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Reproduced with permission of 33 Rutgers Computer and Technology Law Journal (2007) 251-298

Notes on the United Nations Convention on the Use of Electronic
Communications in International Contracts and Its Effects on the United
Nations Convention on Contracts for the International Sale of Goods

Francesco G. Mazzotta [a1]

  1. Introduction
  2. The Electronic Communications Convention: A Brief History
  3. The Electronic Communications Convention's Main Provisions
      (1)   Relationship with the CISG
      (2)   Relationship between the Electronic Communications Convention
              and Regional Integration Organizations' Rules
      (3)   Scope of application
      (4)   Location of the parties
      (5)   Treatment of contracts, form requirements
      (6)   Time and place of dispatch and receipt of electronic communications
                 -    Effectiveness of electronic communications
                 -    Withdrawal of offer, revocation of offer, and rejection
                 -    Place of dispatch and receipt of an electronic communication
      (7)   Place of conclusion of a contract
      (8)   Contract concluded through an automated message system
      (9)   Errors
                 -    In general
                 -    Errors in electronic communication
      (10)   Reservations and declarations
  4. Conclusion

1. INTRODUCTION

The goal of this article is to introduce the reader to the recently approved United Nations Convention on the Use of Electronic Communications in International Contracts ("Convention"), also referred to as the Electronic Communications Convention ("ECC").[1] This work will describe the main provisions of the Convention and consider to what extent this newly approved Convention interacts with the United Nations Convention on Contracts for the International Sale of Goods ("CISG").[2]

The Convention is intended to complement other international trade law texts, including the CISG. In order to explore the mechanics and the extent of the Convention's complementary [page 251] nature, I will analyze its main provisions. I will match each relevant provision with its closest CISG "counterpart." There will be times when the two sets of provisions are very similar because the CISG and the United Nations Commission on International Trade Law ("UNCITRAL" or "Commission") Model Law on Electronic Commerce [3] were the two main drafting sources. For each match, I will first summarize the content of the CISG provision and then compare it with the Convention provision. Upon comparing the two sets of provisions, I will summarize what are the effects of the Convention on the CISG.

2. THE ELECTRONIC COMMUNICATIONS CONVENTION: A BRIEF HISTORY

The UNCITRAL started working on what became the ECC in 2001 when, at its thirty-fourth session, it entrusted the Working Group on Electronic Commerce ("Working Group") with the preparation of a draft convention aimed at facilitating and removing legal obstacles to electronic commerce.[4] It took "only" six sessions of the Working Group to come up with a text on the use of electronic communications in international contracts.[5] The final draft of the ECC was approved by the United Nations Commission on International Trade at its thirty-eighth session, held in Vienna in July 2005.[6] After the approval, the UNCITRAL requested that the Secretariat of the Commission to prepare [page 252] explanatory notes to the text of the convention, which were presented to the Commission at its thirty-ninth session, held in New York in June and July 2006.[7] The Commission requested that the Secretariat establish a drafting group to edit the text of the draft convention for minor linguistic adjustments. Once the review was completed, the draft convention was submitted to the General Assembly of the United Nations, which considered the adoption of the draft convention at its sixtieth session and adopted the treaty on November 23, 2005.[8]

The Convention is open for signature from January 16, 2006 through January 16, 2008.[9] It is subject to ratification, acceptance or approval by the signatory States, and open for accession by all States that are not signatory States. The Convention "enters into force on the first day of the month following the expiration of six months after the date of deposit of the third instrument of ratification, acceptance, approval or accession."[10] The "signature event" took place at the UNCITRAL's thirty-ninth session held in New York on July 6, 2006.[11] [page 253]

As stated in article 20, the Convention is specifically intended to address those issues posed by electronic means of communication in the context of international contracts governed by the CISG, as well as other specific international instruments.[12] It should be clear, however, that the ECC might be applied well beyond the list of treaties indicated in article 20(1). In fact, unless a contracting state makes a declaration not to be bound by article 20(2), the ECC will also be applied to electronic communications dealt with by any other relevant international conventions to which the ECC signatory state is or may become a contracting state.[13] Under article 20(2), "such an expansion operates automatically, without the need for Contracting States to submit numerous opt-in declarations to achieve the same result."[14]

The purpose of listing some international conventions in article 20(1) was

"to remove doubts as to the relationship between the rules contained in the draft convention and rules contained in other international conventions. It was not the purpose of the draft article to amend any other international convention. Through the draft article, the Contracting States could use the provisions of the draft convention to remove possible legal obstacles to electronic commerce that might arise from the interpretation of those conventions and to facilitate their application in cases where the parties conducted their transactions through electronic means."[15]

The Convention complements the CISG when the CISG contract [page 254] is negotiated or concluded electronically or when performance takes place in connection with electronic communications. However, the Convention is not intended to merely supplement the CISG or the instruments listed in article 20(1).[16]

The Convention introduces two specific ancillary principles intended to enhance the operation of a general principle already stated in article 11 of the CISG, the freedom of form. In the context of the ECC, the freedom of form is a well-stated principle not only in its general terms ("[n]othing in this Convention requires a communication or a contract to be made or evidenced in any particular form"),[17] but also in two other, more specific, terms (the principles of functional equivalence and technological neutrality).[18] Although these principles have already been included in other domestic and international texts,[19] the Convention specifically [page 255] takes them in the context of the CISG. While there has been little doubt among the commentators as to whether electronic communications were "writings" for purposes of the CISG,[20] the real challenge concerns the legal effects of the electronic communications. The difficult tasks the Working Group had to tackle included one main goal: to set forth some basic, internationally uniform rules governing the use of electronic communications in international transactions.[21] Although the goal is easy to state, it proved hard to achieve because of the difficulty of reconciling the desire to enhance and promote the modernization of business methods with the need for legal certainty and uniformity. Different domestic legal treatment of electronic communications is synonymous with legal limitations on international commerce, which is exactly what the Working Group intended to address. In fact, the underlying goals of the draft convention are: (i) removing legal obstacles to electronic commerce, including those that arose under other instruments; (ii) enhancing confidence in the use of electronic communications; (iii) curbing possible abuses and commercial fraud; and (iv) setting up a system of rules aimed at facilitating economic development in all regions and countries at different stages of development.[22]

Once the members of the Working Group found common ground on the goals of the convention, the next step was finding a common approach for achieving these goals. The approach is summarized by the principle of technological neutrality and, more importantly, the principle of functional equivalence. The first aims at setting forth provisions which do not favor or disfavor any particular [page 256] technology or medium.[23] This neutrality involves not only those means of communication currently known, but it also applies to future developments.[24] The second establishes the rule of equivalency among the means of communication: e-mails or paper-based letters used for purposes of negotiations, for example, are equivalent in terms of their legal consequences.[25]

Of course, functional equivalence does not mean that technical and factual differences would disappear merely by stating that the two means are equivalent. An electronic communication, clearly, is not an equivalent of a paper-based document. The goal of the Convention is not to introduce computer-based equivalents to paper-based documents. Instead, "it singles out basic functions of paper-based form requirements, with a view to providing criteria which, once they are met by data messages, enable such data messages to enjoy the same level of legal recognition as corresponding paper documents performing the same function."[26]

The Convention, as with many other instruments that deal with the matter,[27] accomplishes these goals by establishing minimum requirements for electronic communication to achieve the same legal consequences as traditional writings.[28] It should also be noted that the necessity of setting some minimum requirements should not be used in a way that compromises the underlying principle by mandating stricter legal requirements resulting in a "bump" that slows down the flow of international commerce.[29] While it makes [page 257] sense to set strict rules aimed at preventing or reducing abuses, the goal should, nonetheless, be accomplished by means that do not ultimately compromise transactions. On the other hand, setting forth some basic, uniform rules concerning the requirements and the legal value of electronic communications in international transactions will produce more predictability and certainty in the business world, which is one the most important factors in creating a favorable environment for commerce. To that end, the Convention merely establishes that an electronic communication should not be denied legal effectiveness due to the way the information is presented or retained, but it does not "establish[] the legal validity of any given electronic communication or of any information contained therein." [30]

With this background in mind, we can begin to examine the Convention's provisions from a CISG perspective.[31]

3. THE ELECTRONIC COMMUNICATIONS CONVENTION'S MAIN PROVISIONS

(1) Relationship with the CISG

ECC article 20(1):

"The provisions of this Convention apply to the use of electronic communications in connection with the formation or performance of a contract or agreement to which any of the following international conventions, to which a Contracting State to this Convention is or may become a Contracting State, apply: ... United Nations Convention on Contracts for the [page 258] International Sale of Goods (Vienna, 11 April 1980)."[32]

Although a State may exclude the application of the Convention in connection with any of the international conventions specified in that State's declaration, including the CISG and those listed in article 20(1),[33] the exclusion of those conventions listed in article 20(1) and, in particular, of the CISG or of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958),[34] would, in fact, frustrate the whole purpose of becoming a State party to the Electronic Communications Convention.

The Convention is not expressly intended to amend any substantive CISG provisions or to provide an authentic interpretation of it.[35] In fact,

"[t]he intended effect of the Convention in respect of electronic communications relating to contracts covered by other international conventions is not merely to interpret terms used elsewhere, but to offer substantive rules that allow those other conventions to operate effectively in an electronic environment. However, article 20 is not meant to formally amend any international convention, treaty or agreement, whether or not listed in paragraph 1, or to provide an authentic interpretation of [page 259] any other international convention, treaty or agreement."[36]

Therefore, in a dispute arising out of a contract governed by the CISG which has been formed through electronic communications (assuming the state court dealing with the matter is bound by both the CISG and the ECC), the court will look and apply the CISG to the extent that the CISG is applicable (whether it is a matter expressly settled or one that can be decided by reference to CISG general principles). But in resolving those issues that specifically concern the use of electronic communications, such as when the communication has been dispatched or when the communication has been received, the court will look and apply the ECC.[37]

The issue of the interaction of the Convention and the other international texts listed is quite interesting and tricky. Reviewing the Explanatory Notes and the other documents related to the approval of the Convention, even so many months after the approval in July 2005, I still remember the tension in the Commission during those two weeks.[38] It is not easy to strike a tenable balance between two apparently difficult-to-match propositions. On one side is the Convention's stated goal of avoiding "substantive law issues related to the formation of contracts or with the rights and obligations of the parties to a contract concluded by electronic means."[39] On the other side is an acknowledgment that "a strict separation between technical and substantive issues in the context of electronic commerce is not always feasible or desirable."[40] As indicated in the Explanatory Notes, examples of provisions of not merely technical nature include those dealing with "[l]ocation of the parties" (article 6), "[l]egal recognition of electronic communications" (article 8), form requirements (article 9), "[t]ime and place of dispatch and receipt of electronic communications" (article 10), "[i]nvitations to make offers" (article 11), and "[e]rror[s] in electronic communications" [page 260] (article 14).[41]

Similarly, the relationship between the ECC and the Regional Economic Integration Organizations ("REIO") drew quite some discussion within the Commission. The dry, but professional, language of the Explanatory Notes does not even remotely give the reader a sense of the tension permeating the Commission while working on the approval of that provision (article 17).[42]

(2) Relationship between the Electronic Communications Convention and Regional Economic Integration Organizations' Rules

Even though the Convention does not provide an express definition of a REIO, article 17 seems to focus on one of its main features: an organization of sovereign states provided with the competence to regulate those matters falling within the scope of the Convention.[43] Although flexible, this notion does not open the doors to all international organizations, but only those enabled to legally bind its contracting States. It is unlikely but technically possible that conflicting declarations by REIO and its member states may be entered. Needless to say, that if this were to happen it would be very confusing.

One interesting aspect of article 17 is the relationship between the ECC and rules enacted by regional economic integration organizations. Pursuant to article 17(4), the Convention does not prevail "over any conflicting rules of any regional economic integration organization as applicable to parties whose respective places of business are located in member States of any such organization, as set out by declaration made in accordance with article 21."[44] [page 261]

The draft submitted to the Commission did not contain article 17(4).[45] The wording, as well as the content, of this paragraph was hotly debated within the Commission.[46] The Commission added this disconnection clause following a proposal from the European Commission to address the issues posed when parties to a contract falling within the Convention have their place of business in a state that was also a member of a REIO.[47] Although some delegates to the UNCITRAL strongly disagreed with the possibility of having a provision in a United Nations text effectively prescribing "to member States of regional economic integration organizations what rules they should apply as a result of their membership in such an organization,"[48] the UNCITRAL eventually decided to introduce the fourth paragraph.[49] "The purpose of this exception is to avoid interference with rules enacted by a [REIO] to harmonize private commercial law within the territory of the organization with a view to facilitating the establishment of an internal market among its member States."[50] [page 262]

(3) Scope of application

To better understand the interaction between the two conventions as well as their scopes, relevant provisions from each will be compared.

CISG article 1

      (1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States: (a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State.

      (2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract.

      (3) Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention.[51]

ECC article 1

      (1) This Convention applies to the use of electronic communications in connection with the formation or performance of a contract between parties whose places of business are in different States.
 

      (2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between the parties at any time before or at the conclusion of the contract.

      (3) Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention.[52]

The ECC applies to the "use of electronic communications in connection with the formation or performance of a contract between parties whose places of business are in different States."[53] It is important to emphasize that the Convention applies to electronic communications used in connection with the formation [page 263] or performance of an existing or a contemplated contract.[54] Moreover, the ECC concerns electronic communication between parties to an existing or contemplated contract.[55] The electronic communication may also involve non-parties to the contract and still be covered by the ECC.[56] In this case, these communications will fall within the scope of the Convention only if their dealings are subject to the Convention.[57] For purposes of the Convention, the word "contract" is "used in a broad way and includes, for example, arbitration agreements and other legally binding agreements whether or not they are usually called contracts."[58] The Convention excludes from its application electronic communications involving certain kinds of transactions, such as "contracts entered into for personal, family or household purposes."[59]

The territorial sphere's requirements under the two conventions are also different. While the CISG requires that both parties to an international transaction be located in Contracting States (or the applicable "rules of international private law lead to the application of the law of a Contracting State"),[60] the Convention does not have a similar requirement. Although the Working Group initially considered introducing a provision analogous to CISG article 1(a) to ensure consistency between the two conventions, "as the Working Group's deliberations progressed and the impact of the [ECC] became clearer, the need for parallelism between the [ECC] and the [CISG] was questioned since it was felt that their respective scopes of application were in any event independent of each other."[61]

Article 19 is also relevant for purposes of the Convention's [page 264] scope of application. It provides that, through a declaration, Contracting States may limit the application of the Convention only to those cases in which the parties are located in ECC Contracting States or when the parties have agreed to have it govern the transaction.[62]

Three possible scenarios might result from a declaration under article 19. First, if the forum State has made a declaration under article 19, the ECC will be applied to the matter regardless of rules of private international law if both States where the parties have their place of business are Contracting States to the Convention.[63] Second, if the forum State has not made such a declaration, the application of the Convention depends on three factors: (i) whether the forum State "rules of private international law point to the laws of the forum State, of another Contracting State or of a non-Contracting State;" (ii) whether the State so determined "has made a declaration pursuant to article 19" and (iii) whether "both parties have their places of business in different Contracting States."[64] If the applicable law is that of the forum State or another Contracting State that has not made an article 19 declaration, the ECC will be applied even if the parties are not located in two different Contracting States.[65] If the applicable law is that of a Contracting State that has made an article 19 declaration, the Convention applies only if both parties are located in two different Contracting States.[66] If the applicable law is that of a non-Contacting State, the Convention will not be applicable.[67] Third, if the forum State is a non-Contracting State, the applicability of the Convention depends on the same three factors as under the second scenario.[68] [page 265]

(4) Location of the parties

CISG article 1

      (1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States: when the States are Contracting States; or when the rules of private international law lead to the application of the law of a Contracting State.[69]

CISG article 10

      For purposes of this Convention:

      (a) if a party has more than one place of business, the place of business is that which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract;

      (b) if a party does not a place of business, reference is to be made to his habitual residence.[70]

ECC article 6

      1. For the purposes of this Convention, a party's place of business is presumed to be the location indicated by that party, unless another party demonstrates that the party making the indication does not have a place of business at that location.

      2. If a party has not indicated a place of business and has more than one place of business, then the place of business for purposes of this Convention is that which has the closest relationship to the relevant contract, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract.

      3. If a natural person does not have a place of business, reference is to be made to the person's habitual residence.

      4. A location is not a place of business merely because that is: (a) where equipment and technology supporting an information system used by a party in connection with the formation of a contract are located; or (b) where the information system may be accessed by other parties.

      5. The sole fact that a party makes use of a domain name or electronic mail address connected to a specific country does not create a presumption that its place of business is located in that country.[71][page 266]

Assuming that the parties entered into a contract for the sale of goods, CISG article 1 provides that the CISG applies when the parties' places of business are located in different States.[72] How can one determine, in the context of electronic transactions, where the parties are located? The answer under the ECC can be found in article 6 which, as opposed to the CISG,[73] provides a definition of a place of business.[74] Under the Convention, a "place of business means any place where a party maintains a non-transitory establishment to pursue an economic activity other than the temporary provision of goods or services out of a specific location."[75] Some delegates suggested avoiding any definition of place of business and having the otherwise applicable domestic law define the term. The majority, however, was in favor of defining the concept of "place of business" consistent with other several ECC provisions, including those concerning the time and place of dispatch and receipt of electronic communications.[76]

The Convention does not introduce a positive duty to disclose the party's location, something that can be particularly difficult with parties having multiple potential places of business.[77] [page 267] However, the Convention introduces a rebuttable presumption creating ways to determine a place of business if none is disclosed.[78] If the other party rebuts the presumption or if the party fails to state its place of business when it has more than one of them, the place of business for this party would be the one closest to the contract.

In contrast to the ECC, the CISG indicates that the place of business is the one closest relationship to "performance" of the contract which necessarily creates ambiguity in the interpretation of article 10.[79] While this ambiguous determination has not been included in ECC, the "habitual residence" determination for a natural person is part of the ECC.[80]

For purposes of determining the place of business, ECC article 6(4) also makes clear that "[a] location is not a place of business merely because that is: (a) where equipment and technology supporting an information system used by a party in connection with the formation of a contract are located; or (b) where the information system may be accessed by other parties."[81] Article 10(4) reiterates the concepts by stating that

"paragraph 2 of this article [dealing with the time of receipt of an electronic communication] applies notwithstanding that the place where the information system supporting an electronic address is located may be different from the place where the electronic communication is deemed to be received under paragraph 3 [the place where the electronic communications is [page 268] deemed to be dispatched] of this article."[82]

The issue of defining the party's location in electronic transactions is particularly important. It has been suggested, for example, with reference to the CISG, that

"[i]t may be appropriate to consider taking into account the address from which the electronic messages are sent. Where a party uses an address linked to a specific country (such as the address ending in ".at", ".fr", ".it", etc.), one could argue that the place of business should be located in that country. Thus, a sales contract concluded between a party using an address ending in ".at" and one using an address ending in ".fr" would have to be considered international. This solution would have the advantage of necessarily making the parties aware that the contract may not be a domestic one."[83]

Although the suggestion has been made with the CISG in mind, it is a stretch to say that, when the parties have e-mail addresses ending in ".com", ".net", or the like, "the contract is always international."[84] The CISG and the ECC require that parties' places of business must be located in different contracting states, and this fact must "appear" from the "contract or from dealings between the parties or from information disclosed by the parties before or at the time of conclusion of the contract."[85] Unless there are some other indications, clearly ".com" and ".net" addresses do not provide any information as to the locations of the parties. Actually, the ECC goes even farther: "[t]he sole fact that a party makes use of a domain name or electronic mail address connected to a specific country does not create a presumption that its place of business is located in that country."[86] Therefore, standing alone, addresses containing ".com" and ".net" as well as those containing country specific indicators (such as ".it" for Italy and ".fr" for France) do not give any presumption as to the location of the parties under ECC. A court or arbitrator may, however, "take[] into account the [page 269] assignment of a domain name as a possible element, among others, to determine a party's location, where appropriate."[87]

(5) Treatment of contracts, form requirements [88]

CISG article 6

      The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary from the effect of any of its provisions.[89]

CISG article 11

      A contract of sale need not to be concluded or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.[90]

CISG article 13

      For purposes of this Convention "writing" includes telegram and telex.[91]

ECC article 3

      The parties may exclude the application of this Convention or derogate from or vary the effect of any of its provisions.[92]

ECC article 8

      (1) A communication or a contract shall not be denied validity or enforceability on the sole ground that it is in the form of an electronic communication. (2) Nothing in this Convention requires a party to use or accept electronic communications, but a party's agreement to do so may be inferred from the party's conduct.[93]

ECC article 9

      (1) Nothing in this Convention requires a communication or a contract to be made evidenced in any particular form.[94]

The CISG does not require any particular form for purposes of concluding or evidencing a contract, except for those instances where the parties agreed to use only written communications.[95] In [page 270] any case, parties are free to "adjust" their contract to their needs by opting out or varying the effect of any of its provisions, subject, however, to article 12.[96]

The CISG was conceived, drafted, and ratified when the Internet and electronic communications were not so prevalent in our every-day life. Therefore, no mention of alternative methods of communications was made within the CISG, except for "telegram" and "telex."[97]

Although the CISG does not deal explicitly with electronic communications, this does not mean that the CISG does not apply to a sale contract negotiated or concluded through electronic communications. Since a contract governed by the CISG need not be concluded in or evidenced by any particular form, resorting to electronic communications poses no problems for purposes of the CISG, except where: a) the contracting State has entered a reservation on the written form of the contract under articles 12 and 96 or b) the parties have agreed to use only written communications in their dealings.[98] Thus, within these limits, parties to a CISG contract may resort to electronic means for purposes of conducting negotiations and concluding contracts.[99] In addition, Article 7(2) provides another, albeit more general, route for getting electronic communications within the CISG.[100]

The Electronic Communications Convention, consistent with the CISG, expressly provides the parties with the power of derogating [page 271] or varying the effects of its provisions.[101] However,

"[t]he principle of party autonomy in draft article 3, which is also contained in other UNCITRAL instruments, such as in article 6 of the United Nations Sales Convention, should not be understood as allowing the parties to go as far as relaxing statutory requirements on signature in favour of methods of authentication that provide a lesser degree of reliability than electronic signatures. Generally, it was said, party autonomy did not mean that the draft convention empowers the parties to set aside statutory requirements on form or authentication of contracts and transactions."[102]

In addition to the principle of party autonomy and neutrality regarding the means used for transacting, concluding, and evidencing a contract (principles already expressed in the CISG),[103] the Convention also expresses the principle that a contract should not be denied validity or enforceability, by way of affording less or no value at all, solely because it occurred electronically.[104] Both the principle of functional equivalence and technological neutrality are directly and indirectly recognized in several ECC articles.[105]

Although the principles of technological neutrality and functional equivalence might be relatively easy to state, it is quite different to apply them to actual situations. There is little doubt that electronic means of communications pose technical issues that standard writings do not. For example, an exchange of an electronic communication presupposes the existence of a complex electronic network with its peculiar technical features. Another example would be the opportunity for fraudulent conduct. Although fraud occurs outside the virtual word, preventing it in electronic communications poses unique difficulties. Other [page 272] problems relate to the application of traditional rules that presuppose the existence of a physical place (place of business, place of conclusion of contract, place where a fraud occurred, and so forth) or of an actual piece of paper (for signature, evidence, notarization, and many other purposes). How can technological neutrality and functional equivalence be pursued in these situations? The Convention deals with this issue in three basic areas: "writing," "signature," and "original."[106]

As to those cases where the applicable law requires specific writing requirements, the task of making electronic means legally equivalent to traditional writings becomes challenging. Consider, for example, domestic rules that require that certain kinds of contracts or provisions be in writing, signed, or available in their original form. Why, in connection with certain kind of contracts or provisions, do even standard rules require fulfilling such additional requirements? Presumably it is for purposes of assuring integrity and reliability. How can integrity and reliability be achieved in the e-world? It can be done by introducing some requirements intended to address the peculiarity of the e-world. In this respect, fearing that the introduction of enhanced requirements for electronic communications could be construed to limit the operation of the two guiding ECC principles, the Commission addressed the integrity and reliability issues by spelling out, for each instance, how the additional domestic requirements (set forth for the purposes of addressing integrity and reliability issues) can be met by an electronic communication.

For example, the ECC provides that, where domestic law requires that the contract must be in writing, the domestic requirement is met as long as the electronic communication version is "accessible so as to be useable for subsequent reference."[107] As summarized in the Explanatory Notes:

"The word 'accessible' is meant to imply that information in the form of computer data should be readable and interpretable, and [page 273] that the software that might be necessary to render such information readable should be retained. The word 'usable' is intended to cover both human use and computer processing. The notion of 'subsequent reference' was preferred to notions such as 'durability' or 'non-alterability,' which would have established too harsh standard, and to notions such as 'readability' or 'intelligibility,' which might constitute too subjective criteria.[108] Therefore, ECC article 9(2) focuses on the minimum requirements that the information can be reproduced and read rather than setting a fixed rule for determining when an electronic communication fulfill the functions of a paper-based writing."[109]

As for signatures, concerns as to authenticity require meeting additional measures. To this end,

ECC article 9(3) establishes that an electronic signature constitutes a substitute for handwritten signatures or other procedures meant to authenticate a writing if:

"(a) A method is used to identify the party and to indicate that party's intention in respect of the information contained in the electronic communication; and

"(b) The method used is either:

      (i)   As reliable as appropriate for the purposes for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement; or
 
      (ii) Proven in fact to have fulfilled the functions described in subparagraph (a) above, by itself or together with further evidence."[110]

Therefore, if under domestic law a signature is required, the signature requirement can be met by a proper indication of intent and use of a reliable and appropriate method. The reliability of the method may be proved in any manner (to the extent it is admissible under the applicable domestic law).[111] The "reliability test" however should not be used to challenge a party's own signature on the ground that the signature was not reliable where the identity is [page 274] not disputed and the party's intention can be proved.[112] The ECC provides criteria for the legal recognition of electronic signatures irrespective of the technology used and does not identify specific equivalents to particular functions of handwritten signatures.[113]

Finally, the Convention deals with those instances whereby domestic law requires an original paper document.[114] When such a requirement has been put in place, an electronic communication will be adequate if:

"(a) There exists a reliable assurance as to the integrity of the information it contains from the time when it was first generated in its final form, as an electronic communication or otherwise; and

"(b) Where it is required that the information it contains be made available, that information is capable of being displayed to the person to whom it is to be made available."[115]

As for "writings" and "signatures," then, the Electronic Communications Convention sets up minimum requirements to be met for an electronic communication to be deemed to be as a functional equivalent of an original. These requirements, however, cannot be made stricter by a Contracting State because it would compromise the purposes of the Convention.[116]

In conclusion, while electronic communications may pose specific concerns with integrity, authenticity, and reliability issues, there are, nonetheless, perfectly capable means of achieving the same effects and consequences of other communication methods. Some prophylactic measures must be taken when dealing with these issues, but these measures should not be used to alter the substance of the driving principles of technical neutrality and functional equivalence that underlie the Convention. [page 276]

(6) Time and place of dispatch and receipt of electronic communications.[117]

CISG article 15

      a. An offer becomes effective when it reaches the offeree. b. An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer.[118]

CISG article 18(2)

      An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise.[119]

CISG article 24

      For purposes of the Part of the Convention [Formation of the Contract], an offer, declaration of acceptance or any other indication of intention "reaches" the addressee when it is made orally to him or delivered by any other means to him personally, to his place of business or mailing address or, if he does not have of business or mailing address, to his habitual residence.[120]

ECC article 10

      (2) The time of receipt of an electronic communication is the time when it becomes capable of being retrieved by the addressee at an electronic address designated by the addressee. The time of receipt of an electronic communication at another electronic address of the addressee is the time when it becomes capable of being retrieved by the addressee at that address and the addressee becomes aware that the electronic communication has been sent to that address. An electronic communication is presumed to be capable of being retrieved by the addressee when it reaches the addressee's electronic address.

      (3) An electronic communication is deemed to be dispatched at the place where the originator has its place of business and is deemed to be received at the place where the addressee has its place of business, determined in accordance with article 6.

      (4) Paragraph 2 of this article applies notwithstanding that the place where the information system supporting an electronic address is located may be different from the place where the electronic communication is deemed to be received under paragraph 3 of this article.[121][page 276]

Effectiveness of Electronic Communications

For purposes of the CISG, even if a proposal for a contract meets all of the requirements under article 14, it becomes effective as an offer only when it reaches the offeree.[122] An oral offer is an instantaneous communication and it reaches the offeree (and therefore becomes effective) when it is made.[123] A written offer reaches the offeree (and therefore becomes effective) when it is delivered to the offeree personally or to "his place of business or mailing address or, if he does not have place of business or mailing address, to his habitual residence."[124] An acceptance becomes effective when the "assent reaches the offeror," assuming that the acceptance reaches the offeror on time.[125]

While the CISG provides that the sender bears the risk of communications occurring before the conclusion of the contract,[126] with regard to communications occurring after the formation of the contract the CISG seems to embrace a different assumption. CISG article 27 states

"[u]nless otherwise expressly provided in this Part [Part III - Sale of Goods] of the Convention, if any notice, request or other communication is given or made by a party in accordance with this Part and by means appropriate in the circumstances, a delay or error in the transmission of the communication or its failure to arrive does not deprive that party of the right to rely on the communication."[127]

With certain exceptions, the risk of delay or errors in notices, requests or other communications given or made by a party in accordance with Part III of the CISG falls on the addressee rather than the sender.[128] Examples of notices falling within the province [page 277] of article 27 are: notice of consignment,[129] non-conformity,[130] third-party claims,[131] request for specific performance,[132] price reduction,[133] damages,[134] fixing additional period for performance,[135] avoidance,[136] risk of loss,[137] and preservation of goods.[138] It must be noted, however, that (i) article 27 applies to any other communication the parties must give pursuant to their contract, unless the parties have agreed otherwise; (ii) some provisions of Part III of the CISG provide that the communication becomes effective when it reaches the addressee;[139] and (iii) the sender must use an appropriate mode of transmission or else the communication is ineffective.[140]

The CISG distinguishes between communications that are instantaneous, such as an oral communication by phone, and non-instantaneous forms of communication, such as telegram and writings.[141] There are instances in the CISG in which different rules apply depending on the category in which the communication falls.[142]

The ECC does not create an additional set of substantive rules concerning contract formation and electronic communications,[143] but rather provides specific rules intended to supplement domestic rules on dispatch and receipt of electronic communications.[144] The challenge is finding out how and to what extent the ECC rules provide clarifications. [page 278]

The way the Convention deals with electronic communications is very similar to the way the CISG deals with traditional means of communication. Under both the CISG and the ECC we find familiar concepts, such as, "dispatch," "receipt," and "reach." For purposes of the ECC, a communication is dispatched when it leaves the information system of the originator and reaches the addressee when it becomes capable of being retrieved by the addressee at an electronic address designated by the addressee.[145] Once the electronic communication is capable of being retrieved at the addressee's e-mail address, ECC article 10 creates a rebuttable presumption that the electronic communication has been received by the addressee.[146] Whether the communication is capable of being retrieved or not is a factual question outside the scope of the Convention.[147] Finally, as to the "receipt" of an electronic communication, the test is an objective one as it is based on the time of entry into the information system.[148]

It should be noted that the ECC, similarly to other international instruments,[149] distinguishes between delivery of messages to a specifically designated electronic address and delivery of messages to an address not specifically designated.[150] Under the Convention, if a message is sent to a designated electronic address it is received when it reaches that address.[151] When an electronic communication is sent to a non-designated address, a message is received when (i) the electronic communication "becomes capable of being retrieved by the addressee at that address" (which occurs when the communication reaches an electronic address of the addressee) and [page 279] (ii) the addressee actually "becomes aware that the electronic communication has been sent to that address."[152]

The Convention, however, in contrast to the Model Law, does not specifically address when communications are sent to a non-designated information system. "The Model Law distinguishes between communications sent to an information system other than the designated one and communications sent to any information system of the addressee in the absence of a particular designation."[153]

Withdrawal of offer, revocation of an offer, and rejection

How can a withdrawal of an offer made electronically be accomplished? For purposes of the CISG, an offeror can withdraw the offer, even if it is irrevocable, if the "withdrawal reaches the offeree before or at the same time as the offer."[154] Once the offer reaches the offeree, subject to CISG article 16(2), an offeror may revoke the offer as long as "the revocation reaches the offeree before he has dispatched an acceptance."[155] Finally, an offer, even if it is irrevocable, is terminated when a rejection, dispatched by the offeree, reaches the offeror.[156]

If electronic communication is the only method for the parties to communicate, withdrawing an offer might seem very difficult. Assume, for example, that the offeror is in the United States and the offerree is in Europe. The offeror e-mails his offer at 8 pm. Then, two or three hours later, he discovers something about the offeree, changes his mind about the offer and he dispatches a withdrawal. Assuming that the offer and the withdrawal are delivered to the offeree in the same sequence as dispatched, when the offeree checks his e-mail, he will have an offer first, then a withdrawal. This example illustrates some of the difficulties of an effective withdrawal in the context of electronic communications, assuming that the parties decided to negotiate exclusively through [page 280] electronic communications. This difficulty is a consequence of the ECC's approach. Under the Convention, the time of receipt depends on the addressee's ability to retrieve the communication, not on the entry of the information into the system.[157] The Commission, however, noted that the difference in wording will not cause uncertainty as to the determination of the time of retrieval which is still to be determined pursuant to an objective method.[158] The Commission indicated that

"[d]espite the different wording used, the effect of the rules on receipt of electronic communications in the draft convention is consistent with the article 15 of the UNCITRAL Model Law on Electronic Commerce. As is the case under article 15 of the Model Law, the draft convention retains the objective test of entry of a communication in an information system to determine when an electronic communication is presumed to be 'capable of being retrieved' and therefore 'received.' The requirement that a message should be capable of being retrieved, which is presumed to occur when the message reaches the addressee's electronic address, should not be seen as adding an extraneous subjective element to the rule contained in article 15 of the Model Law. In fact "entry" in an information system is understood under article 15 of the Model Law as the time when a data message 'becomes available for processing within that information system,' which is arguably also the time when the message becomes 'capable of being retrieved' by the addressee.[159] Thus, notwithstanding the language used, the Convention retains the objective test taken from the U.N. Model Law because the most accessible and reliable proof of when the electronic communication has left an information system is the information as to when the electronic communication was delivered to the destination or intermediary transmission system."[160]

Place of dispatch and receipt of an electronic communication

ECC article 10(3) and (4) specifically deal with the issue of the [page 281] place of dispatch or receipt of an electronic communication.[161] Regardless of where the information system is located or from where the communication is retrieved, for purposes of the Convention, this place is the "place of business, as determined pursuant to Article 6."[162] Notwithstanding the wording, "paragraph 3 contains a firm rule and not merely a presumption."[163] The rationale behind these rules is to ensure that "there is some reasonable connection between the addressee and what is deemed to be the place of receipt, and that that place can be readily ascertained by the originator."[164]

(7) Place of conclusion of a contract

The CISG applies to sales contracts when the parties have their place of business in different states or "the rules of international private law lead to the application of the law of a Contracting State."[165] If the rules of international private law determine the applicable law based on the place of conclusion of the contract, where did the parties conclude the contract? For purposes of this article, the place the contract is concluded is not relevant. However, the place of conclusion of the CISG contract might be relevant for purposes of the court's jurisdiction and, in general, for other domestic law purposes. If the applicable law is the CISG, how can one determine where the contract was concluded? Article 23 merely states that "[a] contract is concluded when an acceptance of an offer becomes effective in accordance with the provisions of this Convention."[166] This means, reading in conjunction with CISG [page 282] article 18(2), that a contract, subject to CISG article 18(3), is concluded when the acceptance "reaches" the offeror.[167] There is nothing in the CISG that indicates where the contract is concluded. Is this "gap" to be resolved pursuant to CISG article 7(2) or is it outside the scope of the CISG? The CISG history clearly indicates that a proposal to link the time of the conclusion of the contract with the place of the conclusion of the contract was rejected

"for conflicting reasons. Some thought that the place would in any event be determined by the time, others thought that it would be undesirable to link place automatically to time, and still others thought that no provision on place was needed since the Convention would not refer to place of conclusion, but only to time."[168]

In light of this history, the Secretariat Commentary on article 21 [draft counterpart of CISG article 23] states that

"[s]uch a provision [dealing with place of conclusion] is unnecessary since no provision of this Convention depends upon the place at which the contract is concluded. Furthermore, the consequences in regard to conflicts of law and judicial jurisdiction which might arise from fixing the place at which the contract is concluded are uncertain and might be unfortunate. However, the fact that article 21 [draft counterpart of CISG article 23], in conjunction with article 16 [draft counterpart of CISG article 18], fixes the moment at which the contract is concluded may be interpreted in some legal systems to be determinative of the place at which it is concluded."[169]

It seems, then, reasonable to conclude that it is an external gap governed by the otherwise applicable domestic law. The Secretariat Commentary recognizes that in many instances the time when the contract is concluded may also be relevant for purposes [page 283] of determining where the contract was concluded,[170] but such relevance is a matter for domestic law.[171]

Like the CISG, the ECC does not tackle the gap issue, at least directly. The ECC, however, does provide direction for determining the place of conclusion of an e-contract. ECC article 10(3) provides that "[a]n electronic communication is deemed to be dispatched at the place where the originator has its place of business and is deemed to be received at the place where the addressee has its place of business, as determined in accordance with article 6."[172] ECC article 10(4) is also relevant for this purpose: "Paragraph 2 of this article applies notwithstanding that the place where the information system supporting an electronic address is located may be different from the place where the electronic communication is deemed to be received under paragraph 3 of this article."[173]

As an example, suppose an electronic inquiry for additional information is e-mailed to a seller who is currently attending a fair in a country different from her place of business. The seller's information system[174] is located in a third country. The seller offers to sell goods to the buyer at the terms and conditions indicated in her e-mail. The buyer, who is attending a conference in a country different from her place of business, immediately replies and accepts the terms of the sale as indicated by the seller. [page 284] The buyer's information system is not located in her country of business. Assuming that the seller and buyer are located in CISG countries and that the ECC also applies to this electronic transaction, the contract is concluded when the acceptance reaches the seller, which, pursuant to ECC article 10(2) is when the acceptance becomes capable of being retrieved by the seller.[175] Although not relevant for purposes of the CISG, domestic law might be relevant to establish where the contract was concluded.[176] In this example, the ECC is useful because it clearly provides that (i) there is a presumption that an electronic communication is dispatched and received at, respectively, the place of business of the originator[177] and of the addressee, regardless of where the originator or the addressee might be when accessing the e-mails and (ii) the location of the information system is not relevant for purposes of determining the parties' place of business.[178]

(8) Contract concluded through an automated message system [179]

So far, only traditional contracts negotiated and entered into by natural persons have been examined. It is quite clear, however, that a substantial number of transactions are or will be completed through automated systems. The CISG, once again, does not even consider such a possibility. Does this mean that contracts so concluded are outside the scope of the CISG? The application of the CISG does not depend on whether a human being intervenes in the contracting process, but merely requires that a seller (or an automated system under the seller's control) and buyer (or an automated system under the buyer's control) both be in a CISG country or that the CISG apply.[180] Under the Convention, the possibility of entering into a contract concluded through an automated system (also called electronic agent) is expressly [page 285] considered.[181] In light of technological neutrality and functional equivalence principles, in fact, no discrimination should be made because of the means of communication used to enter into a contract.[182] To this end, ECC article 12 provides as follows:

"A contract formed by the interaction of an automated message system and a natural person, or by the interaction of automated message systems, shall not be denied validity or enforceability on the sole ground that no natural person reviewed or intervened in each of the individual actions carried out by the automated message systems or the resulting contract."[183]

The Convention merely reiterates the general rule that a contract can be formed through the intervention of automated systems.[184] The Convention provides that a proposal made to a party through its automated system (whether or not fully automated) does not, by itself, create a binding offer, but merely an invitation to make an offer, unless the system "clearly indicates the intention of the party making the proposal to be bound in case of acceptance."[185] As noted, the

"underlying principle to this general rule is the concern that attaching a presumption of binding intention to the use of interactive contracting applications would be detrimental for sellers holding a limited stock of certain goods, if the seller were to be liable to fulfill all purchase orders received from a potentially unlimited number of buyers."[186]

Contracts concluded "by the interaction of an automated message system and a natural person, or by interaction of automated message systems" are expressly provided for by the Convention.[187] The assumption is that actions taken by automated [page 286] message systems are attributed to the person or the legal entity behind that system.[188] In fact, "electronic communications that are generated automatically by message systems or computers without direct human intervention should be regarded as 'originating' from the legal entity on behalf of which the message system or computer is operated."[189]

The ECC does not provide guidance on when the conclusion of the contract occurs and what the terms are. To resolve such issues, applicable substantive law should be applied.[190] The Convention, however makes it clear that validity of the contract is not affected by the fact that the resulting contract or individual actions leading to the contract are entered into and not reviewed by a human being.

(9) Errors[191]

In general

CISG article 4 provides that:

"[The CISG] governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. In particular, except as otherwise expressly provided in this Convention it is not concerned with:

(a) the validity of the contract or of any of its provisions or of any usage;

(b) the effect which the contract may have on the property in the goods sold."[192]

Article 4 has been understood to say that questions of validity of the contract are outside the scope of the CISG, and, therefore, [page 287] should be decided according to the applicable domestic law.[193] Therefore, "issues such as capacity to contract, and the consequences of mistake, duress and fraud, are left to applicable domestic law,"[194] with the exclusion of mistakes concerning the quality of the goods.[195] It should be noted, however, that the "validity" issue under the CISG has been discussed in hundreds of commentaries and dealt with in various court decisions.[196] Issues of validity aside, what matters is that the CISG does address the mechanism dealing with concluding the contract.[197]

Errors in electronic communication [198]

In drafting ECC article 14 it was suggested that:

"errors that occurred in interactions between individuals and automated information systems that did not offer the individual an opportunity to review or correct the errors. Rather than requiring generally that an opportunity to correct errors should be provided, the draft article should limit itself to providing consequences for the absence of such a possibility. Those consequences, it was further suggested, should be concerned only with avoiding the effects of errors contained in a data message and should not automatically affect the validity of the contract."[199]

The Convention is not intended to provide or interfere with any [page 288] other substantive law dealing with errors,[200] but recognizes that the risk of errors made by individuals when dealing with automated systems is higher than in other more traditional manners of transacting.[201] This is why the Convention deals only with this kind of error. Any other kind of error, as well as the conditions for withdrawal or avoidance of a contract resulting from errors not included in article 14, are outside the scope of the ECC and are governed by the applicable domestic law. ECC article 14 provides:

"1. Where a natural person makes an input error in an electronic communication exchanged with the automated message system of another party and the automated message system does not provide the person with an opportunity to correct the error, that person, or the party on whose behalf that person was acting, has the right to withdraw the portion of the electronic communication in which the input error was made if:

(a) The person, or the party on whose behalf that person was acting, notifies the other party of the error as soon as possible after having learned of the error and indicates that he or she has made an error in the electronic communication; and

(b) The person, or the other party on whose behalf that person was acting, has not used or received any material benefit or value from the good or services, if any, received from the other party.

"2. Nothing in this article affects the application of any rule of law that may govern the consequences of any error other than as provided for in paragraph 1."[202]

Under the Convention, although an input error[203] may be remedied by allowing this party to withdraw that portion of the electronic communication, this opportunity is limited.[204] First, the party who made the mistake must notify the other party as soon as possible once she learns about the mistake and, second, a claim of error is subject to the absence of any material benefit from the [page 289] goods.[205] Moreover, note that (i) the party who makes the mistake must be a natural person, as opposed to an automated system; (ii) the mistake must occur when dealing with an automated system that does not provide for an opportunity to correct the mistake; and (iii) the notification of the error must be done as soon as possible, which is quite a strict standard.[206]

Clearly, this set of rules dealing with input errors are not meant to be medium-neutral but expressly deal only with errors that occur in an electronic environment.[207] Since these errors are very likely to occur, the Convention expressly deals with them by according the party who made the mistake a right to withdraw that portion of the communication tainted with the error.[208] The remedy, however, is an exceptional one and must be evaluated by examining the circumstances of its occurrence. Note, also, that the Convention provides neither for a right to avoid the consequences of the error nor for a right to correct the error. The Commission, after extensive discussion, "agreed that the person who makes an error should only have the right to withdraw the portion of the electronic communication in which the error was made."[209] The policy behind this decision was that

"UNCITRAL was not willing to create a general right to "correct" erroneous communications, as this would have introduced additional costs for system providers and given remedies with no parallel in the paper world. ... A right to correct electronic communications would also cause practical difficulties, as operators of automated message systems may more readily provide an opportunity to nullify a communication already recorded than an opportunity to correct errors after a transaction was concluded. Furthermore, a right to correct errors might entail that an offeror who received an electronic communication later alleged to contain errors must keep its original offer open since the other party had effectively replaced the communication withdrawn."[210] [page 290]

The right to withdraw involves only that portion of the electronic communication in which the input error was made, the goal of which is to preserve as much as possible, even though it is clear that a withdrawal of an electronic communication involving an essential element of the contract might ultimately even prevent the formation of a contract, if the error involved such an essential element.[211] Finally, it should be noted that under article 14(1)(b), a party loses the right to withdraw the electronic communication if that party has used or received any material benefit from the goods received form the other party.[212]

Two major problems concern errors originated from within an automated system: Who bears the risk of the error and how can we distinguish between human errors and errors generated by an automated system?  Compare, for example the following cases. On one side, is the Chwee Kin Keong v. Digilandmall.com decided by the High Court of Singapore.[213] In Chwee, the defendant, Digilandmall.com, placed an advertisement for the sale of color printers worth S$3,854 (Singapore dollars) for the price of only S$66, due to an inadvertent mistake caused by uploading on the website a set of figures prepared for a training session.[214] By the time the mistake was discovered several days later, 784 individuals (six of whom were the plaintiffs for the dispute) had already placed 1,008 purchase orders via the Internet for over 4,086 laser printers.[215]

The orders were processed by Digilandmall's automated order system and confirmation notes were automatically dispatched via e-mail within minutes.[216] None of the automated confirmatory e-mail responses contained any reference to availability of the goods, but merely invited buyers to call back.[217] Moreover, the web page [page 291] entitled "checkout--order confirmation" included the following statement: "The earliest date on which we can deliver all the products to you is based on the longest estimated time of stock availability plus the delivery lead time."[218] Upon discovery of the error, Digilandmall.com refused to honor the contracts on the basis that the posted price was "a unilateral mistake that vitiated all the 'contracts."'[219]

The Court, noting that the parties did not address the contract formation issue, applied the Singapore Electronic Transactions Act (ETA) to the dispute.[220] The court, reading section 15(1) of the ETA with section 24 of CISG, concluded that the default position for e-commerce transactions would be the "receipt" rule.[221] But because "[i]nevitably mistakes will occur in the course of electronic transmissions," this rule should be applied flexibly to "minimize unjustness."[222] As an example of this flexibility, the rule was applied by analogy to one plaintiff even though that plaintiff did not receive a confirmation e-mail because his inbox was full.[223]

On the issue of errors occurring in electronic contracting, the Court noted that

"[e]xamples of such mistakes were: (a) human error (b) programming of software errors and (c) transmission problems in the communication systems. Computer glitches can cause transmission failures, garbled information or even change the nature of the information transmitted. This case is a paradigm example of an error on the human side. Such errors can be magnified almost instantaneously and may be harder to detect than if made in a face to face transaction or through physical document exchanges."[224]

As to the contract formation issue and the impact of errors, the Court found that the although the "elements of an offer and acceptance are ex facie satisfied in every transaction asserted in the [page 292] plaintiffs' claims"[225] the plaintiffs would

"each have separately realised and appreciated, before placing their purchase orders, that a manifest mistake had occurred -- even if no communications on the error had taken place between them. Further, the character of the mistake was such that any reasonable person similarly circumstanced as each of the plaintiffs would have had every reason to believe that a manifest error had occurred."[226]

The Court concluded that the purchase contracts were void under common law due to unilateral mistake and dismissed the claims accordingly.[227]

On the other hand, several German cases, which seem to be factually similar to the one just discussed, were handled in a different manner.[228] As to the facts,

"[t]he cases related to sales of goods erroneously offered over the Internet for a price below the price intended by the seller. They all involved interactive applications that generated automatic replies from the seller stating that the customer's "order" (Auftrag) would be immediately "carried out" (ausgeführt). It was surmised that the errors were computer-made and had occurred during processing and posting of the seller's information on web sites maintained by independent Internet [page 293] service providers."[229]

The German courts noted that

"automated communications were attributable to the persons on whose behalf the system had been programmed and in whose names the messages were sent. The courts consistently regarded the advertisement of goods via the Internet as a mere invitation to treat (invitatio ad offerendum) and considered that a binding contract would only come into being once the seller had accepted the buyer's bid (offer). The courts further affirmed the legal value of the messages sent by the automatic reply function as binding expressions of intention (Willenserklärung) and valid acceptances for purposes of contract formation."[230]

Nevertheless, the courts reached different conclusions. In fact,

"one court of appeals found that the pricing error in the Internet advertisement vitiated the seller's acceptance and rendered it invalid. Two district courts, in turn, regarded the invitation to treat expressed through the Internet advertisement as a separate legal act from the eventual acceptance of the buyer's offer, so that the error in the first instance did not affect the validity of the seller's acceptance. While some factual differences between the cases might have influenced their outcome, the discrepancy between the judgments seems to result from conflicting views regarding the allocation of risks for malfunctioning of commercial web sites."[231]

Both the German cases and the Singapore case clearly indicate that courts will treat errors determined by incorrect information [page 294] uploaded onto automated systems as an issue of contract formation (validity), which is a domestic law issue. What is not clear from the German cases is why the courts in all of the three instances concluded that there was a computer-based mistake when the information was uploaded by a third party presumably hired by the seller. Additionally, it is unclear how one can distinguish between the errors referred to in the German cases and those referred to in the Singapore case. In any event, the ECC does not deal with the issue of errors made by automated systems, which means that applicable domestic laws should decide the issue.[232]

Under the Convention, what happens when one is not dealing with an automated system, but with a person?[233] As with any case not falling with the scope of article 14(1), such as errors generated by an automated system itself, the otherwise applicable substantive law should determine the consequences of the error.[234]

In conclusion, with the exception of input errors, the Convention does not deal with validity issues in the context of errors.[235] However, the Convention expressly limits the ability to question the validity or enforceability of e-contracts on the sole ground that it occurred in the form of an electronic communication or solely through the interaction of automated systems.[236]

(10) Reservations and declarations

This topic has little to do with the Convention and its interaction with the CISG. It is included here as a side note concerning the use of the terms of "reservation" and declarations under the Convention.

The term "reservation," as used in ECC article 22,[237] squarely falls within the meaning of reservation as understood under the [page 295] Vienna Convention of the Law of Treaties of 1969,[238] but one can also argue that the "declarations" mentioned throughout the ECC are also "reservations."[239] According to article 2(d) of the Vienna Convention of the Law of Treaties, "'reservation' means a unilateral statement, however phrased or named, made by a State, when signing, ratifying, accepting, approving or acceding to a treaty, whereby it purports to exclude or to modify the legal effect of certain provisions of the treaty in their application to that State."[240] In this context, it becomes clear that what the ECC text refers to as a declaration is actually a reservation.[241] Technically,

"[t]he term 'declaration' is used for various international instruments. However, declarations are not always legally binding. The term is often deliberately chosen to indicate that the parties do not intend to create binding obligations but merely want to declare certain aspirations. ... Declarations can however also be treaties in the generic sense intended to be binding at international law. It is therefore necessary to establish in each individual case whether the parties intended to create binding obligations. Ascertaining the intention of the parties can often be a difficult task. Some instruments entitled 'declarations' were not originally intended to have binding force, but their provisions may have reflected customary international law or may have gained binding character as customary law at a later stage."[242]

With this note in mind, consider, for example, ECC article 19, which provides as follows:

"1. Any Contracting State may declare, in accordance with article 21, that it will apply this Convention only:

(a) When the States referred to in article 1, paragraph 1, are Contracting States to this Convention; or

(b) When the parties have agreed that it applies.

"2. Any Contracting State may exclude from the scope of application of this Convention the matters it specifies in a [page 296] declaration made in accordance with article 21."[243]

The declarations referred to in article 19 clearly are not merely an expression of aspiration to do or not do something, but rather represent a statement intended to limit the scope of the application of the Convention.[244] Thus, even though there are instances where declarations under the ECC might be easily understood to be reservations, international trade law agreements, including UNCITRAL texts, prefer using the term "declaration" to avoid certain technicalities connected with the use of "reservations" under treaty law.[245]

Declarations under articles 17(4), 19(1) to (2), 20(2) to (4) may be made at any time.[246] Declarations under articles 17(2) and 18(1) must be made at the time of signature, ratification, acceptance, or approval.[247] To be effective, "declarations made at the time of signature are subject to confirmation at the time of ratification, acceptance, or approval."[248] This approach is different from that of the CISG, whereby a CISG Contracting State, generally, may make a declaration "at the time of signature, ratification, acceptance, approval or accession."[249] The difference was due to the fact "in an area as rapidly evolving as the area of electronic commerce, in which technological developments rapidly changed existing patterns of business and trade practices, it was essential to afford States the flexibility required for the application of the draft convention."[250] Moreover, it was noted that "[a] rigid system of declarations ... might either deter States from joining the [page 297] Convention, or might prompt them to act in an overly cautious manner, thereby leading States to exclude automatically the application of the draft convention in various areas."[251] Finally, for purposes of determining when declarations take effect, article 21(3) provides two rules, depending on whether the declaration has been made prior or after the entry into force of the Convention.[252]

4. CONCLUSION

The Convention is a useful tool for purposes of solving issues involving the use of electronic communications in international transactions. When the CISG and ECC can be applied to the same dispute the ultimate effect would be exactly what the ECC drafters had in mind: set forth basic, uniform rules that would ultimately provide some degree of guidance when electronic communications are involved. [page 298]


FOOTNOTES

a1. Law Clerk to the Honorable William F. Morgan, President Judge, Warren-Forest Court of Common Pleas, Pennsylvania (U.S.A.). Dottore in Giurisprudenza, Università degli Studi di Napoli, "Federico II" (Italy); LL.M. in International & Comparative Law and J.D., University of Pittsburgh School of Law (U.S.A.). I would like to thank Luca G. Castellani and James Flannery for commenting on earlier drafts of these Notes.

1. G.A. Res. 60/21, U.N. Doc. A/Res/60/21, U.N. Sales No E.07.V.2 (Dec. 9, 2005), available at <http://www.uncitral.org/pdf/english/texts/electcom/06-57452_Ebook.pdf> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter ECC].

2. Apr. 11, 1980, S. Treaty Doc. No. 98-9, 1489 U.N.T.S. 3 (1984), available at <http://www.uncitral.org/pdf/english/texts/sales/cisg/CISG.pdf> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter CISG].

3. G.A. Res. 51/162, U.N. Doc A/Res/51/162 (Jan. 30, 1997), available at <http://www.uncitral.org/pdf/english/texts/electcom/05-89450_Ebook.pdf> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter UNCITRAL Model Law].

4. See ECC, supra note 1, 23-24.

5. See id. 25-26, 41.

6. UNCITRAL, Report of the United Nations Commission on International Trade Law on the Work of Its Thirty-eighth Session, 1, 166, G.A. Res. 21, U.N. GAOR, 60th Sess., Supp. No. 17, U.N. Doc. A/60/17 (July 26, 2005), available at <http://www.uncitral.org/uncitral/en/commission/sessions/38th.html> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/60/17]. For a detailed account of the history and other relevant information concerning the ECC visit, see the UNCITRAL website at <http://www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/2005Convention.html> (last visited May 19, 2007) (on file with the Rutgers Computer and Technology Law Journal).

7. See UNCITRAL, Legal Aspects of Electronic Commerce - Explanatory Note on the Convention on the Use of Electronic Communications in International Contracts, U.N. Doc. A/CN.9/608 (Mar. 17, 2006); see also id. addenda 1-4, at U.N. Doc. A/CN.9/608/Add.1 (Mar. 17, 2006) [hereinafter U.N. Doc. A/CN.9/608/Add.1]; U.N. Doc. A/CN.9/608/Add.2 (Mar. 22, 2006) [hereinafter U.N. Doc. A/CN.9/608/Add.2]; U.N. Doc. A/CN.9/608/Add.3 (Mar. 22, 2006) [hereinafter U.N. Doc. A/CN.9/608/Add.3]; U.N. Doc. A/CN.9/608/Add.4 (Mar. 22, 2006) [U.N. Doc. A/CN.9/608/Add.4]; U.N. Doc A/CN.9/608/Add.2 (Mar. 22, 2006); U.N. Doc A/CN.9/608/Add.3 (Mar. 22, 2006); U.N. Doc A/CN.9/608/Add.4 (Mar. 22, 2006), all available at <http://www.uncitral.org/uncitral/en/commission/sessions/39th.html> (on file with the Rutgers Computer and Technology Law Journal).

8. See Press Release, UNCITRAL, Gen. Assembly Adopts New Convention on Use of Electronic Commc'ns in Int'l Contracting, U.N. Doc. GA/10424 (Nov. 23, 2005), available at <http://www.un.org/News/Press/docs/2005/ga10424.doc.htm> (on file with the Rutgers Computer and Technology Law Journal).

9. See Press Release, U.N. Office of Legal Affairs, Legal Instruments on Int'l Contracts, Safety of U.N. Personnel, U.N. Doc. l/T/4395 (Jan. 12, 2006), available at <http://www.un.org/News/Press/docs/2006/lt4395.doc.htm> (on file with the Rutgers Computer and Technology Law Journal).

10. ECC, supra note 1, at art. 23(1).

11. Press Release, Signature Event to Promote Participation in New U.N. Convention on the Use of Electronic Commc'ns in Contract, U.N. Doc. UNIS/L/101 (June 13, 2006), available at https://www.unis.unvienna.org/unis/pressrels/2006/unisl101.html?email=yes (on file with the Rutgers Computer and Technology Law Journal). The webcast of the event is available at U.N. Convention on the Use of Electronic Communications in International Contracts, <http://www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/2005Convention.html> (last visited May 19, 2007) (on file with the Rutgers Computer and Technology Law Journal).

12. CISG, supra note 2, at art. 20(1).

13. See ECC, supra note 1, at art. 20(2).

14. See U.N. Doc. A/CN.9/608/Add.4, supra note 7, 47.

15. See UNCITRAL, Report of the Working Group on Electronic Commerce on the Work of Its Forty-fourth Session, 49, U.N. Doc. A/CN.9/571 (Nov. 8, 2004), available at <http://www.uncitral.org/uncitral/en/commission/sessions/38th.html> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/CN.9/571].

16. ECC, supra note 1, at art. 20(1) (listing the following conventions: the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the Convention on the Limitation Period in the International Sale of Goods, the CISG, the United Nations Convention on Independent Guarantees and Stand-by Letters of Credit, and the United Nations Convention on the Assignment of Receivables in International Trade). As to other conventions not listed in article 20(1), see id. at art. 20(2)-(3).

17. Id. at art. 9(1).

18. For more details on these principles, see Renaud Sorieul, Jennifer R. Clift, & José Angelo Estrella-Faria, Establishing a Legal Framework for Electronic Commerce: The Work of the United Nations Commission on International Trade Law (UNCITRAL), 35 Int'l L. 107 (2002).

19. See, e.g., UNCITRAL Model Law, supra note 3; Uniform Electronic Transactions Act (1999), available at http://www.law.upenn.edu/bll/archives/ulc/fnact99/1990s/ueta99.pdf (on file with the Rutgers Computer and Technology Law Journal) [hereinafter UETA]; the Uniform Computer Information Transactions Act, 7 U.L.A. 195 (2002), available at <http://www.law.upenn.edu/bll/ulc/ucita/2002final.pdf> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter UCITA]; Uniform Electronic Commerce Act, available at <http://www.ulcc.ca/en/us/index.cfm?sec=1&sub=1u1> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter UECA]; Electronic Transaction Act, 1998 (Sing.), available at <http://statutes.agc.gov.sg/non_version/cgi-bin/cgi_retrieve.pl?actno=REVED-88&doctitle=ELECTRONIC%20TRANSACTIONS%C20ACT%0a&date=latest&method=part&sl=1> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter SETA]; and Electronic Transactions Act of 1999 (Austl.), available at <http://www.comlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/0/BD93FE3F6F1AE66DCA2572BB00188F82/$file/ElectronicTrans1999.pdf> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter AETA]. As to work done by other international organizations in the area of electronic commerce, see UNCITRAL, Current Work by Other International Organizations in the Area of Electronic Commerce, U.N. Doc. A/CN.9/579 (May 9, 2005), available at <http://www.uncitral.org/uncitral/en/commission/sessions/38th.html> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/CN.9/579].

20. Franco Ferrari, Brief Remarks on the Conclusion of Contracts on the Internet and the United Nations Convention on Contracts for the International Sale of Goods (CISG), 5 The Eur. Legal F. 301 (2001) (text accompanying note 28). See also Herbert Bernstein & Joseph Lookofsky, Understanding The CISG In Europe: A Compact Guide to the 1980 United Nations Convention on Contracts for the International Sale of Goods 38 (2d ed. 2003).

21. See generally ECC, supra note 1, at pmbl.

22. See id.

23. See id. 47-49.

24. See id. 47.

25. See id. 50-52.

26. See U.N. Doc. A/CN.9/608/Add.1, supra note 7, 8.

27. See, e.g., UNCITRAL Model Law, supra note 3, at arts. 6 (writing), 7 (signature), 8 (original); UETA, supra note 19, 8 (provision of information in writing, presentation of records), 9 (attribution and effect of electronic record and electronic signature), 11 (notarization and acknowledgment), 12 (retention of electronic records, originals); UECA, supra note 19, 8 (providing information in writing), 9 (providing information in specific form), 10 (signatures), 11 (provision for originals), 12 (whether document is capable of being retained), 13 (retention of documents); SETA, supra note 19, at arts. 7 (requirements for writing), 8 (electronic signatures), 9 (retention of electronic records); AETA, supra note 19, 9 (writing), 10 (signature), 11 (production of a document).

28. See ECC, supra note 1, at art. 9, 2.

29. See U.N. Doc. A/CN.9/608/Add.2, supra note 7, 6.

30. See id. 1.

31. See Ugo Draetta, Internet e Commercio Elettronico nel Diritto Internazionale dei Privati (2005); Internet International Law (Georges Chatillon ed. 2005); José Angelo Estrella-Faria, The United Nations Convention on the Use of Electronic Communications in International Contracts - an Introductory Note, 55 Int'l & Comp. L. 689-94 (2006); Charles F. Martin, The UNCITRAL Electronic Contracts Convention: Will It Be Used or Avoided?, 17 Pace Int'l L. Rev. 261 (2005). See generally Luca G. Castellani, Contract Formation in the United Nations Convention on Contracts for the International Sale of Goods, 1980 (CISG) and the Role of Electronic Media, Arb. & Mediator, Apr. 2005, at 19 (discussing the role of electronic communications in the context of contract formation).

32. ECC, supra note 1, at art. 20(1).

33. See id. at art. 20(2).

34. Jun. 10, 1958, 330 U.N.T.S. 38.

35. See UNCITRAL, Report of the Working Group IV (Electronic Commerce) on the Work of Its Fortieth Session, 81, U.N. Doc. A/CN.9/527 (Nov. 7, 2002), available at <http://www.uncitral.org/uncitral/en/commission/sessions/36th.html> (the goal was to "develop a new instrument that offered practical solutions to issues related to the use of electronic means of communication for commercial contracting") (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/CN.9/527]. Although the ECC is not meant to set uniform rules for "substantive contractual issues that are not specifically related to the use of electronic communications... the draft convention contains a few substantive rules that extend beyond merely reaffirming the principle of functional equivalence where substantive rules are needed in order to ensure the effectiveness of electronic communications." UNCITRAL, Draft Convention on the Use of Electronic Communication in International Contracts, Addendum: Background Information, 25, U.N. Doc. A/CN.9/577/Add.1 (Nov. 17, 2004), available at <http://www.uncitral.org/uncitral/en/commission/sessions/38th.html> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/CN.9/577/Add.1].

36. See U.N. Doc. A/CN.9/608/Add.4, supra note 7, 39 (internal citations omitted).

37. See U.N. Doc. A/CN.9/527, supra note 35, 80-81.

38. The author interned with the UNCITRAL during the summer of 2005.

39. See U.N. Doc. A/CN.9/608/Add.1, supra note 7, 10.

40. Id. 11.

41. See ECC, supra note 1, at arts. 6, 8-11, 14.

42. See id. at art. 17.

43. See id.

44. See id. at art. 17(4). It should be noted that a declaration made by a REIO pursuant to ECC art. 21

"is distinct from, and without prejudice to, declarations by States under draft article [19], paragraph 2. If no such organization ratified the convention, their member States who wished to do so would still have the right to include, among the other declarations that they might wish to make, a declaration of the type contemplated in the new paragraph 4 of the draft article in view of the broad scope of draft article[19], paragraph 2. It was understood that if a State did not make such a declaration, paragraph 4 of the draft article would not automatically apply." U.N. Doc. A/60/17, supra note 6, 122.

45. See UNCITRAL, Draft Convention on the Use of Electronic Communications in International Contracts, art. 16, U.N. Doc. A/CN.9/577 (Nov. 24, 2004), available at <http://www.uncitral.org/uncitral/en/commission/sessions/38th.html> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/CN.9/577].

46. See U.N. Doc. A/60/17, supra note 6, 111-122.

47. See UNCITRAL, Draft Convention on the Use of Electronic Communications in International Contracts - Compilation of Comments by Governments and International Organizations, U.N. Doc. A/CN.9/578/Add.5 (Apr. 18, 2005), available at <http://www.uncitral.org/uncitral/en/commission/sessions/38th.html> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/CN.9/578/Add.5].

48. See U.N. Doc. A/60/17, supra note 6, 122. It should be noted that this topic was also hotly debated within the Commission. The best source for understanding the history behind the provision is the Explanatory Note. See U.N. Doc. A/CN.9/608, supra note 7.

49. Id. 119.

50. See U.N. Doc. A/CN.9/608/Add.4, supra note 7, 18.

51. See CISG, supra note 2, at art. 1.

52. See ECC, supra note 1, at art. 1.

53. U.N. Doc. A/CN.9/608, supra note 7, 5. For a definition of "electronic communication," see ECC, supra note 1, at art. 4(b).

54. U.N. Doc. A/CN.9/608, supra note 7, 5.

55. U.N. Doc. A/CN.9/608/Add.1, supra note 7, 12-13.

56. Id. 13.

57. Id. (using export licenses as an example).

58. U.N. Doc. A/CN.9/608, supra note 7, 5.

59. Id. 7.   For a list of excluded transactions, see ECC art. 2; see also U.N. Doc. A/CN.9/577/Add. 1, supra note 35, 36-37. It should be also noted that the exclusion concerning personal, family or household purposes under the ECC is absolute, as opposed to CISG article 2(a). See id. 33-35.

60. See CISG, supra note 2, at art. 1.

61. See U.N. Doc. A/CN.9/577/Add. 1, supra note 35, 31.

62. ECC, supra note 1, at art. 19; see also id. at art. 1; cf. CISG, supra note 2, at art. 1.

63. See U.N. Doc. A/CN.9/608/Add.4, supra note 7, 28(a).

64. Id. 28(b).

65. Id.

66. Id.

67. Id.

68. Id. 28(c).

69. See CISG, supra note 2, at art. 1.

70. See id. at art. 10.

71. See ECC, supra note 1, at art. 6; cf. UNCITRAL Model Law, supra note 3, at art. 15(4); UETA, supra note 19, 15; UECA, supra note 19, 23(3)-(4); SETA, supra note 19, at art. 13; AETA, supra note 19, 14(5), (6).

72. CISG, supra note 2, at art. 1.

73. For purposes of the CISG, a German Court of Appeals defined the "place of business" as "the place from which a business activity is de facto carried out... this requires a certain duration and stability as well as a certain amount of autonomy." See Oberlandesgericht [Court of Appeals] Stuttgart, Feb. 28, 2000, 5 U 118/99 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/000228g1.html> (on file with the Rutgers Computer and Technology Law Journal).

74. See U.N Doc. A/CN.9/527, supra note 35, 122.

"The view was expressed that the desirability of a definition of place of business should be carefully considered by the Working Group at a later stage in view of the fact that such a definition was not made in the United Nations Sales Convention, which left the matter to domestic law. The Working Group was reminded of the risk of establishing a duality regime for contracts negotiated through electronic means and other contracts." Id.

75. ECC, supra note 1, at art. 4(h).

76. For a discussion of the relevance of the place of business in the context of the issue of the time and place of dispatch and receipt of an electronic communication, see infra notes 117-153 and accompanying text.

77. See ECC, supra, note 1, 110.

78. See id. 110-121.   For purposes of the CISG, the concept of "place of business" comes up under other several provisions, in addition to article 1(1)(a). See, e.g., CISG, supra note 2, at arts. 10, 12, 20(2), 24, 31(c), 42(1)(b). Recall that, for purposes of the application of both the CISG and the ECC, the parties must somehow be aware that the other party's place of business is located in a different State. See id. at art. 1(2); ECC, supra note 1, at art. 1(2).

79. As to the meaning of "closest relationship to the contract and its performance" under CISG article 10 see Jarzi Rajski, Commentary on the International Sales Law 115-120 (Massimo C. Bianca & Michael Joachim Bonell eds., 1987).

80. See ECC, supra note 1, at art. 6(3) ("if a natural person does not have a place of business, reference is to be made to the person's habitual residence."). While CISG article 10(b) refers simply to a "party," ECC article 6(3) refers to "natural person" because "it is generally understood that only natural persons are capable of having a 'habitual residence."' See id. 115.

81. Id. at art. 6(4).

82. Id. at art. 10(4).

83. Ferrari, supra note 20, at 301.

84. Id. at 301-302.

85. ECC, supra note 1, at art. 1(2); CISG, supra note 2, at art. 1(2). The language in both clauses is identical except for punctuation.

86. ECC, supra note 1, at art. 6(5).

87. See U.N. Doc. A/CN.9/577/Add.1, supra note 35, 40 (citing U.N Doc. A/CN.9/571, supra note 14).

88. Compare UNCITRAL Model Law, supra note 3, at arts. 4, 9, 11; UETA, supra note 19, 5, 15; UECA, supra note 19, 5, 6; SETA, supra note 19, at arts. 5, 11; AETA, supra note 19, 8.

89. CISG, supra note 2, at art. 6.

90. Id. at art. 11.

91. Id. at art. 13.

92. ECC, supra note 1, at art. 3.

93. Id. at art. 8.

94. Id. at art. 9.

95. See CISG, supra note 2, 15.   Contracting States may legislate a writing requirement. See id. at art. 96.

96. See id. at arts. 6, 12. Article 12 basically provides that if a state legislates a writing requirement any sections of the CISG that allow alternate forms do not apply. See id. at art. 12. As to the opportunity for the parties to opt out or vary the effect of the ECC's provisions, the text of ECC article 3 is similar to that of the CISG.

97. Id. at art. 13.

98. See supra notes 94-96 and accompanying text.

99. See Christina Ramberg, CISG-AC, Opinion No. 1: Electronic Communications Under CISG, 15 Pace Int'l L. Rev. 453, 456 (2003); see also Ferrari, supra note 20.

100. See CISG, supra note 2, at art. 7(2) ("Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law.").

101. See ECC, supra note 1, at art. 3.

102. U.N. Doc. A/CN.9/577/Add.1, supra note 35, 48 (citing U.N. Doc. A/CN.9/527, supra note 35, 108); see also U.N. Doc. A/CN.9/608/Add.2, supra note 7, 14.

103. See ECC, supra note 1, at art. 3.

104. Id. at art. 8; UETA, supra note 19, 7; UNCITRAL Model Law, supra note 3, at arts. 5, 11; SETA, supra note 19, at arts. 6, 11, 12; AETA, supra note 19, 8(1); UECA, supra note 19, 5.

105. See, e.g., ECC, supra note 1, at arts. 4, 8 and 9; UNCITRAL Model Law, supra note 3, at arts. 6, 7, 8; see also supra notes 18-19, 27 and accompanying text.

106. See ECC, supra note 1, at arts. 6-8.

107. ECC, supra note 1, at art. 9(2); cf. UNCITRAL Model Law, supra note 3, at art. 6; SETA, supra note 19, at art. 7; AETA, supra note 19, 9(1)(a); UECA, supra note 19, 8. The quoted phrase is identical in these sources. See also Ramberg, supra note 99, at 456, cmt. 13.1; UETA, supra note 19, 8.

108. See U.N. Doc. A/CN.9/608/Add.2, supra note 7, 18.

109. See ECC, supra note 1, at art. 9(2).

110. Id. at art. 9(3); see also SETA, supra note 19, at arts. 17-18. Compare UETA, supra note 19, 7; UNCITRAL Model Law, supra note 3, at art. 7; SETA, supra note 19, at art. 8; AETA, supra note 19, 10; UECA, supra note 19, 10.

111. See U.N. Doc. A/CN.9/608/Add.2, supra note 7, 34-36.

112. See id.

113. See id. 34.

114. These provisions were specifically included to make sure that the ECC would be compatible with the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). See U.N Doc. A/CN.9/571, supra note 15, 130. Cf. UETA, supra note 19, 12; UNCITRAL Model Law, supra note 3, at art. 8; SETA, supra note 19, at art. 9; AETA, supra note 19, 11-12; UECA, supra note 19, 11.

115. ECC, supra note 1, at art. 9(4).

116. See U.N. Doc. A/CN.9/608/Add.2, supra note 7, 40.

117. Cf. UETA, supra note 19, 15; UNCITRAL Model Law, supra note 3, at art. 15; SETA, supra note 19, at arts. 13, 15; AETA, supra note 19 14.

118. See CISG, supra note 2, at art. 15 (selected sections).

119. See id. at art. 18(2).

120. See id. at art. 24.

121. See ECC, supra note 1, at art. 10 (selected sections).

122. See CISG, supra note 2, at arts. 14-15.

123. See id. at art. 24.

124. Id.

125. See id. at arts. 18, 20.

126. Id. at arts. 15(1), 18(2).

127. Id. at art. 27.

128. See generally Henry Deeb Gabriel, Draft UNCITRAL Digest, in The Draft Uncitral Digest and Beyond: Cases, Analysis, and Unresolved Issues in the U.N. Sales Convention 340 (Franco Ferrari, Harry M. Flechtner & Ronald A. Brand eds., 2004).

129. See CISG, supra note 2, at art. 32.

130. See id. at art. 43.

131. See id. at art. 46.

132. See id. at art. 50.

133. See id. at art. 45.

134. See id. at art. 47.

135. See id. at art. 49.

136. See id. at art. 67.

137. See id. at art. 88.

138. See id. at art. 80; see also Gabriel, supra note 128.

139. See CISG, supra note 2, at arts. 47(2), 48(4), 63(2), 65(1)-(2), 79(4).

140. See generally Gabriel, supra note 128.

141. See, e.g., CISG, supra note 2, at art. 20(1).

142. Id.

143. But see supra note 35 and accompanying text.

144. See U.N. Doc. A/CN.9/577/Add.1, supra note 35, 49.

145. See ECC, supra note 1, at art. 10(2).

146. Id. This presumption is not present in the UNCITRAL Model Law, supra note 3, "which focuses on timing and defers to national law on whether data messages need to meet other requirements (such as 'processability') in order to be deemed to have been received." See U.N. Doc. A/CN.9/577/Add.1, supra note 35, 51.

147. See U.N. A/CN.9/608/Add. 2, supra note 7, 56.

148. See ECC, supra note 1, at art. 10(2).

149. See UNCITRAL Model Law, supra note 3, at art. 15, 102.

150. ECC, supra note 1, at art. 10(2). Compare UNCITRAL Model Law, supra note 3, at art. 15(2), 10(2); SETA, supra note 19, at art. 15(2); AETA, supra note 19, 14(3)-(4); UECA, supra note 19, 23.

151. See ECC, supra note 1, at art. 10(2).

152. See id.

153. See U.N. Doc. A/CN.9/608/Add.2, supra note 7, 61-62.

154. CISG, supra note 2, at art. 15(2).

155. Id. at art. 16(1).

156. Id. at art. 17.

157. ECC, supra note 1, at art. 10(2).

158. See U.N. Doc. A/CN.9/608/Add.2, supra note 7, 55.

159. Id.

160. See id. 49.

161. Id. 66.

162. See ECC, supra note 1, at art. 10(3).

163. U.N. Doc. A/CN.9/608/Add.2, supra note 7, 66.

164. Id.

165. CISG, supra note 2, at art. 1(1b). However, "[a]ny State may declare at the time of the deposit of its instrument of ratification, acceptance, approval or accession that it will not be bound by subparagraph (1)(b) of article 1 of this Convention." See id. at art. 95. Among other Contracting States, the United States made an article 95 reservation. UNCITRAL, Status: 1980 U.N. Convention on CISG, <http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISGstatus.html> (last visited May 19, 2007) (on file with the Rutgers Computer and Technology Law Journal).

166. CISG, supra note 2 at art. 23.

167. Id. at art. 18(2)-(3).

168. See E. Allan Farnsworth, Article 23, in Commentary on the International Sales Law 198, 198-200 (Cesare Massimo Bianca & Joachim Bonell eds. 1987), available at <http://www.cisg.law.pace.edu/cisg/biblio/farnsworth-bb23.html> (on file with the Rutgers Computer and Technology Law Journal).

169. See Guide to CISG Article 23, Secretariat Commentary at <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-23.html> (last updated Aug. 29, 2006) (on file with the Rutgers Computer and Technology Law Journal) [hereinafter Guide to Art. 23].

170. Id; see, e.g., E-Commerce Law in Europe and the USA 320-321 (Gerald Spindler & Fritjof Börner eds., 2002) (describing Article 1335 of the Italian Civil Code); Roder v. Rosedown (1995) Fed. Ct. South Australian District, FED No. 275/95, available at <http://cisgw3.law.pace.edu/cisg/wais/db/cases2/950428a2.html> (on file with the Rutgers Computer and Technology Law Journal). Other legal systems, however, have a different approach. See, e.g., Dmitri Anatolievich Shemelin, On Formation of Contracts for the International Sale of Goods under Ukrainian legislation, at <http://25.cisg.info/content/publikation.php?id=7> (last visited May 19, 2007) ("The Civil Code (art. 647) establishes, that place of contract conclusion is the offeror's place of business, unless otherwise provided by the contract.") (on file with the Rutgers Computer and Technology Law Journal).

171. Guide to Art. 23, supra note 169; see also supra note 170 and accompanying text.

172. ECC, supra note 1, at art. 10(3).

173. Id. at art. 10(4).

174. See id. at art. 4(f). The term "information system" means "a system for generating, sending, receiving, storing or otherwise processing data messages." Id.

175. See id. at art. 10(2).

176. See supra notes 169-171 and accompanying text.

177. See ECC, supra note 1 at art. 10. For a definition of "originator," see id. at art. 4(d).

178. See id. at art. 10(4).

179. Compare UETA, supra note 19, 14; SETA, supra note 19, at art. 14.

180. See CISG, supra note 2, at art. 1.

181. See ECC, supra note 1, at art. 12.

182. See supra notes 23-30 and accompanying text.

183. See ECC, supra note 1, at art. 12.

184. See id.

185. See id. at art. 11.

186. See UNCITRAL, Report of the Working Group on Electronic Commerce on the Work of Its Forty-second Session, 107, U.N. Doc. A/CN.9/546, (Dec. 8, 2003), available at <http://www.uncitral.org/uncitral/en/commission/working_ groups/4Electronic_Commerce.html#42> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/CN.9/546].

187. See ECC, supra note 1, at art. 11; cf. UECA, supra note 19, 21; UCITA, supra note 19, 202(a).

188. See ECC, supra note 1, 211-213.

189. See U.N. Doc. A/CN.9/608/Add.3, supra note 7, 17.

190. See supra notes 169-171 and accompanying text.

191. See, e.g., Harry M. Flechtner, More U.S. Decisions on the U.N. Sales Convention: Scope, Parol Evidence, "Validity" and Reduction of Price Under Article 50, 14 J.L. & Com. 153 (1995); Patrick C. Leyens, CISG and Mistake: Uniform Law vs. Domestic Law, The Interpretative Challenge of Mistake and the Validity Loophole (Oct. 2003), <http://cisgw3.law.pace.edu/cisg/biblio/leyens.html> (on file with the Rutgers Computer and Technology Law Journal); Warren Khoo, Article 4, in Commentary on the International Sales Law, supra note 79, at 44-48.

192. CISG, supra note 2, at art. 4.

193. See id. 11; see generally Leyens, supra note 191.

194. Franco Ferrari, Scope of Application: Articles 4-5, in The Draft UNCITRAL Digest and Beyond: Cases, Analysis and Unresolved Issues in the U.N. Sales Convention, supra note 128, at 96, 98.

195. Id.; see also Harry M. Flechtner, Transcript of a Workshop on the Sales Convention: Leading CISG Scholars Discuss Contract Formation, Validity, Excuse for Hardship, Avoidance, Nachfrist, Contract Interpretation, Parol Evidence, Analogical Application, and Much More, 18 J.L. & Com. 191, 241 (1999).

196. The significant number of other approaches and conclusions are beyond the limited scope of these notes.

197. See Ferrari, supra note 194, at 97-98.

198. Compare UETA, supra note 19, 10; SETA, supra note 19, at art. 13; UECA, supra note 19, 22.

199. UNCITRAL, Report of the Working Group on Electronic Commerce on the Work of Its Forty-third Session, 19, U.N. Doc. A/CN.9/548 (Apr. 1, 2004) available at <http://www.uncitral.org/uncitral/en/commission/working_ groups/4Electronic_Commerce.html> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/CN.9/548].

200. See id. 25.

201. See id. 17.

202. ECC, supra note 1, at art. 14.

203. See U.N Doc. A/CN.9/571, supra note 15, 190 ("errors relating to [an individual] inputting wrong data in communications exchanged with an automated message system."). An example is a keystroke error. Id.

204. See ECC, supra note 1, at art. 14(1).

205. See id.

206. See id.

207. See id.

208. See id.

209. U.N. Doc. A/CN.9/608/Add.3, supra note 7, 43 (emphasis added).

210. Id.

211. See id. 44-45.

212. See id. 46.

213. [2004] 2 SLR 594; [2004] SGHC 71 (High Ct. Sing., Apr. 12, 2004), available at <http://www.singaporelaw.sg/rss/judg/30117.html> (on file with the Rutgers Computer and Technology Law Journal).

214. Id. 1.

215. See id. 10.

216. See id. 1.

217. See id. 75.

218. Id.

219. See id. 140.

220. See id. 92.

221. See id. 99-100.

222. See id.

223. See id. 99.

224. Id. 102.

225. Id. 134.

226. Id. 144.

227. Id. 149.

228. The three German cases were discussed in UNCITRAL, Legal Aspects of Electronic Commerce, Electronic Contracting: Background Information, 12, 13, U.N. Doc. A/CN.9/WG.IV/WP.104/Add.4 (Sept. 16, 2003), available at <http://www.uncitral.org/uncitral/en/commission/working_groups/4Electronic_ Commerce.html> (on file with the Rutgers Computer and Technology Law Journal) [hereinafter U.N. Doc. A/CN.9/WG.IV/WP.104/Add.4]. The three cases are: Oberlandesgerichts in Zivilsenatschen [OLG] Frankfurt [Civil Appellate Court], Nov. 20, 2002, Case No. 9 U 94/02 (F.R.G.) available at <http://www.jurpc.de/rechtspr/20030091.pdf> (on file with the Rutgers Computer and Technology Law Journal); Landgericht [LG] Köln [Regional trial court], Apr. 16, 2003, Case No. 9 S 289/02 (F.R.G.) available at <http://www.jurpc.de/rechtspr/20030138.htm> (on file with the Rutgers Computer and Technology Law Journal); Amtsgericht Westerburg [District Court], Mar. 14, 2003, Case No. 21 C 26/03 (F.R.G.), available at <http://www.jurpc.de/rechtspr/20030184.htm> (on file with the Rutgers Computer and Technology Law Journal). The analysis of these cases is based on the fine text of the Working Group's notes.

229. U.N. Doc. A/CN.9/WG.IV/WP.104/Add.4, supra note 228, 12.

230. Id. Compare Corinthian Pharm. Sys. v. Lederle Lab., in which the court found that

[t]he record is clear that Lederle did not communicate or do any act prior to shipping the 50 vials that could support the finding of an acceptance. When Corinthian placed its order, it merely received a tracking number from the Telgo computer. Such an automated, ministerial act cannot constitute an acceptance. See, e.g., Foremost Pro Color, Inc. v. Eastman Kodak Co., 703 F.2d 534, 539 (9th Cir. 1983) (logging purchase orders as received did not manifest acceptance); Southern Spindle & Flyer Co. v. Milliken & Co., 53 N.C. App. 785, 281 S.E.2d 734, 736 (1981) (seller's acknowledgement of receipt of purchase order did not constitute assent to its terms). Thus, there was no acceptance of Corinthian's offer prior to the deliver of 50 vials. 724 F. Supp. 605, 610 (D. Ind. 1989).

231. See U.N. Doc. A/CN.9/WG.IV/WP.104/Add.4, supra note 228, 13 (internal citations omitted).

232. See generally ECC, supra note 1, at arts. 12, 14.

233. See U.N. Doc. A/CN.9/548, supra note 19, 22.

234. See U.N. Doc. A/CN.9/577/Add.1, supra note 35, 46; ECC, supra note 1, at art. 14(2).

235. See U.N. Doc. A/CN.9/577/Add.1, supra note 35, 46.

236. Id.

237. ECC, supra note 1, at art. 22 ("No reservations may be made under this Convention.").

238. May 23, 1969, 115 U.N.T.S. 331, 8 I.L.M. 679, U.N. Doc. A/ Conf.39/27 [hereinafter VCLT].

239. See ECC, supra note 1, at arts. 17, 19-21.

240. VCLT, supra note 238, at art. 2(d).

241. See ECC, supra note 1, at arts. 17, 19-21.

242. See United Nations Treaty Reference Guide, <http://untreaty.un.org/English/guide.asp#declarations> (last visited May 19, 2007) (on file with the Rutgers Computer and Technology Law Journal).

243. ECC, supra note 1, at art. 19.

244. See id.

245. See U.N. Doc. A/CN.9/571, supra note 15, 30 ("The reason for that view was that declarations would not trigger a formal system of acceptances and objections, which was typical for reservations to international treaties, for instance as provided in articles 20 and 21 of the Vienna Convention on the Law of Treaties, of 1969. Moreover, declarations supported the goal of flexibility that was crucial in areas in which practice was still developing, such as electronic commerce."); cf. VCLT, supra note 238, at arts. 19-23.

246. See ECC, supra note 1, at arts. 17, 19-20.

247. See id. at arts. 17-18.

248. See id. at art. 21.

249. CISG, supra note 2, at arts. 93, 97.

250. See U.N. Doc. A/CN.9/571, supra note 15, 32.

251. Id.

252. See ECC, supra note 1, at art. 21(3); U.N. A/CN.9/608/Add.4, supra note 7, 58-59.


Pace Law School Institute of International Commercial Law - Last updated December 20, 2007
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