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Reproduced with permission from American Bar Association The Business Lawyer (2003) 59 Bus. Law. 313-343. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

The Proposed UNCITRAL Convention on Electronic Contracts

John D. Gregory [*]

Introduction
The need for a convention on e-contracts
The scope of an e-contracts convention
   -    International contracts
   -    Virtual goods / digital goods
   -    Other exclusions
   -    Limits on legal effect
General provisions of the draft convention
   -    Signature
   -    Place of business
   -    International interpretation
   -    Location of the parties
The use of electronic communications in international transactions
   -    Basic validity
   -    Intention to offer
   -    Time and place of sending and receiving
   -    Automated transactions
   -    Form requirements
   -    Provision of information
Impact on other international conventions
Additional provision: Incorporation by reference
Conclusion

INTRODUCTION

Electronic commerce was born of electronic data interchange (EDI) and came of age with the popular use of the Internet.[1] As businesses started doing without paper, lawyers began to wonder what would happen to their traditional legal rules and practices based on paper. What of "getting it in writing?" What of signatures? What of originals? How would courts deal with electronic evidence? Further, electronic communications lend themselves readily to cross-border transactions, and with the Internet it can be difficult to know where in the world a corresponding party is located. As a result, there was an early interest in specifying and harmonizing the private law implications of using them.

The United Nations Commission on International Trade Law (UNCITRAL),[2] arguably the premier global source of commercial law reform, addressed its attention to the topic in the early 1980s.[3] It reviewed the legal response of member states to electronic communications and urged them to adapt their legislative regimes to the new practices. In particular it urged attention to questions of electronic evidence, which is understandable, since at the time electronic databases were more common than actual electronic transactions.

Subsequently, in the early 1990s, it developed a coherent set of legal responses to the principal questions posed by e-commerce, to remove barriers that traditional legal rules tended to pose to the new practices. The Model Law on Electronic Commerce (MLEC),[4] finally adopted in 1996, has been very influential around the world in providing a legal basis for commercial use of electronic communications.[5] Its basic principle is non-discrimination: electronic communications (which it calls data messages) may not be denied legal effect solely because they are electronic.[6] (There may of course be other reasons to deny them legal effect, but not just the medium of communications). It then sets out electronic "functional equivalents" to traditional legal rules requiring paper, so that data messages may have the same legal effect. For example, a legal requirement that information be in writing may be satisfied if the electronic record is accessible so as to be usable for subsequent reference.[7] Other provisions of the MLEC will be mentioned in the context of the proposed e-contract Convention in this Article.

Following the MLEC, it elaborated the Model Law on Electronic Signatures (MLES),[8] to pursue a couple of issues left in suspense by the earlier text. The main question was how to tell if an electronic signature was "as reliable as appropriate in the circumstances," as required by the MLEC.[9] The solution of the MLES appears again for discussion in the proposed e-contract Convention discussed in this Article.

After completion of the MLES, the Working Group on Electronic Commerce had three items on its future work agenda.[10] One was the legal status of electronic [page 314] transport documents, such as bills of lading and other documents of title that were themselves, on paper, tokens of value. The essential problem is that electronic documents can be perfectly copied, and tokens of value must be unique. Ensuring uniqueness and transferability is a major challenge. The MLEC had made provision for them, but the relevant articles had not been widely adopted even by countries otherwise implementing the Model Law.[11] The Secretariat of UNCITRAL made a study of the issues, but the topic has not yet been taken up in detail by the Working Group. The topic overlaps with a project of another UNCITRAL Working Group, that dealing with transport law.[12] The Working Group on Electronic Commerce thought it better just to provide expertise where needed on e-commerce to the other Working Group.[13]

A second topic for future work was to bring an array of international instruments -- treaties and conventions -- into line with current legal thinking, so they could apply to electronic communications.[14] Most had been drafted before electronic communications were developed, and their language or their concepts often seem to require paper, even if on reflection no such restriction would be needed. Some debate ensued whether it was possible to provide a central or global amendment document, or whether all instruments would have to be individually amended. The latter prospect led to the probability that many state members of these Conventions would adopt the updated version of the instrument, while other contracting states would not, leading to disharmony where harmony now existed. After a theoretical review of the options [15] and a practical, convention-by-convention review,[16] the Working Group decided that more relevant progress [page 315] would be made by turning to the remaining item: electronic contracting.[17] Indeed, the Secretariat frequently found that the main requirement to update an existing convention was to modernize its contracting provisions. As we will see, the Working Group has entertained ambitions of killing two birds with one stone on this topic.[18]

The third topic identified for future work was a more formal instrument on electronic contracts.[19] The MLEC had expressly permitted such contracts, saying that "an offer and the acceptance of an offer may be expressed by means of data messages. Where a data message is used in the formation of a contract, that contract shall not be denied validity or enforceability on the sole ground that a data message was used for that purpose."[20] The United Nations has recommended that all member states adopt the MLEC. Regional versions are proposed for Latin America [21] and for the Commonwealth of Nations.[22] Most of the legislation implementing the MLEC had adopted that provision.[23] As a consequence, devoting [page 316] more time to this topic has generated some controversy.[24] The present Article examines in some detail the issues before the Working Group, its current direction, and possible solutions to some of the issues.[25]

THE NEED FOR A CONVENTION ON E-CONTRACTS

In favor of preparing an e-contracts convention, it was said that a convention could contribute to the legislative arsenal of means of increasing legal certainty or commercial predictability in electronic business transactions -- alongside the MLEC and other instruments. Further, in some countries, conventions rank higher than laws, so even a country that has adopted MLEC in legislation may be subject to conventions that do not recognize e-commerce. Indeed, in some countries, it is easier to adopt a convention than a national law, so having the convention available may encourage wider adoption of the general rules.

The countries that have adopted the MLEC have done so inconsistently, so international transactions still face a patchwork of legal regimes. Only a convention, it is said, can bring the appropriate degree of harmony across borders. The rules of the MLEC were done as a model law at the time it was adopted because people were tentative about its solutions. Now they have proved valid and workable and deserve more legal force behind them.[page 317]

Although the U.N. Convention on Contracts for the International Sale of Goods (CISG) [26] does not require writing [27] (unless the state member has so provided),[28] it does not apply readily to all aspects of electronic contracting, so a special convention could fill in the gaps or iron out the wrinkles. Moreover, MLEC and CISG do not resolve some common issues in e-contracting, such as the effect of errors, or whether a trading partner agreement will work.

Especially if the convention goes beyond mere formation of e-contracts, as now seems very probable, it may influence the reading of the texts of other conventions. One thinks of the instruments mentioned in WP.94,[29] in respect of which the Secretariat's view was frequently that their operation could be modernized by appropriate e-contracting language.

On the other hand, a number of arguments have been made against creating a new convention. The primary one is that countries that want to promote, or just remove legal barriers to, e-commerce can adopt the MLEC. If the convention says the same thing as the MLEC, it is superfluous. If it says different things than the MLEC, it is confusing. In any event we should have a single body of law that applies to transactions in all media, paper and electronic. Having a convention for e-contracts works against this principle. (A growing number of international texts already focus on e-commerce, however, so there could be thought to be a trend in this direction).

Some reservations have been expressed about re-opening the CISG. If that happened, there is a risk that people will want to modify it as well, say by extending it to services. This could cause serious delay and also cause confusion because some countries will in the future have the "old" CISG and some the "new." Nevertheless, this has happened elsewhere, notably with the various conventions on the carriage of goods by sea, and on limitation periods, and businesses and their lawyers manage to figure it out.

If new topics need to be covered relating to e-contracts, a new Model Law could be the better vehicle. The MLEC has been very successful in this field. In the alternative, new topics could be the subject of opt-in private systems of rules, like the various rule sets of the International Chamber of Commerce (ICC). The ICC has put forward this argument itself.[30] One may ask, however, whether adoption of the supposed or proposed ICC rules might require a prior contract -- on [page 318] paper -- between the parties, or even a statutory base. It is admitted that courts in some countries have adopted ICC rules or interpreted agreements between parties consistently with them, when they are viewed as reasonable business practices.

The decision so far in the Working Group has been to continue work on the Convention. It is thought likely to help some countries influence all their laws, and stimulate a closer harmonization on matters in the MLEC and some others, as well as to influence other treaties. A statutory framework gives private agreements on form greater certainty.

THE SCOPE OF AN E-CONTRACTS CONVENTION

International contracts

The CISG applies to transactions between parties located in different countries, where (roughly stated) the countries are member states of the Convention, or one of them is, and a member state's law applies.[31] The Working Group debated whether the e-contracting Convention should be similarly limited, or should apply to all e-contracts.[32]

In favor of applying it to all transactions, people have argued that it is just too hard to know where parties are when they are dealing online, especially for goods that are deliverable online (or services performable online, if the convention were to apply to services too). As a result, it will often not be possible to characterize a transaction as international rather than domestic, particularly at the time the contract is made, which is when the parties may need to make decisions based on what the applicable law is.

In any event, many countries need domestic rules for e-contracts. It makes sense that local and international rules for e-contracts should be the same, especially as the number of international transactions even by smaller merchants is becoming significant.

In favor of restricting the text to international transactions, however, it is said that the goal is to develop an electronic parallel to CISG, which is restricted to international transactions. Domestic sales law varies significantly from country to country, and a convention that purports to change domestic law risks not being widely ratified. The broader the scope of the Convention, the more tempted countries will be to avoid its application to or interference with domestic law. On the other hand, one could work around this risk by allowing a reservation or declaration on the point.[33] Conversely, a country implementing an international convention could make its domestic law conform to the convention at the same time.

WP.100 applies the Convention to e-contracts where the parties are in different states when the states are contracting states or the law of a contracting state applies [page 319] (the same rule as the CISG).[34] This appears to be the right decision: it is probably too hard to influence domestic law. UNCITRAL can encourage ratifying states to extend the Convention to their domestic law if they have no pre-existing provisions. The Working Group may try to draft provisions so they will fit domestic situations too. Further, the draft Convention also allows parties to opt into the Convention,[35] though the Secretariat asks if that is appropriate.[36] The Convention sets out rules for determining location, including the effect of declarations of location.[37] Finally, the Convention requires parties to disclose where they are, which provides some evidence of the applicable law.[38] We will look further at these questions in dealing with the pertinent articles.

Consumer transactions

Once it is decided what the general field will be -- international contracts -- then it is necessary to decide whether any international contracts will nevertheless not be covered. Perhaps the largest class of debatable contracts is those with consumers. CISG excludes sales for household or personal use, where the seller ought to have known (from the character of goods or the character of buyer, for example) that the sales were of this type.[39] The Working Group has been trying to decide if its e-contract Convention should also exclude consumer transactions.

There are several ways that such an exclusion could work:

i) The Convention does not apply to sales for consumer goods (same rule as CISG), where seller ought to be aware of consumer nature of transaction (or whatever the eventual test is).[40]

ii) The Convention applies to all transactions, but attempts to provide some measures of consumer protection (this is not, strictly speaking, an exclusion).

iii) The Convention applies to all transactions, but yields to consumer protection laws, as is provided in MLEC and MLES.[41]

iv) The Convention applies to all transactions -- but the Working Group would study the full text when complete to see if any of the agreed provisions [page 320] have effects on consumers that should be dealt with, by exclusion, limitation, reservation, or varied disposition.

In favor of including consumer transactions, people argue that it is too hard in practice to know when one is dealing with a consumer, in electronic commerce, so excluding them makes the law applicable to transactions too uncertain for the merchant. (In other words, the "ought to have known" test of the CISG is not realistic online). Moreover, consumers benefit from certainty in e-contracting too. Most or all of the likely subjects of a convention -- formation, time of delivery, and so on -- cause no harm to consumers. They need clear law in international transactions as much as businesses.

If necessary, it is said, the Convention can take the approach of the Model Laws, and yield to consumer protection rules otherwise applicable to the transaction, to the extent necessary to protect consumers but not otherwise. The "hard part" about consumer rules is limiting enforcement and other remedies, and the Convention is unlikely to touch on these subjects.

Those who argue against including consumer transactions say that consumer protection rules are too political and too locally varied to submit to harmonization. In any event, UNCITRAL is dedicated to trade law and has little or no consumer law expertise. (It must be said, however, that no one is asking it to draft consumer protection law, in all the variants, just to extend its general benefits to consumers).

There is a fear that rules suitable for business-to-business ("B2B") transactions will be watered down or otherwise made less desirable in order to accommodate consumers.[42] For example, the Convention may deal with click-through contracts, and they raise consumer issues right at the formation stage, especially when they are not negotiable. Thus there may turn out to be little room for non-controversial inclusion of consumers. Trying to accommodate consumers will slow down adoption of the Convention and impair its chances of being ratified once it is adopted, because of the local politics of consumer protection. CISG does not apply to consumer transactions, and the goal of the Working Group should be to keep parallel to CISG, except as technology requires a variation from it.

The Working Group decided in its May 2003 meeting to defer the question, i.e., not to exclude consumers but to revisit the question when the Convention was complete to see if any accommodation or exclusion needed to be made.[43] The principle was not to water down the Convention to make room for consumers but to see if consumers would benefit rather that suffer from its global rules.[44] In any event the Convention would yield to more specific domestic rules intended to protect consumers.[page 321]

There has been little or no discussion at the Working Group on providing special treatment for "mass market" contracts, i.e., contracts of adhesion for business or consumer parties, where the buyer has no real opportunity to negotiate terms.[45] Some people had thought that this concept could be a "B2B" solution for realities of the Internet market. It is not completely clear, however, that such transactions would be easier to identify ahead of time than a transaction with a consumer.

Virtual goods / digital goods

The draft Convention makes only two express exclusions from its scope: consumer transactions, in one of two variants, and -- in both variants -- contracts granting limited intellectual property (IP) rights.[46] This IP exclusion is understandable, difficult and controversial. It is undoubtedly important.

The exclusion is understandable. The retention of some rights makes the transaction look less like a sale and more like a license, which in some countries is treated differently in law from a sale,[47] so harmonizing the applicable rules in the UNCITRAL Convention looks more challenging. Increasing numbers of products carry some sort of intellectual property implications. Some goods are mere carriers of IP, such as compact disks sold not for themselves but for the music or text or software they contain. One can think of these as "digital goods," though the terminology in this whole field is not universal or stable. Usually it is the content owners who sell the goods themselves. In other cases, one finds IP embedded in goods sold for purposes not clearly related to it. One thinks of software that enables the goods to work better or to have more functions, like computers in cars. These "smart goods" are usually sold by merchants who may not themselves have rights to do anything with the IP but embed it. The existence of the IP introduces an additional party to the transaction, one who may not be actively involved. In between digital goods and smart goods one may arguably find computers themselves, which have valuable hardware but which are of limited use to many purchasers except with operating systems and other bundled software that makes their purchase attractive. Usually the IP is owned by someone other than the computer manufacturer or seller.

The purchasers of all these goods do not acquire with the purchase the right to do anything with the intellectual property that comes with them, beyond use it personally or in their business. That is not particularly surprising. A purchaser of a book acquires the right to read the book and to lend it or resell it, but not to copy it or transform the content by translation, adaptation, and so on. Yet books [page 322] are sold under the CISG. In the digital age, however, the IP rights are expressed to be more limited than those in books, so that the purchaser of software, for example, often has the right to use it in only one computer and not a network. Tax preparation software has been sold to create only a limited number of tax returns. In other words, transaction documents contain more licensing terms.

The rights so expressed in IP are governed by the contracts, but they also depend on the validity of the claims to the IP, which is a creation of national law. The parties to international contracts may have different IP rights to the same subject matter in their different countries. The trend to harmonizing IP rights through conventions continues apace but has not reached uniformity. Part of the impetus to exclude these contracts from the UNCITRAL Convention may be to avoid approving their use to extend IP rights beyond where IP law itself has taken them. This is not much of a problem with books because global harmonization has gone much further with them, having had more time to do so.

The area presents a number of technical difficulties, too. For one thing it is sometimes hard to say when a good is being sold for its IP content and when the IP content is intended to enhance the use of the good as a good. Vigorous but inconclusive debates on this point have accompanied the development of the Uniform Computer Information Transactions Act (UCITA) in the United States.[48] For another, increasing numbers of products have some IP, sometimes for reasons that appear more related to suppressing competition than to improve the functioning of the products themselves.[49] There may not always be an express reservation of IP rights but the owners assert the rights as it serves their interests. So knowing just what is excluded from the Convention will not be simple. It is hard to argue that focusing on the product sold -- digital goods, smart goods, "virtual goods" -- makes the application any easier than looking for a limited grant of IP, as in the current draft.[50]

Excluding transactions that limit IP rights is controversial in part because it risks excluding an ever-larger number of contracts that might benefit from the Convention's rules. Further, many of those rules will go to procedural matters like the formation of the contract or the communications necessary for its [page 323] administration. These may not be problematic even for contracts that have aspects of licenses.

On the other hand, substantial numbers of these IP-reserving agreements arise through online activities, like clicking icons on a screen. The IP provisions may not be directly presented to the purchaser but available only through a hyperlink. Some people are concerned that this kind of process should not be legitimated by the Convention. It may be objected that the law generally recognizes standard-form or non-negotiable contracts in many circumstances. Numbers of people are concerned that contracts are being used to overextend IP protection, however, or that they are otherwise simply unfair, and they do not want to see the Convention make the contracts more readily enforceable.

A number of responses may be made to the skeptics, though. The first is that the Convention provides only that contracts may be effectively formed online, in that their electronic form does not in itself invalidate them.[51] The usual laws of contract will still apply, such as that the parties must have an opportunity to review the terms, or -- in some legal systems -- that the terms must be brought to the attention of the parties, before the agreement is formed. If the hyperlinked IP provisions do not meet these tests, then the Convention will not make them enforceable. The second is that the draft Convention does not affect the essential validity of the transaction.[52] If the transaction is unconscionable under the applicable (domestic) law, the Convention will not save it. The third is that parties may opt out of the Convention, or possibly vary its provisions.[53] The Convention can be drafted in broad terms, and those who do not choose to have it apply to contracts involving IP can choose that it will not apply. One may debate the likelihood of informed choice in such matters, though, especially for mass market transactions or for sales to consumers, if they are to be covered.

On balance, the better solution seems to be not to exclude these transactions, however defined, and to let the controversies be resolved under other law. In May 2003, the Working Group agreed to seek advice from the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO) whether including such contracts would risk prejudicing any established rules about intellectual property.[54] [page 324]

Other exclusions

It is generally acknowledged that a general enabling of electronic transactions may not be appropriate for some kinds of contract, or some kinds of party, or some kinds of goods. Even the Model Laws allowed the states that implemented them to narrow the scope of their key provisions, without saying what should be excluded.[55] WP.100 takes a similar approach, contemplating that each contracting state may make a declaration excluding certain matters from the Convention for its purposes.[56] The provision is square-bracketed, meaning it has not attracted much consensus to date. It is a bit difficult to see just how a patchwork of different exclusions would work for actual transactions. If states A and B were both members of the Convention, businesses would still have to figure out which law applied to see which variation of the Convention applied. This may be inevitable, however: the same calculation has to be made for rules not covered in the Convention, and to see if there are mandatory rules in either state that would override the Convention.

It may be necessary to give contracting states the power to exclude matters that it wants especially to hold to particular rules, but ideally these one-off exceptions would be rare. It would be preferable to have a limited number of exclusions spelled out for everybody in the Convention. Exclusion from the Convention does not result in automatic invalidity, as we will see in the discussion of opting-out below.

In this context, what might be excluded for all contracting states? CISG excludes service contracts, contracts for electricity, and contracts for ships, aircraft and hovercraft.[57] The Working Group is aiming to include services for e-contracts, which will avoid the difficulty of contracts that have elements of service and elements of goods in them. The other CISG exclusions seem directed to items that involve too much public policy to be the subject of private law contracts, though the pace of privatization of airlines and power distribution in the twenty-five years since CISG was prepared may change that perspective.

It has been suggested that the Convention should not apply to certain financial services or transactions by financial institutions, on the ground that these organizations are generally regulated closely already or that their goods are subject to detailed legal regimes or system rules on e-transfers.[58 ] On the other hand, the U.N. Bills and Notes Convention [59] applies to some kinds of transactions by such institutions. Some parts of the financial service industry may be more likely to favor a convention than others. Some financial transactions are crucial to electronic commerce and it would seem unfortunate to exclude them. One could leave it to the participants to exclude the Convention by contract if they do not want it to apply, rather than having the Convention not apply on its terms. If the exclusion were limited to participants in regulated markets, one might escape the difficulty of defining financial institutions -- but defining adequately regulated [page 325] markets might be no easier. Other markets governed by well-established system rules or widely recognized practices might be excluded as well.

A frequent candidate for exclusion is transactions in land.[60] While land is generally not "goods" under most legal regimes, the e-contract Convention does not speak of goods or services but of contracts. One cannot depend on categorization of the subject matter to produce an exclusion. Including real estate might facilitate new e-commerce transactions, practices or markets. Land transfers are excluded from many implementations of the MLEC,[61] though not UETA in the United States. The Convention in any event would not deal with any domestic registration requirements, and would probably not deal with additional formalities of execution such as use of a notary. One might ask whether it is worth drafting as if land transfers were included, under these circumstances. Is it worth trying to get some commonality for contracts in an area where domestic law is so variable? It might be useful to try to draw a line to include some kinds of financial instrument that may rest on the security of real estate, even if transfers of the land itself were excluded.

Other sources of potential exclusions are the European Union's Directive on Electronic Signatures,[62] the U.S. Electronic Signatures in Global and National Commerce Act (E-Sign),[63] UETA,[64] and others.[65] Some of these are suretyship contracts, family law contracts, wills and trusts. Most of these are not commercial, and those that are commercial need to comply with other form requirements that could render the rules of a convention speculative at best. Some argue that they might be excluded for evidentiary reasons, in that they require special proof of execution that will not be provided for in the Convention. The Working Group made no decisions on other exclusions in May 2003.[66]

On balance, one is inclined to advocate the fewest exceptions consistent with the proper operation of otherwise regulated markets and with the protection of parties for whom special form or registration requirements are created. In other words, the Working Group may choose to exclude transactions from the Convention if their presence in it would mislead parties to think that conforming to the Convention would validate the transaction. For example, covering land [page 326] transfers might distract attention from a need under domestic law to register the transaction in order for it to be effective against third parties.

Limits on legal effect

The rules of the Convention will apply to electronic communications (what UNCITRAL calls "data messages") used "in the context of" contracts between parties in different states.[67] This language is not limited to the formation of contracts; it could apply to modification or termination, as well as notices and other communications under the contract. As we have just seen, certain contracts will probably be excluded from its scope. In addition, the draft Convention contemplates certain limits to its legal effect, even for the transactions it covers. Articles 3 and 4 are the relevant provisions.

Article 3 says that the Convention is "not concerned with" the validity of contracts (except that using electronic communications does not invalidate them), the rights and obligations of parties arising out of the contracts, or the effect that the contracts may have on the ownership of rights created or transferred by the contracts.[68] Such alleged limits do not necessarily restrict the effects of actual substantive provisions later in the Convention. We have seen earlier how stopping short of validity may affect the coverage of contracts granting limited IP rights.[69]

WP.100 raised the prospect that the Convention might apply to transactions, not just contracts, which in turn raises the question whether there is to be a commercial limit to its application. No such limit is found in the current draft. Article 1(3) says that the Convention takes no regard of the "civil or commercial character" of the parties.[70] This seems intended to ensure that governments will be covered, at least for their contracts. But in some places, the delivery of government services to the public is based in part on transactions. This Convention is not intended to apply so widely,[71] and for this reason among others the reference to transactions was dropped by the Working Group in May 2003.[72]

Article 4 deals with an optional limit to the effect of the Convention, at the choice of the parties to the transaction. It provides that parties may exclude the application of the Convention or derogate from or vary the effect of any of its provisions.[73] This is much like Article 6 of CISG. Just as that article prevents varying Article 12, which deals with mandatory writing requirements, so the draft [page 327] e-contracting Convention is open to exclusions from the right to vary. The Secretariat notes Article 13(2) on error-correction methods and Article 15 on information to be provided by contracting parties as potential mandatory rules.[74]

The opting-out question is a bit more complex with the e-contracting Convention than with CISG, however. For one thing, the notion of consent underlies the whole Convention, because of Article 4(2): "nothing in [the Convention] requires a person to use or accept [information in electronic form] [data messages], but a person's consent to do so may be inferred from the person's conduct."[75] So even if the Convention applies on its terms, for example because the states where the parties are located have ratified it, the rules giving effect to e-contracts will operate only if the parties agree to communicate electronically. They do not have to opt out; they have to opt in, at least by their actions.

Moreover, Article 1 of the draft Convention allows the parties to choose to have the Convention apply, even if it does not by the choice of law rules.[76] This provision, which does not have a parallel in CISG, gives the Convention an unpredictably, though possibly desirably, broad scope.

The right of the parties to opt out of the Convention or (possibly) any part of it gives the Convention the character of a "safe harbor." One can get certain legal effects by choosing and conforming with the Convention, but it is clearly contemplated that legal effects may be obtained under applicable law if one does not rely on the Convention. This provides the maximum of party autonomy. It provides indeed a good deal more autonomy than did the MLEC, whose rules are echoed in parts of the draft Convention. [77] The MLEC did not allow the parties to adopt their own standards for meeting legal requirements for writing, signatures or original records.[78]

The breadth of the parties' right to choose helps reduce the impact of Convention articles that make people uncomfortable, because they could ignore these articles and still hope for valid contracts. If one varies the terms, however, can it be that the Convention will make the variant terms as legally enforceable as the original terms? Variations will generally not be expressed as such, but will simply use language inconsistent with the Convention.[79] Perhaps the varied terms will [page 328] be effective only if they are available under the applicable national law. This is especially likely to be true, indeed express, if the Convention applies to consumer transactions.[80]

GENERAL PROVISIONS OF THE DRAFT CONVENTION

Because a primary purpose of the Convention is to provide a binding method of achieving the legal results of the MLEC, the draft relies on definitions also used in the MLEC. Four terms are added ("automated information system," "offeror," "offeree" and "transaction") and variants are suggested for another ("place of business").[81] The Secretariat has offered others for consideration.[82]

Signature

The definition proposed for "electronic signature" was taken from the MLES. It is defined as data in, affixed to or associated with a data message which may be used to identify the person able to create the signature and indicate that person's approval of the information in the signed message.[83] One may wonder whether this definition adds anything to the general law of the nature of a signature, beyond what is needed to account for the electronic medium. It might be dropped, even though it has previously been accepted by UNCITRAL in a Model Law.

There is arguably a problem with the concept of identifying the signatory. The definition as stated could prevent an "I agree" button, or an "OK" button, from being a signature. It may be preferable that a signature can be something that can be attributed to a person, without itself identifying the person. Consider the UETA's definition, by which an electronic signature is "an electronic sound, symbol or process . . . executed or adopted by a person."[84] Who the person is can be proved by any available means but is not necessarily shown by the signature itself.

The definition says that the signature indicates the originator's "approval" of the information.[85] The term "approval" has caused much debate at UNCITRAL over the years. Many have thought that it means only "consents to be associated with the information," and does not mean "consents to be bound by the information." Under that interpretation, it could be said that there is not much difference intended in principle between approval and attribution. It is probably appropriate to say something of the requisite mental state for a signature, though [page 329] not necessarily "approval." The UETA speaks of "intent to sign," thus incorporating but not changing the existing law on the effect of signatures.[86] To make the "I agree" button into a signature, one would have to show the intent to sign, not just to approve the contract. An acceptance sufficient for a contract is not necessarily a signature.

Place of business

The MLEC and other UNCITRAL texts use the phrase "place of business" without defining it. The term can be relevant both in determining when a contract is international [87] and in deciding where a message is sent from or received.[88] The draft Convention proposes two variants of a definition. Variant A is "any place of operations where a person carries out a non-transitory activity with human means and goods or services."[89] Variant B is "the place where a party pursues an economic activity through a stable establishment for an indefinite period."[90] Variant A requires that human means and goods or services be involved. A machine (e.g. server) would not suffice. Variant B speaks of "economic activity,"[91] but this is likely to be presumed for A in this context. Variant B arguably requires more of a fixed physical address than A. Some members of the Working Group have wanted to add a reference here to the place of incorporation.[92]

Variant A seems slightly more desirable. It would extend the Convention to more transitory activity that would nevertheless be international in substance. Finding facts in support of either definition supports the application of the Convention but may not support a finding of jurisdiction of courts or of application of the law of that place. Taxability will be decided by others in any event.

The Working Group is not yet fully persuaded that a definition of place of business is necessary at all. If the concept of "internationality" is retained in the Convention, as appears likely, the Working Group will consider alternative triggers or criteria for when the Convention applies. This is discussed further in connection with Article 7, below.

International interpretation

Under Article 6, the Convention is to be interpreted according to its international purposes "and to the need to promote uniformity in its application and the observance of good faith in international trade."[93] Questions not expressly resolved in the text of the Convention are to be determined in accordance with its principles, failing which one looks to the law applicable to the transaction. This [page 330] is a standard UNCITRAL provision, also present in the two Model Law.[94] It is unlikely to be significantly amended.[95]

Location of the parties

Article 7 is a key provision of the Convention, if the Convention applies only to international transactions. The primary rule is that the parties are taken to be located where they say they are.[96] This power to declare location is limited by a provision with two variants. Variant A is simply that the party does not have a place of business at the declared location.[97] Variant B adds that the declaration is made solely to trigger or to avoid application of the Convention.[98]

What is the effect on choice of law if a party makes an incorrect declaration -- intentionally incorrect or negligently incorrect or just incorrect without fault? The Convention is silent on that question.[99] The Convention does not apply if the international character does not appear from the contract or dealings or information exchanged between the parties.[100] Because any party can opt out of the Convention by saying so, it seems unlikely that anyone would make a false declaration of location to achieve that result. Under one variant on scope,[101] parties can opt into the Convention too -- so the location provisions become less useful altogether. One might declare location falsely not to get the Convention to apply but to mislead the other party as to the otherwise applicable law, which, as we have seen, comes into play in several circumstances.[102]

The location of the technical equipment used for e-contracting, and the place from which an information system can be accessed by others, do not constitute [page 331] a place of business, unless the entity has no other place of business. It may appear undesirable for an entity to be considered to have its place of business in one country for offline business and in a different country for its online activities. The Working Group is trying to avoid such a result.[103]

The Working Group has discussed whether a country-specific domain name (cc-tld) of an Internet address can be taken as an indication of, or evidence of, the location of a party.[104] The original impression was in the negative, but that may change where the domain name is restricted to those with some presence in the country (such as .ca) rather than being open to any purchaser (such as .tv).[105] It seems preferable to allow at least a presumption of location to parties with domain names in countries with restrictive policies. The more help in determining location, the better for the application of the Convention. It is arguable that almost any reasonable arbitrary rule might be of value in itself, however provable or factual, because commercial parties often seek just about any reasonable rule that is certain.

THE USE OF ELECTRONIC COMMUNICATIONS IN INTERNATIONAL TRANSACTIONS

Basic validity

The early provisions on e-contracting are not surprising. Article 8 provides that the use of electronic communications does not in itself invalidate a contract.[106] This rule is taken from the MLEC.[107] The time of formation rules are the same as in the CISG: the offer and acceptance are effective on receipt (here stated in terms of the message "reaching" the other party).[108] So there is no mailbox rule (as there is not in the CISG). The Working Group has vigorously debated whether the time of effect rule should be included, in part for fear of changing domestic rules on the point. It has been left in for further discussion.[109] Because the same rule is in the CISG, it seems the better argument is to have it in this Convention too, to maintain harmony among paper and electronic contracts in international instruments. Any international rules may on occasion differ from some country's domestic law.

Intention to offer

Under Article 9, a generally accessible offer is only an invitation to treat, unless otherwise specified.[110] This answers a common question about Internet sites. One [page 332] may ask how accessible "generally accessible" has to be. The term is used in contrast to "addressed to one or more specific persons."[111] It seems unlikely that one would have to show universal accessibility to qualify, rather than just an opening to the public in general.

Paragraph (2) of Article 9 deals with automated systems,[112] i.e., those in which the contract can be concluded without human intervention at the machine end, typically in a Web site. Two policy choices are given. Variant A presumes a contrary intention to the general electronic message.[113] A facility that offers an automated transaction would be presumed to be an offer and the message of order -- normally "I agree" or "OK" -- would bind the merchant as an acceptance. Variant B says the language of offer through an automated system does not in itself show an intention to be bound by an acceptance.[114] Variant A seems preferable, to increase certainty and efficiency of electronic transactions. It is easy enough for a merchant to express a contrary intention -- not to be bound by its automated web site -- if that is desired.

The Working Group has expressed concern, however, that commercial practices are not stable in this area.[115] Some merchants expect one result and some the other. Choosing either could disrupt expectations, but choosing neither prolongs uncertainty. In May 2003 it decided to merge paragraphs (1) and (2) to make all apparent offers into invitations to treat, subject to further reflection.

One may question how the purchaser knows that the transaction will be automated rather than depend on further active attention at the merchant's end. Alternative wording in the draft speaks of an application "that appears to allow for the contract to be concluded automatically."[116]

Article 10 says that in general, communications done pursuant to a contract may be entered into by electronic means.[117] It is the same as MLEC, but with somewhat broader language. A square-bracketed paragraph allows contracting states to exclude some communications from this article, without guidance as to what might be excluded. The Working Group will attempt to create a list of exclusions in future meetings.[118] One may wonder if it is useful to allow contracting states to exclude some kinds of communications or contracts from Article 10, rather than from the Convention as a whole under earlier provisions.[119] Does it [page 333] make sense to allow exclusion for communications pursuant to contracts but not in Article 8 for the making of contracts?

Time and place of sending and receiving

Article 11 is more complex. It deals with the time and place of sending and receiving messages.[120] Variant A is the same as Article 15 of the MLEC,[121] with an added provision about messages sent and received within the same information system [122] like that in the UETA [123] and the UECA.[124] Variant B is much simpler and shorter: sending occurs when the message is out of the sender's control, and receipt occurs when the message is capable of being retrieved and processed by the addressee.[125] Variant B does not mention the place of sending or receipt, just the time.[126]

The rules on sending seem acceptable. They do, however, raise the question whether messages sent from the same place at the same time by the same sender will be deemed at law to come from different places, depending on whether they are sent electronically or by post or telephone. The rules on receipt are more debatable, partly because many things can still go wrong in electronic transmissions. It is arguable that the rule about time of receipt should only be a presumption, given the uncertainties of e-mail delivery.

The Article 11 rule on receipt turns on whether a system has been designated by the addressee, expressly or by use.[127] It may be debated how one knows the fact or the limits of a designation. It could certainly make a difference in domestic law whether the sender or the addressee has designated the address for sending, whether the contract is in a negotiated or standard form, and whether the address has an individual rather than public or widespread designation. Under the UNCITRAL rule in Article 11, it may be difficult to know how to de-designate a designated address, especially if one has designated it by use (as contemplated by the UETA).[128] How does one know who has seen the designation? Quebec's rule requires the address to be designated and active at the time the message is sent.[129] It does not say how the sender is supposed to find out the status of the address from time to time.

The draft Convention's rule about receipt where the addressee has not designated a system appears to be unfair: that a message is deemed received when the [page 334] message enters the undesignated system.[130] The rule is in effect the same as for a designated system -- i.e., the message is received when it enters the system.[131] The UECA says that such a message is received when the addressee becomes aware of its availability in the system.[132] The UETA is silent on this point. The Working Group, however, has heard arguments that the Canadian and Australian rules requiring awareness make the rule too subjective and may prejudice the sender who has no other address for communicating with the addressee.[133] The Working Group has proposed alternatives based on the reasonableness of the sender's or addressee's conduct.[134] The issue is expressly a matter of allocation of risks and responsibilities, so this approach may prove fruitful.

The rule in Article 11 (and in MLEC) is different when one sends a message to one system when the addressee has designated a different one: the message is deemed received when retrieved, which allows the addressee to avoid "receiving" a message known to be in the system.[135] Thus, the rule may be too strict. The UETA is silent on that point as well, but the Comment to Article 15 says that receipt in such a case would be determined under "the otherwise applicable substantive law."[136] The UECA and the Australian ETA do not address this case. Arguably, an awareness rule would be appropriate here as well.

The Working Group would do well to consider providing more detail about receipt, such as requiring the message to be accessible, or in a format or language comprehensible to the addressee, or processible by the addressee's equipment.[137] The issues are very much at play in the Working Group. Notwithstanding these issues, one might conclude that any reasonable arbitrary rule would be better for transactional practice than no rule. Article 11's provisions have the merit of familiarity to those who know MLEC, even if some countries have adapted it fairly dramatically.[138]

It would be useful to spell out in an explanatory text how one designates a system, how one de-designates it, how one might prove or disprove receipt in a system, and other related questions. One might also give some guidance regarding the problem of genuine designation, rather than designation by contract of adhesion (which is not just a consumer protection issue). If one were tempted by the alternative rule found in Quebec -- that the sender has to know that the address [page 335] is active -- how is this to be done? Perhaps the sender must test the address first, while the current rule in Article 11 would suggest getting an acknowledgement to be sure of receipt. It may be noted that Variant B to Article 11 gives no protection at all against the unexpected message [139] and is probably undesirable for that alone.

Automated transactions

Article 12 makes contracts involving an automated program on one side or both sides acceptable at law even without human review. The language is very much like that of the UETA on the same point.[140] The U.N. Secretariat points out that this does not change the legal result, and that the person in whose name the automated program makes the contract is bound by that action.[141] This seems inevitable, even if such automated programs may at some point deviate from the express intentions of their owners.[142]

Article 12 says a contract "may be formed" by automated systems.[143] It is open to argue that on particular facts, a contract has not been formed. For example, some local laws require that particular provisions be brought especially to the attention of potential contracting parties, or be especially prominently displayed. An automated mechanism might not seek out or notice such provisions. In any event, proving that they were sufficiently conspicuous could be very hard. While this could be grounds for an attack on the contract, the Convention should not attempt to avoid such laws. One can leave to jurisprudence the task of working out the details of display requirements. They probably become less important if the Convention does not apply to consumer transactions or yields to consumer protection rules.

Article 13 provides two variants on rules for correcting errors in automated transactions.[144] Variant A requires a person offering goods or services to make available the means for others to identify and correct errors before making a contract.[145] These means must be "appropriate, effective and accessible."[146] This idea is taken from the EU E-Commerce Directive,[147] influenced by the UETA,[148] [page 336] which does not however make the identification and correction of errors a free-standing obligation.[149]

This obligation appears to be too broad. It applies to the party offering goods or services through an automated system, but does not contemplate that a party buying them may also use an automated system. If so, a contract is formed before either party is aware of the error. The original idea for this came from the UETA. It aimed to remedy a problem that arises particularly in automated transactions -- that a human being may make a simple mistake (e.g. a "single keystroke error") and have no way of notifying the other side, i.e. a robot or computer program, that the mistake has been made. The provision is not intended to replace the general law of mistake but to deal with that one issue.[150] The UETA and UECA therefore limit the remedy to human beings that deal with machines. Because the issue is human error, the rule there applies to any communication by a human, whether on his or her own behalf or on behalf of a corporate employer.

Variant A of Article 13 permits the parties to opt out of this obligation.[151] It seems odd that a person dealing with an automated program should be able to agree that there will be no error-correction technique available before contracting. The U.N. Secretariat raises the issue that this opting-out may be implied rather than express -- e.g., someone who proceeds to contract without finding an error-correction mechanism may be held to have impliedly consented to its absence! [152] That provides little relief to the error-prone human.

After that gap, Variant A specifies the characteristics of the means of error correction: appropriate, effective and accessible.[153] One could ask whether "accessible" means the same as in its other uses in the Convention or something else. Common law would probably apply a "reasonable user" standard, but other legal systems might not. The ease of opting out, however, makes this level of analysis rather superfluous. Presumably, the consent to the absence of an error-correcting mechanism prevents the legal remedies of paragraph 2 from applying to the transaction.[154] There is no apparent reason to allow opting-out, because the risk presented by the rule is so readily overcome by an error-correction mechanism. The standards for this mechanism are achievable with certainty.

Variant B is closer to the UETA [155] and the UECA.[156] It does not require the person establishing the automated system to provide an error-correction mechanism, but it allows the person dealing with that system to avoid the consequences of an error on the same terms as in Variant A.[157] Both variants' square-bracket conditions are concerned about returning the goods received as a result of the [page 337] error and not benefiting from the error.[158] The provisions may be important to automated vendors. The purported vendor would want to be sure that the apparent purchaser has not derived any benefit from the contract, especially where the goods sold are digital and may readily and undetectably be copied or used before being "returned" or "destroyed" by the purchaser.[159] Although this may be difficult to demonstrate, it is a question of proof rather than of the rightness of the rule, and questions of proof will always vary with the facts. Vendors who are worried about this question can readily avoid it by providing an error-correction mechanism as part of its automated offer. The equivalent provision seems to work in the UETA and UECA, or at least has not yet created litigation.

Form requirements

Article 14 deals with form requirements and how to satisfy them electronically.[160] The first paragraph repeats the rule of CISG that the Convention does not require a contract or related language to be evidenced by writing or to be in any other particular form.[161] The second paragraph says that if any other rule of law requires the contract to be in writing, that requirement is satisfied by an electronic message whose information is accessible so as to be usable for subsequent reference [162] -- i.e., the test of the MLEC.[163]

The third paragraph deals with signing requirements.[164] Variant A is essentially Article 7 of the MLEC. Variant B is essentially Article 6(1) of the MLES. Both variants have an "appropriate reliability" test that the United States and Canada have not adopted in their laws implementing the MLEC.[165] Paragraphs (4) and (5) are the same as paragraphs 6(3) and (4) of MLES, as to what makes a signature reliable. Paragraph (4) is essentially the "advanced electronic signature" test of the EU Directive on Electronic Signatures,[166] or the "secure electronic signature" test of the Illinois Electronic Commerce and Security Act,[167] or of the Canadian Personal Information Protection and Electronic Documents Act.[168] Paragraph 5 says that one may prove the reliability of the signature by other means, or show its non-reliability in any event.[169] [page 338]

Given that these reliability rules are in the MLEC and MLES, it may be hard to eliminate them in this Convention. If they are in the Convention, however, countries that opt against an extra reliability test for electronic signatures may not adopt it. That may not matter much if those countries have implemented the MLEC. The Convention seems really designed for countries that have not adopted the MLEC.

It may be possible for parties to agree to vary the signature provisions of the Convention to remove the reliability rule. While that is a legal possibility, it may be asking too much of commercial parties that they should know enough to make such a variation expressly or by spelling out a different signing process that suits their needs. It is also awkward to extend the private right to vary the Convention, under Article 4, to varying it provision-by-provision or almost concept-by-concept, saying as it were, "all but the reliability of signature rule." Arguably, it would be better if the Convention expressly permitted contracting states to opt out of the reliability test by a declaration. Because common law jurisdictions have generally found the reliability test unnecessary, there should be a way to eliminate it. People from other countries, however, may choose not to recognize e-signatures from countries without the reliability test.

Provision of information

Under Article 15, parties dealing through information systems have to provide information on their names and incorporation details, if any, their location and address, and a method for contacting them, including an e-mail address.[170] This information must be "easily, directly and permanently accessible" to parties accessing the information system.[171] The information is to be provided in electronic advertising, either in the text or by reference, as well as on transactional sites.[172] Contrary to the rule on transactional sites, the advertising does not have to be generally accessible to the public for the rule to apply.[173] The language is inspired by that of the EU E-Commerce Directive of 2000,[174] in turn inspired by the EU Distance Selling Directive of 1997.[175] The whole article is square-bracketed because it deals with content, not form of contracts.

One may ask whether this is appropriate information to require for electronic contracting by anyone at any time. Note that the information on location is intended to support the Article 7 rules on when a contract is international for the purpose of the Convention. n176 Some of the categories of mandatory information may be more acceptable than others in this light.[page 339]

The Article 15 rules apply when the information system is "generally accessible to the public."[177] Presumably, a web site protected by password would provide similar information to anyone to whom it issued a password. The information is also to be "permanently accessible" to parties accessing the information system.[178] "Permanently" probably means "at all material times," or "without interruption for the period during which it is likely to be relevant."

The draft Convention does not, in its present form, say what the effect is on a contract if a merchant fails to comply, or complies poorly, with the requirements. This omission is fairly standard with UNCITRAL texts, leaving such matters to local law, but it may be a deficiency.

Article 16 continues in the same vein, requiring more information. A party making goods or services available through an information system that is generally accessible to the public (i.e. the same party as in Article 15) must make the electronic messages containing the contract terms (one or more messages in total) available to the other party for a reasonable period "in a way that allows for . . . their storage and reproduction."[179] The message is not considered capable of being stored or reproduced if the originator inhibits printing or storage of the message.[180]

This is a substantive rule of law, though it relates to contract formation and the ability of the purchaser to prove the terms of the contract. This too is taken from the EU E-Commerce Directive.[181] The language in Article 16 regarding capability of storage is taken from the UETA, as is the provision about inhibiting printing or storage.[182] As with the UETA, Article 16 does not state the level of capability (i.e., capability of an expert, a reasonable person, the particular purchaser, or a decided non-expert).

It may be thought that UNCITRAL should not be concerning itself with the fairness of the transaction or of the communications and ability to communicate the messages leading to the contract. On the other hand, it is hard to resist a provision such as the present one on principle.

In these days of increasing sensitivity to IP issues, one might have to ask if the law of copyright would inhibit the purchaser from storing or reproducing the content that constitutes the contract terms. It is, however, arguable that the vendor must give an implied license for this; though if doubt persists, the Convention could require or constitute an express license. The customer has to be able to reproduce the content to the extent necessary to carry out the contract and to prove it if there is a dispute. It is hard to imagine a reasonable argument against such a limited license. No copyright argument seems to have been made against the similar provisions in UETA.[page 340]

Again, the draft Convention is silent on the legal effect on a contract if a merchant fails to comply, or poorly complies, with the requirements. It may be easier to argue that the contract is invalidated or made unenforceable on the part of the merchant, than it would be to argue for a failure under Article 15 on disclosing the merchant's name and location.

In short, the provisions of the draft Convention on required information seem basically acceptable. The rules aim to ensure that the terms are available to the buyer after the contract is made. The draft does not address whether a contract can be made on terms not disclosed until the offer has been accepted, either by shrinkwrap or by click-through process. Failure to comply with Article 16 may, at the option of the party not obliged to provide the information, invalidate the contract or make it unenforceable by the merchant, but if the purchaser accepts the goods or services, they must be paid for according to the contract.

IMPACT ON OTHER INTERNATIONAL CONVENTIONS

The introduction to this Article noted that one future task of the Working Group was to seek ways of having existing international conventions operate with electronic communications. The U.N. Secretariat devoted a couple of working papers to the subject,[183] and the Working Group has discussed the issue.[184] A significant number of the issues presented by many conventions involve the acceptability of electronic contracting.[185] A new article in the draft Convention, Article Y, deals with the impact of this Convention on other conventions to which the contracting state is a party.[186]

Article Y provides that the terms of this Convention will apply to communications under other conventions.[187] Variant A lists five conventions: CISG, Limitations in Sales, Liability of Operators of Transport Terminals, Independent Guarantees and Stand-by Letters of Credit, and Assignment of Receivables.[188] Variant B covers "any international agreements or conventions on private commercial law" to which the contracting state is a party.[189] Paragraph (2) allows a contracting state to exclude transactions that would fall within some of those conventions.[190]

UNCITRAL has heard from The Hague Conference on Private International Law, pointing out that it is working on the impact of electronic communications on five of its civil procedure conventions.[191] If Variant B of Article Y were to apply [page 341] the e-contracting Convention to those conventions, it may be undesirably broad. Likewise, the International Road Transport Union (IRTU) [192] has pointed out problems in applying the e-contracting Convention [193] to its convention on the contract for the international carriage of goods by road (the "CMR Convention").[194] It may be inappropriate to have that Convention covered by the e-contracting Convention, as Variant B would do.[195]

It seems risky for UNCITRAL to suggest that its e-contracts Convention should apply to conventions sponsored by anyone else, without the consent of the sponsoring body. Consent may be available, however. As noted earlier, the International Civil Aviation Organization (ICAO) has expressed an interest in having UNCITRAL look at its conventions,[196] as did the World Customs Organization. [197] They may be candidates for treatment under Article Y.

ADDITIONAL PROVISION: INCORPORATION BY REFERENCE

The draft Convention intends to elevate the MLEC and parts of the MLES to status of a convention. It has been suggested that [198] the Working Group should go one small step further in this direction by developing MLEC Article 5bis, which deals with the effect of incorporation by reference.[199] It would be worth spelling out the status of hyperlinks as part of electronic contracts. The following draft captures the idea:

(i) Hyperlinked records shall not be considered a part of an electronic contract unless they have been incorporated expressly into the contract, or the context clearly indicates an intent to incorporate.

(ii) Citations to a hyperlinked record appearing within a contract shall be considered a part of the contract, unless expressly excluded or the context clearly indicates an intent to exclude.

(iii) Records appearing on an online screen which are not clearly part of a contract are presumed not to be part of the contract, unless expressly included in a clear and conspicuous manner.

CONCLUSION

UNCITRAL is well-embarked on preparing a convention on electronic contracts or transactions. The draft includes much of the MLEC and additional provisions [page 342] often found in or inspired by American uniform law.[200] Some improvements could be made in the text,[201] but much of it will be acceptable. A serious question for legislators in North America or the European Union, and several other places around the world, is whether it will be helpful to ratify the Convention. The new text will add little to their existing laws.[202]

Two arguments can be suggested in favor of adoption by countries who have already removed barriers to e-commerce. First, participating in a convention may help adapt to e-contracts some of the other conventions to which the state may be a member, under Article Y in some form. Second, ratification will promote general adoption by countries who need it more, and may even smooth legal relations between parties in adopting states, though the Convention does not require reciprocity.

Further, the discussions in the Working Group refine our understanding of the MLEC, which underlies our law. The Convention will reflect that deeper understanding and, thus, add something of value to our law, while encouraging our use of electronic contracts in international trade.[page 343]


FOOTNOTES

* General Counsel, Policy Branch, Ministry of the Attorney General (Ontario, Canada), and co-chair, Global E-commerce Policy Subcommittee, Cyberspace Committee, ABA section of Business Law. The views expressed here are not necessarily those of the Ministry or of any part of the ABA. Many of the ideas were generated in international conference calls and ABA meetings; the author thanks the participants for his education but does not hold them responsible for what he has made of it.

1. Although businesspeople have been using technology for their communications forever, and the telegram, telephone, telex and fax systems have raised questions of authentication and security, it is arguable that EDI is different in kind because of the coding, speed and extent of the messages, and the interactive capacities of the Internet is a further change in kind from previous technology. Nothing in this Article turns on the degree of difference from one technology to the next.

2. For information about UNCITRAL, see <http://www.uncitral.org> (last visited Oct. 11, 2003).

3. See Legal Aspects of Automatic Data Processing: Report of the Secretary-General, UNCITRAL, 17th Sess., U.N. Doc. A/CN.9/254 (1984), reprinted in [1984] 15 Y.B. UNCITRAL 328, U.N. Doc. A/CN.9/SER.A/1984, available at <http://www.uncitral.org/english/yearbooks/yb-1984-e/vol15-p328-331-e.pdf>; Legal Value of Computer Records, UNCITRAL, 18th Sess., U.N. Doc. A/CN.9/265 (1985), available at <http://www.uncitral.org/english/workinggroups/wg_ec/ml-ec-bckdocs/acn9-265.pdf>. For a history of UNCITRAL's involvement in e-commerce in the context of parallel development in the United States, see Amelia H. Boss, Electronic Commerce and the Symbiotic Relationship Between International and Domestic Law Reform, 72 TUL. L. REV. 1931, 1947-52 (1998).

4. U.N GAOR UNCITRAL, 51st Sess., Supp. No. 17, Annex 1, U.N. Doc. A/51/17 (1996), available at <http://www.uncitral.org/english/sessions/unc/unc-29/a51-17.htm>. The text of the MLEC and the very useful Guide to Enactment are online at: <http://www.uncitral.org/english/texts/electcom/mlecomm.htm> (last visited Oct. 11, 2003).

5. In the United States, the Uniform Electronic Transactions Act (UETA) was adopted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in 1999 and is in force in most states. 7A pt. 1 U.L.A 211 (2002), available at <http://www.law.upenn.edu/bll/ulc/fnact99/1990s/ueta99.htm>. For a record of the discussions leading up to its adoption and a list of states that have adopted it, with links to electronic versions of their legislation, see <http://www.uetaonline.com> (last revised Apr. 2, 2001). The Electronic Signatures in Global and National Commerce Act (E-SIGN), 15 U.S.C. 7100-7131 (2000), available at <http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=106_cong_public_law&docid=f:pub1229.106.pdf>. E-SIGN was inspired by UETA rather than by the MLEC directly.

6. UNCITRAL Model Law on Electronic Commerce, G.A. Res. 51/162, U.N. GAOR, Art. 5 (1996), available at <http://www.uncitral.org/english/texts/electcom/ml-ecomm.htm> [hereinafter MLEC].

7. Id. at Art. 6.

8. G.A. Res. 56/80, U.N. GAOR, 56th Sess., Agenda Item 161, U N. Doc. A/RES/56/80 (2002), available at <http://www.uncitral.org/stable/res5680-e.pdf>. The text of the MLES and its Guide to Enactment may be found on the UNCITRAL website: <http://www.uncitral.org/english/texts/electcom/mlelecsig-e.pdf>.

9. See MLEC, supra note 6, at Art. 7.

10. There was also an interest in working on online dispute resolution, but the idea has not been pursued in the last couple of years. A history of UNCITRAL's recent deliberations appears at the outset of the report of each meeting of the Working Group on Electronic Commerce. The most recent is in the report of the May 2003 meeting, Report of the Working Group IV (Electronic Commerce) on the Work of its Forty-First Session, UNCITRAL, 36th Sess., PP1-15, U.N. Doc. A/CN.9/528 (2003), available at <http://www.uncitral.org/er.glish/sessions/unc/unc-36/acn9-528-e.pdf> [hereinafter May 2003 Meeting]. See infra note 24 for a list of the relevant reports. In general the relevant UNCITRAL documents referred to in this Article are accessible online: <http://www.uncitral.org/english/workinggroups/wg_ec/index.htm> (last visited Oct. 11, 2003).

11. Canada is about the only country to enact Articles 16 and 17 of the MLEC, and even there several provinces did not follow the Uniform Electronic Commerce Act, see infra note 23 on that point.

12. See Provisional Agenda, UNCITRAL, Working Group III (Transport Law), 11th Sess., PP2, 10, U.N. Doc. A/CN.9/WG.III/WP.24 (2003), available at <http://www.uncitral.org/english/workinggroups/wg_3/wp24.pdf>.

13. Report of the Working Group on Electronic Commerce on its Thirty-Eighth Session, 34th Sess., P92, U.N. Doc. A/CN.9/484 (2001), available at <http://www.uncitral.org/english/sessions/unc/unc-34/acn-484e.pdf>.

14. The idea was proposed to UNCITRAL by The Centre for the Facilitation of Procedures and Practices for Administration, Commerce, and Transport (CEFACT), a branch of the U.N.'s Economic Commission for Europe. Recommendation to UNCITRAL Regarding Implementing Electronic Equivalents to "Writing", "Signature" and "Document" in Conventions and Agreements Relating to International Trade, U.N. Doc. TRADE/CEFACT/1999/CRP.7 at 2 (1999), available at <http://www.unece.org/cefact/wg/lwg/download/99cp7.pdf>. It was considered by UNCITRAL at its 1999 meeting. U.N. GAOR UNCITRAL, 54th Sess., Supp. No. 17, P316, U.N. Doc. A/54/17 (1999), available at <http://www.uncitral.org/english/1pg-54-17.pdf>.

15. See Legal Aspects of Electronic Commerce, UNCITRAL, Working Group IV (Electronic Commerce), 38th Sess., P10, Annex PP1-3, U.N. Doc. A/CN.9/WG.IV.WP.89 (2001), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wp-89e.pdf> [hereinafter WP.89]. The principal researcher was Professor Genevieve Burdeau.

16. See Legal Aspects of Electronic Commerce, Legal Barriers to the Development of Electronic Commerce in International Instruments Relating to International Trade, Working Group IV (Electronic Commerce), 39th Sess., P4, U.N. Doc. A/CN.9/WG.IV/WP.94 (2002), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wp-94e.pdf> [hereinafter WP.94].

17. See Report of the Working Group IV (Electronic Commerce) on the Work of its Fortieth Session, UNCITRAL, Working Group IV (Electronic Commerce), 36th Sess., PP28-30, U.N. Doc. A/CN.9/527 (2002), available at <http://www.uncitral.org/english/sessions/unc/unc-36/acn9-527-e.pdf>. Note, however, that a number of governments and non-governmental organizations (NGOs) have expressed interest in the updating of instruments project and have even asked UNCITRAL to review their instruments for updating. For example, see the comments of the International Civil Aviation Organization. Legal Barriers to the Development of Electronic Commerce in International Instruments Relating to International Trade, UNCITRAL, Working Group IV (Electronic Commerce), 40th Sess. at 6, U.N. Doc. A/CN.9/WG.IV/WP.98 (2002), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wp98-e.pdf> [hereinafter WP.98]. Others, however, have preferred to do their own work, although attempting for consistency with UNCITRAL approaches if possible. See, for example, the comments of the World Intellectual Property Organization. Id. at 8. See also those of The Hague Conference on Private International Law Id. at Add. 5, P2.

18. See infra note 186 and accompanying text.

19. The United States proposed a convention on electronic transactions as far back as 1998. Proposal by the United States of America, UNCITRAL, Working Group IV (Electronic Commerce), 33rd Sess., U.N. Doc. A/CN.9/WG.IV/WP.77 (1998), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wp-77.htm>; see also Legal Aspects of Electronic Commerce, Possible Future Work in the Field of Electronic Contracting: An Analysis of the United Nations Convention on Contracts for the International Sale of Goods, UNCITRAL, Working Group IV (Electronic Commerce), 38th Sess., U.N. Doc. A/CN.9/WG.IV/WP.91 (2001), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wp-91e.pdf>; Report of the Working Group on Electronic Commerce on its Thirty-Eighth Session, 34th Sess., U.N. Doc. A/CN.9/484 (2001), available at <http://www.uncitral.org/english/sessions/unc/unc-34/acn-484e.pdf>.

20. UNCITRAL Model Law on Electronic Commerce, G.A. Res. 51/162, U.N. GAOR, Art. 11 (1996), available at <http://www.uncitral.org/english/texts/electcom/ml-ecomm.htm>; see also Guide to Enactment of the UNCITRAL Model Law on Electronic Commerce, PP76-82 (1996) at <http://www.uncitral.org/english/texts.electcom/ml-ecomm.htm>.

21. Inter-American Rules for Electronic Documents and Signatures, Sixth Inter-American Specialized Conference on Private International Law (CIDIP-VI), 3d Sess., at 43, CIDIP-VI/Res.6/02, OEA/Ser.K/XXI.6 (Feb. 27, 2002), available at <http://www.oas.org/dil/CIDIP-VI-Res6-02.htm>.

22. Commonwealth Secretariat, LAW AND CYBERSPACE (2001), available at <http://www.thecommonwealth.org/dynamic/documents_asp/ViewADocument.asp?ID=291&CatID=87&PCID=87>.

23. See, e.g., UETA 7(b), 7A pt. 1 U.L.A. 252 (2002); Electronic Transactions Act (ETA) -- Australia, No. 162 8 (1999), available at <http://scaleplus.law.gov.au/html/comact/10/6074/pdf/162of99.pdf>; Uniform Electronic Commerce Act (UECA) 5, Proceedings of the Uniform Law Conference of Canada, at <http://www.ulcc.ca/en/poam2/index.cfm?sec=1999&sub=1999ia>; Electronic Transactions Act (ETA) -- Singapore, Ch. 88 11 (1998), <http://ascvldb4.asc.gov.sg/>. Useful sources of information on international developments in this field are the Internet Law and Policy Forum, at <http://www.ilpf.org/>; the McBride Baker Coles firm website, at <http://www.mbc.com/ecommerce/international.asp>; and the Baker & McKenzie firm website, at <http://www.bmck.com/ecommerce>.

24. The arguments on various aspects of the proposed convention are set out in part in the documents of the UNCITRAL Secretariat and in reports of the Working Group. See May 2003 meeting, supra note 10, PP72-126; Legal Aspects of Electronic Commerce, Electronic Contracting: Provisions for a Draft Convention, UNCITRAL, Working Group IV (Electronic Commerce), 41st Sess., U.N. Doc. A/CN.9/WG.IV/WP.100 (2003), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wg4-wp100-e.pdf> [hereinafter WP.100] (the footnotes to the draft are quite helpful in exploring conceptual sources, alternative wording, and policy considerations); Report of the Working Group IV (Electronic Commerce) on the Work of its Forty-First Session, UNCITRAL, 36th Sess., PP26-151, U.N. Doc. A/CN.9/528 (2003), available at <http://www.uncitral.org/english/sessions/unc/unc-36/acn9-528-e.pdf>; Legal Aspects of Electronic Commerce, Electronic Contracting: Provisions for a Draft Convention, UNCITRAL, Working Group IV (Electronic Commerce), 39th Sess., PP10-12, U.N. Doc. A/CN.9/WG.IV.WP.95 (2002), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wp-95e.pdf> [hereinafter WP.95]; Report of the Working Group on Electronic Commerce on its Thirty-Ninth Session, UNCITRAL, 35th Sess., PP18-125, U.N. Doc. A/CN.9/509 (2002), available at <http://www.uncitral.org/english/sessions/unc/unc-35/509e.pdf>; Report of the Working Group on Electronic Commerce on its Thirty-Eighth Session, UNCITRAL, 34th Sess., PP94-127, U.N. Doc. A/CN.9/484 (2001), available at <http://www.uncitral.org/english/sessions/unc/unc-34/acn-484e.pdf>; Legal Aspects of Electronic Commerce, Possible Future Work in the Field of Electronic Contracting: an Analysis of the United Nations Convention on Contracts for the International Sale of Goods, UNCITRAL, Working Group on Electronic Commerce, 38th Sess., P1, U.N. Doc. A/CN.9/WG.IV/WP.91 (2001), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wp-91e.pdf> [hereinafter WP.91]. In the text reports of the meetings are referenced by the date of the meeting rather than by their numbers. Other arguments have been derived from the sources mentioned in the opening footnote, which are not available for specific citations. In the text working Papers will be referred to, for brevity, as WP.XX rather than as A/CN.9/WG.IV/WP.XX.

25. After this Article was submitted for publication, UNCITRAL published WP.103 with a new text of the convention. See infra note 34. Several provisions have been renumbered from WP.100, on which this Article is based. Footnotes indicate the new numbers but the discussion does not reflect the revised text.

26. The CISG was adopted in 1980 in Vienna. Convention on Contracts for the International Sale of Goods, Final Act, U.N. Doc. A/CONF. 97/18 (1980), reprinted in S. TREATY DOC. NO. 9, 98th Cong., 1st Sess., app. B (1980), available at <http://www.uncitral.org/english/texts/sales/CISG.htm>.

27. Id. at Art. 11

28. Id. at Art. 12

29. See WP.94, supra note 16.

30. Legal Aspects of Electronic Commerce, Electronic Contracting: Provisions for a Draft Convention, Comments by the International Chamber of Commerce, UNCITRAL. Working Group IV (Electronic Commerce), 41st Sess., Annex 1, at 5, U N. Doc. A/CN.9/WG.IV/WP.101 (2003), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wp-101-e.pdf> [hereinafter WP.101]; see also Legal Aspects of Electronic Commerce, Electronic Contracting: Provisions for a Draft Convention, UNCITRAL, Working Group IV (Electronic Commerce), 42nd Sess., U.N. Doc. A/CN 9/WG.IV/WP.105 (2003), available at <http://www.uncitra.org/english/workinggroups/wg_ec/wg4-wp105-e.pdf> [hereinafter WP.105].

31. CISG, supra note 26, at Art. 1(1).

32. May 2003 Meeting, supra note 10 PP29-31.

33. Variant A of paragraph, Paragraph 3, Article 1 of the draft convention in WP.95 had that effect. See WP.95, supra note 24, at Art. 1, P3. Variant A was written to apply the convention to all contracts, but Paragraph 3 allowed a declaration restricting application to international transactions. Id.

34. See WP.100, supra note 24, at Art. 1(1); Legal Aspects of Electronic Commerce Electronic Contracting: Provisions for a Draft Convention, UNCITRAL, 42d Sess., Annex, Art. 1(1), U.N. Doc. A/CN.9/WG.IV/WP.103 (2003), available at <http://www.uncitral.org/english/workinggroups/wg_ec/wp103-e.pdf> [hereinafter WP.103]. The desire for parallelism is noted in the Report of the March 2001 meeting. See Report of the Working Group on Electronic Commerce on its Thirty-Eighth Session, UNCITRAL, 34th Sess., P31, U.N. Doc. A/CN.9/484 (2001), available at <http://www.uncitral.org/english/sessions/unc/unc-34/acn-484e.pdf>.

35. WP.100, supra note 24, at Art. 4; WP.103, supra note 34, at Art. 4.

36. WP.100, supra note 24, at Art. 4 n.4. The May 2003 Working Group meeting deferred discussion of this point until after considering the operative parts of the convention. See May 2003 Meeting, supra note 10, P44.

37. See WP.100, supra note 24, at Art. 7; WP.103, supra note 34, at Annex, Art. 7.

38. See WP.100, supra note 24, at Art. 15; WP.103, supra note 34, at Annex, Art. 11.

39. CISG, supra note 26, at Art. 2(a).

40. WP.100, supra note 24, at Annex 1, Art. 2; WP.103, supra note 34, at Annex, Art. 2(a).

41. WP.100, supra note 24, at Annex 1, Art. 2, Variant B(2); WP.103, supra note 34, at Annex, Art. 3(a).

42. These themes are all at work in the submissions of the International Chamber of Commerce (ICC) in WP.96. Legal Aspects of Electronic Commerce, Electronic Contracting: Provisions for a Draft Convention, Comments by the International Chamber of Commerce, UNCITRAL, Working Group on Electronic Commerce, 39th Sess. at 5, U.N. Doc. A/CN.9/WG.IV/WP.96 (2002), available at <http://www.uncitralorg/english/workinggroups/wg_ec/wp-96e.pdf> [hereinafter WP.96]. The submissions of the ICC in 2003 (WP.101) do not address this issue. See WP.101, supra note 30.

43. See May 2003 Meeting, supra note 10, P53.

44. Id.

45. The "mass market" concept was raised in the United States in the context of the UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT (UCITA), adopted by NCCUSL in 1999 and amended in 2002. UCITA 102(45) (2002), available at <http://www.law.upenn.edu/bll/ulc/ucita/2002final.pdf>.

46. WP.100, supra note 24, at Annex 1, Art. 2; WP.103, supra note 34, at Annex, Art. 2(b).

47. The initial impetus for developing UCITA, supra note 45, was to accommodate this difference, although that statute is not yet widely adopted, and U.S. courts still sometimes treat transfers of software or music as subject to Article 2 of the Uniform Commercial Code on Sales. See, e.g., I.Lan Sys., Inc. v. Netscout Serv. Level Corp., 183 F. Supp. 2d 328, 331-32 (D. Mass. 2002).

48. For a selection of articles from the development period of UCITA, see online: <http://www.ucitaonline.com>. For a skeptical view of severing embedded software from the goods themselves, see Phillip Koopman & Cem Kaner, The Problem of Embedded Software in UCITA and Drafts of Revised Article 2, UCC BULL. (Feb, Mar, Apr. 2001), available at <http://www.badsoftware.com/embedd1.htm> and <http://www.badsoftware.com/embedd2.pdf>.

49. A recent example is the use of computer chips in ink cartridges for printers. Lexmark successfully sued under the Digital Millennium Copyright Act in the United States to block a competitor from selling cartridges that work in Lexmark printers, based on the need of the competitor to make a compatible chip, which is alleged to infringe Lexmark's intellectual property. Lexmark Int'l v. Static Control Components, 253 F. Supp. 2d 943, 974 (E.D. Ky. 2003).

50. The Working Group at its May 2003 meeting had intensive education and discussion on the nature of this type of product and the advantages and disadvantages of their inclusion. See May 2003 Meeting, supra note 10, PP55-60; see also WP.91, supra note 24, PP20-29. It may be noted that this discussion does not touch on rights in "data" as such; whether a contract purporting to sell data, without reservation of any IP, is a sale of goods depends on other law. WP.100, and now WP.103, are drafted to apply to contracts without limiting their subject to goods or services, so data transfer contracts would be covered. WP.100, supra note 24, at Art. 1; WP.103, supra note 34, at Annex, Art. 1.

51. WP.100, supra note 24, at Art. 8; WP.103, supra note 34, at Annex, Art. 13.

52. WP.100, supra note 24, at Art. 3(a); WP.103, supra note 34, at Annex, Art. 3(b). The same rule is found in CISG, supra note 26, at Art. 4(a).

53. WP.100, supra note 24, at Annex 1, Art. 4; WP.103, supra note 34, at Annex, Art. 4. The ability to vary, rather than to opt out, may be debated. See discussion infra note 73 and accompanying text.

54. See May 2003 Meeting, supra note 10, P58.

55. MLEC, supra note 6, at Arts. 6(3), 7(3), and 8(4) 1996, available at <http://www.uncitral.org/english/texts/electcom/ml-ecomm.htm>; MLES, Art. 6(5) (2002), available at <http://www.uncitral.org/english/texts/electcom/ml-elecsig-e.pdf>.

56. WP.100, supra note 24, at Annex 1, Art. 2, Variant A (c), Variant B (1)(b); WP.103, supra note 34, at Annex, Art. 2(c).

57. CISG, supra note 26, at Arts. 2-3.

58. See May 2003 Meeting, supra note 10, P62.

59. Convention on International Bills of Exchange and International Promissory Notes, Dec. 9, 1988, 28 I.L.M. 170 at Ch. 1, Art. 1, available at <http://www.uncitral.org/english/texts/payments/bills¬es.htm> (last visited Oct. 11, 2003).

60. They are the only transactions mentioned expressly in WP.100 except for consumer transactions and limited grants of IP rights. WP.100, supra note 24, at Annex 1, Art. 2, Variant B (1)(b); WP.103, supra note 34, at Annex, Art. 2(c).

61. See, e.g., UECA 2(3)(d) (1999), <http://www.ulcc.ca/en/poam2/index.cfm?sec=1999&sub=1999ia> (last visited Oct. 11, 2003); Singapore's ETA 4(1)(e) (1998), <http://ascvldb4.asc.gov.sg/> (last visited Oct. 11, 2003); see also New South Wales Electronic Transactions Regulation, 2001 4, at <http://www.austlii.edu.au/au/legis/nsw/consol_reg/etr2001347/s7.html> (excluding 23C of the Conveyancing Act 1919). Section 23C of the Conveyancing Act 1919 can be found online at <http://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/s23c.html>.

62. E.U. Directive 1999/93/EC, 1999, O.J. (L13/12) 19.01.2000, at 0012-0020, available at <http://europa.eu.int/information_society/topics/ebusiness/ecommerce/8epolicy_elaw/law_ecommerce/legal/documents/1999_93/1999_93_en.pdf> (last visited Oct. 11, 2003).

63. See supra note 5 and accompanying text.

64. See supra note 5 and accompanying text.

65. See Annex II to WP.95 for a review of several countries' legislation on exclusions. WP.95, supra note 24, at Annex 2.

66. See May 2003 Meeting, supra note 10, P64.

67. WP.100, supra note 24, at Art. 1. For most of this discussion we will speak interchangeably of contracts or transactions, though the latter term has now been dropped from the convention. See infra note 71.

68. WP.100, supra note 24, at Art. 3.

69. See supra note 52 and accompanying text.

70. WP.100, supra note 24, at Annex 1, Art. 1(3).

71. See, however, the proposed definition of "transaction" in Article 5(1), taken from the UETA and mentioning governmental affairs. Id. at Art. 5(1). For a discussion of the law of electronic commerce as it affects administrative law in several countries, see E-GOVERNMENT AND ITS IMPLICATIONS FOR ADMINISTRATIVE LAW (J.E.J. Prins ed., The Hague 2002). It is clear from this text that making room for data messages in e-commerce does not necessarily empower governments to use them.

72. May 2003 Meeting, supra note 10, P38.

73. WP.100, supra note 24, at Annex 1, Art. 4(1); WP.103, supra note 34, at Annex, Art. 4.

74. WP.100, supra note 24, at Annex 1, Art. 4, n.12. These provisions were debated but not determined in May 2003, in part because the substantive rules were not reached. See May 2003 Meeting, supra note 10, P75.

75. Adapted from the UECA 6(1), Proceedings of the Uniform Law Conference of Canada, at <http://www.ulcc.ca/en/poam2/index.cfm?sec=1999&sub=1999ia>. Similar principles are found in the UETA and the Australian ETA, for example, among other statutes. See UETA 5(b), 7A pt. 1 U.L.A. 247; Electronic Transactions Act, No. 162, 9(1)(d) (Austl.), available at <http://scaleplus.law.gov.au/html/comact/10/6074/pdf/162of99.pdf>. The MLEC Guide to Enactment, supra note 4, says this principle applies in the MLEC as well, but it is implied rather than express in that text. MLEC, supra note 4, P43.

76. WP.100, supra note 24, at Annex 1, Art. 1(c); WP.103, supra note 34, at Annex, Art. 1(c).

77. WP.100, supra note 24, at Annex 1, arts 10-12, 14; WP103, supra note 34, at Annex, Arts. 8, 9, 10, 13.

78. MLEC, supra note 6, at Art. 4 (recognizing party autonomy only for provisions of Chapter III of Part One of the Model Law).

79. This point is made in the Report of the May 2003 meeting. May 2003 Meeting, supra note 10, P138.

80. One would expect a provision like that of Article 1 footnote * * of the MLEC stating that nothing in the convention overrides any rule of law intended to protect consumers. MLEC, supra note 6, at Art. 1, n. * *.

81. See WP.100, supra note 24, at Annex 1, Art. 5(f), (g), (h), (l).

82. See id. at Art. 5, n.23 (considering providing additional definitions for signatory, Internet, website and domain name).

83. Id. at Art. 5(i). The Secretariat says in WP.100 footnote 17 that the concept of signature may be left to the general law. Id. at Art. 5, n.17.

84. UETA 2(8), 7A pt. 1 U.L.A. 226.

85. See WP.100, supra note 24, at Annex 1, Art. 5 (i).

86. UETA 2(8) 7A pt 1 U.L.A. 226.

87. WP.100, supra note 24, at Annex 1, Art. 7; WP.103, supra note 34, at Annex, Art. 7.

88. WP.100, supra note 24, at Annex 1, Art. 11(5); WP.103, supra note 34, at Annex, Art. 10.

89. WP.100, supra note 24, at Annex 1, Art. 5(j).

90. Id. at Art. 5(j), Variant B.

91. Id.

92. Id. at Art. 5, n.18 (listing some other complicating factors).

93. Id. at Art. 6(1).

94. MLEC, supra note 6, at Art. 3 (1996); UNICITRAL Model Law on Electronic Signatures, G.A. Res. 56/80, U.N. GAOR, Art. 4, available at <http://www.uncitral.org/stable/res5680-e.pdf>. See also CISG, supra note 26, at Art. 7. It also appears in conventions prepared by The Hague Conference on Private International Law. See, for example, The Hague Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary (2002), Art. 13, available at <http://www.hcch.net/e/conventions/text36e.html> (last visited Oct. 11, 2003).

95. The last two Working Group meetings have discussed the final reference to the "rules of private international law" on technical grounds. See Report of the Working Group IV (Electronic Commerce) on the Work of its Fortieth Session, UNCITRAL, Working Group IV (Electronic Commerce), 36th Sess., PP125-26, U.N. Doc. A/CN.9/527 (2002), available at <http://www.uncitral.org/english/sessions/unc/unc-36/acn9-527-e.pdf>; May 2003 Meeting, supra note 10, P89.

96. WP.100 Article 15 requires the parties to state their location. WP.100, supra note 24, at Annex 1, Art. 15(1)(b); WP.103, supra note 34, at Annex, Art. 11(b); see also infra notes 160-61 and accompanying text. The cross-reference here to Article 15 has been dropped by the Working Group. See May 2003 Meeting, supra note 10, P85. The nationality of the parties has no bearing on the decision. WP.100, supra note 24, at Annex 1, Art. 1(3); WP.103, supra note 34, at Annex, Art. 1(3).

97. WP.100, supra note 24, at Annex 1, Art. 7(1).

98. WP.100 says that this must be "manifest and clear," but the Working Group was inclined to delete that phrase. See WP.100, supra note 24, P86; WP.103, supra note 34, at Annex, Art. 7(1).

99. WP.100, supra note 24, at Annex 1, Art. 7(1). Variant B of Article 7(1) will displace a false declaration of location only if the declaring party has an improper motive for the falsehood. Id. at Art.(7), Variant B.

100. Id. at Art. 1(2); WP.103, supra note 34, at Annex, Art. 1(2).

101. WP.100, supra note 24, at Annex 1, Art. 1(1)(c); WP.103, supra note 34, at Annex, Art. 1(1)(c).

102. A party could also affect the apparent application of the convention by declaring or denying its consumer status -- if consumer transactions are excluded.

103. WP.100, supra note 24, at Annex, Art. 7, Variant B, n.28.

104. Id.

105. WP.100 Article 7 paragraph 5 now says the domain name is irrelevant, but footnote 29 offers the prospect of a change, at least for some countries. Id. at Art. 7, Variant B, n.29. No decision was made on this point at the May 2003 meeting.

106. Id. at Art. 8(3); WP.103, supra note 34, at Annex, Art. 13(1).

107. MLEC, supra note 6, at Art. 11(1).

108. CISG, supra note 26, at Arts 15(1), 18(2).

109. Report of the Working Group on Electronic Commerce on its Thirty-Ninth Session, UNCITRAL, 35th Sess., PP67-73, U.N. Doc. A/CN.9/509 (2002), available at <http://www.uncitral.org/english/sessions/unc/unc-35/509e.pdf>; May 2003 Meeting, supra note 10, PP101-06.

110. Compare CISG, supra note 26, at Art. 14.

111. WP.100, supra note 24, at Annex 1, Art. 9(1).

112. Id. at Art. 9(2).

113. Id. at Art. 9, Variant A.

114. Id. at Art. 9, Variant B.

115. May 2003 Meeting, supra note 10, PP116-18.

116. WP.100, supra note 24, at Annex 1, Art. 9(2).

117. Id. at Art. 10. Article 8 deals solely with offer and acceptance. Article 10 deals with other contractual communications. Its wording is to be revisited to extend clearly to pre-contractual communications or communications in view of a contract where none is finally formed. Id.; see also WP.103, supra note 34, at Annex, Art. 8; May 2003 Meeting, supra note 10, P125.

118. Id. at P61.

119. This has been defended in the Working Group by noting specific types of potential exclusions, such as special form requirements for default notices that might be properly covered under the convention but not under this Article. Id. at P130.

120. WP.100, supra note 24, at Annex 1, Art. 11.

121. MLEC, supra note 6, at Art. 15.

122. WP.100, supra note 24, at Annex 1, Art. 11.

123. UETA 15(a)(3) cmt. 2, 7A pt. 1 U.L.A. 274, 276 (2002).

124. UECA 23(1), Proceedings of the Uniform Law Conference of Canada, at <http://www.ulcc.ca/en/poam2/index.cfm?sec=1999&sub=1999ia.>

125. WP.100, supra note 24, at Annex 1, Art. 11.

126. Id. The language in WP.100 allowing the parties to choose a different rule has been dropped as redundant, given the breadth of article 4. May 2003 Meeting, supra note 10, P138.

127. WP.100, supra note 24, at Annex 1, Art. 11.

128. UETA 15(b) cmt. 3, 7A pt. 1 U L.A. 274, 276.

129. An Act to Establish a Legal Framework for Information Technology, 32 R.S.Q. 31 (2001) (Can.).

130. WP.100, supra note 24, at Annex 1, Art. 11(2); WP.103, supra note 34, at Annex, Art. 10(22)(c).

131. WP.100, supra note 24, at Annex 1, Art. 11(2); WP.103, supra note 34, at Annex, Art. 10(22)(c).

132. Compare UECA 23(2)(b), Proceedings of the Uniform Law Conference of Canada, at <http://www.ulcc.ca/en/poam2/index.cfm?sec=1999&sub=1999ia>, with Electronic Transactions Act, No. 162, 14(4) (Austl.), available at <http://scaleplus.law.gov.au/html/comact/10/6074/pdf/162of99.pdf>.

133. See May 2003 Meeting, supra note 10, P144.

134. Id. at P146.

135. WP.100, supra note 24, at Annex 1, Art. 11; MLEC, supra note 6, at Art. 15(2)(1)(ii).

136. UETA 15, cmt. 3, 7A pt. 1 U.L.A. 275-76.

137. WP.100, supra note 24, at Annex 1, Art. 11, Variant A, n.40 (quoting the UETA and UECA, on this point among others). Variant B of Article 11 uses language detailing receipt, but omits the designation concept entirely. See id. at Art. 11, Variant B.

138. Article 11 does not deal with the legal effect of receipt. That is the subject of Article 9. See supra note 110.

139. WP.100, supra note 24, at Annex 1, Art. 12, Variant B (stating that the message is considered received when it is capable of being retrieved rather than when it is actually retrieved).

140. UETA 14(1) cmt. 3, 7A pt. 1 U.L.A. 272, 273.

141. WP.100, supra note 24, at Annex 1, Art. 12, n.43.

142. For a fuller discussion of the automated artificially intelligent machine, see Ian Kerr, Spirits in the Material World: Intelligent Agents as Intermediaries in Electronic Commerce, 22 DALHOUSIE L.J. 190 (1999).

143. WP.100, supra note 24, at Art. 12; WP.103, supra note 34, at Art. 14.

144. WP.100, supra note 24, at Annex 1, Art. 13.

145.. Id. at Art. 13, Variant A(1).

146. Id.

147. Council Directive 2000/31/EC, Art. 11(2), 2000 O.J. (L 178) 1 (Jun. 8, 2000), available at <http://europa.eu.int/ISPO/ecommerce/legal/documents/2000_31ec/2000_31ec_en.pdf> (last visited Oct. 11, 2003).

148. See UETA 10, 7A pt. 1 U.L.A. 263 (2002).

149. See id.

150. Id. at 10(3), 7A pt. 1 U.L.A. 263.

151. WP.100, supra note 24, at Annex 1, Art. 13, Variant A(1).

152. Id. at Art. 13, Variant A(1), n.44.

153. Id. at Art. 13, Variant A(1).

154. Id. at Art. 13, Variant A(2).

155. UETA 10, 7A pt. 1 U.L.A. 263.

156. UECA 22, Proceedings of the Uniform Law Conference of Canada, at <http://www.ulcc.ca/en/poam2/index.cfm?sec=1999&sub=1999ia>.

157. WP.100, supra note 24, at Annex 1, Art. 13, Variant B(1).

158. Id. at Art. 13.

159. Id. at Art. 13 Variant B(2)(a).

160. Id. at Art. 14

161. Id. at Art. 14(1); CISG, supra note 26, at Art. 11.

162. WP.100, supra note 24, at Annex 1, Art. 14(2).

163. MLEC, supra note 6, at Art. 6(1).

164. WP.100, supra note 24, at Annex 1, Art. 14(3).

165. UETA 7, 7A pt. 1 U.L.A. 252 (2002); UECA 10, Proceedings of the Uniform Law Conference of Canada, at <http://www.ulcc.ca/en/poam2/index.cfm?sec=1999&sub=1999ia>.

166. E.U. Directive 1999/93/EC, 1999, O.J. (L13/12) 19.01.2000, at Art. 2(2), at <http://europa.eu.int/information_society/topics/ebusiness/ecommerce/8epolicy_elaw/law_ecommerce/legal/documents/1999_93/1999_93_en.pdf>.

167. 5 ILL. COMP. STAT ANN. 175/10-110 (West Supp. 2003).

168. Personal Information Protection and Electronic Documents Act, ch. 5, 1999-2000 S.C., 31, 48 (2000) (Can.).

169. WP.100, supra note 24, at Annex 1, Art. 14(5).

170. WP.100, supra note 24, at Annex 1, Art. 15(1)(a)-(c); WP.103, supra note 34, at Art. 11.

171. Id. at Art. 15(2).

172. Id. at Art. 15(1).

173. WP.100, supra note 24, at Annex, 1, n.55.

174. Council Directive 2000/31/EC, Art. 5(1), 2000 O.J. (L 178) 1, available at <http://europa.eu.int/ISPO/ecommerce/legal/documents/2000_31ec/2000_31ec_en.pdf> (last visited Oct. 11, 2003).

175. Directive 1997/7/EC, Art. 4(1), 1997 O.J. (L 144), available at <http://www.spamlaws.com/docs/97-7-ec.pdf> (last visited Oct. 11, 2003).

176. WP.100, supra note 24, at Annex 1, Art. 7.

177. Id. at Art. 15(2).

178. Id.

179. Id. at Art. 16; WP.103, supra note 34, at Art. 15.

180. WP.100, supra note 24, at Art. 16.

181. Council Directive 2000/31/EC, Art. 10, 2000 O.J. (L 178) 1, available at <http://europa.eu.int/ISPO/ecommerce/legal/documents/2000_31ec/2000_31ec_en.pdf> (last visited Oct. 11, 2003).

182. UETA 8, 7A pt. 1 U.L.A. 254-55 (2002).

183. See generally WP.98, supra note 15; WP.94, supra note 16; see also WP.98, supra note 17, at 6.

184. Notably in the October 2002 meeting. See Report of the Working Group IV (Electronic Commerce) on the Work of its Fortieth Session, UNCITRAL, Working Group on Electronic Commerce, 36th Sess., PP24-71, U.N. Doc. A/CN.9/527 (2002), available at <http://www.uncitral.org/english/sessions/unc/unc-36/acn9-527-e.pdf>.

185. See e.g., WP.94, supra note 16, PP20, 27, 40, 134.

186. WP.100, supra note 24, at Annex 1, Art. Y.

187. Id. at Art. Y(1).

188. Id. at Art. Y, Variant A. See <http://www.uncitral.org/english/texts/index.htm> for the texts of these conventions (last visited Oct. 11, 2003).

189. WP.100, supra note 24, at Annex 1, Art. Y.

190. Id. at Art. Y, Variant B(2).

191. WP. 98, supra note 17, at Add.5.

192. Id. at Add.6.

193. WP.95, supra note 24, PP1-2.

194. Id. at P2.

195. WP.100, supra note 24, at Annex 1, Art. Y, Variant B.

196. WP.98, supra note 17.

197. Id.

198. By a commentator in private correspondence, not yet by a delegate to a meeting of the Working Group.

199. MLEC, supra note 6, at Art. 5bis. Article 5bis, added in 1998, reads: "information shall not be denied legal effect, validity or enforceability solely on the grounds that it is not contained in the data message purporting to give rise to such legal effect, but is merely referred to in that data message." Id.

200. Some of them have been adopted from the Canadian uniform statute. See supra note 23.

201. A new draft prepared for the Working Group's meeting scheduled for November 2003. See WP.103, supra note 34.

202. For the United States, requiring the statement of location would be a novelty. The requirement is part of consumer law on Internet sales in Canada, though not for business-to-business transactions. See Consumer Connection, Internet Sales Contract Harmonization Template (2001), at <http://strategis.ic.gc.ca/SSG/ca01642e.html> (last visited Oct. 11, 2003).


Pace Law School Institute of International Commercial Law - Last updated February 10, 2004
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