions, the United Nations Commission on International Trade Law (UNCITRAL) pushed for the creation of electronic signature. In their “Model Law on Electronic Commerce” published in 1996, the Commission presented the provisions on electronic signature which may takes place in the place of a hand-written approval or signature. Notably, in electronic transactions, the approval of the buyer and that of the supplier is based only on the acceptance of the offer and the submission of accounts.

Automatically, the payment is deducted from the buyer’s account while the thing bought is shipped without knowing personally the person involved in the transaction. The problem seen in online transaction as this kind is the absence or validity of the acceptance of the terms and conditions surrounding the transaction. In case of legal proceedings, parties do not have ample evidence to establish their claim because there is no complementary paper documentation to support it. On this basis and for purposes of protecting each party, Directive 1999/93/ EC of the European Parliament was created.

The Directive stated framework on electronic signature that will govern all of the member states. Eventually, the directive was implemented on May 25, 2000 through the Electronic Communication Act 2000 (ECA). In compliance with the Directive, some of the member states formulated laws governing electronic signature. Germany, for example, passed the Signaturgesetz in 1997 which lays down the standards in order for e-signatures to have legal status. According to the law, private key must be provided, kept on smart cards and be made in high security environment as protection.

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Deutsche Telekom (T-Telesec) and Deutsche Post (Signtrust) have already been certified to offer such electronic signatures. Another example is the Italian Electronic Document and Digital Signature Act 1997 or Legge Bassanini, 59/1997 Act of Italy. The law also contains provisions on the requirement for a digital signature to be legal. Meanwhile, electronic signature is “a data in electronic form which is attached to or logically associated with other electronic data and which serves as a method of authentication. ” Basically, it takes the form of a hand written signature.

However, it differs for being done electronically through a hidden password of key. Through electronic signature, two functions of signatures are fulfilled. One is as identification because the identity of the sender can be verified by the recipient of the electronically signed data. The other is as approval since the sender, by signing the data, declares his will to be bound by the contents of the transaction. Hence, through electronic signature, any buyer or supplier may instigate a claim against the other party in case of non performance of liability.

Another significant development in e-commerce law if the adoption of EU Direct Selling Directive on May 20, 1997 and implemented through the Consumer Protection (Direct Selling) Regulations 2000. This regulation is limited only to sales of goods and services on the internet, interactive digital television, mail order, telephone, fax, and advertising on television, radio, newspaper or magazines. The law is called to protect the consumers by providing them a chance to decide whether or not to buy the product. In addition, the identity of the supplier is known as well as the buyer.

Moreover, the contract can be cancelled at the discretion of the buyer within 7 working days and when the supplier failed to deliver it on time specified. Significantly, confirmation on these kinds of transaction is made in writing or other durable medium, such as fax or e-mail. In case of cancellation, the consumer is required to send the notice through the same medium and the money is returned as well. Through this regulation, transactions made online or through technological advancement are protected like the usual transaction. Any non-compliance may validly result to a legal proceeding. Hence, rights of the consumers are protected.

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Model Law on Electronic Commerce. (2018, Jun 29). Retrieved from

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