Guide to the Electronic Commerce Act, 2000

Guide to the Electronic Commerce Act, 2000

The E-Commerce Act 2000 which has been heralded as one of the most IT industry-friendly pieces of legislation world-wide became law on July 10th when the President signed the legislation into the Statute Book.

Before this Act was promulgated many people believed that the uncertainty emanating from the Law’s inability to cover new technology could stifle e-commerce development. At a European level, few countries have legislation in place which will clarify uncertain laws in the light of developing communications technology. With the e-commerce market predicted to be worth many billions of dollars, the importance of clarifying the uncertainty in the existing law has become a race by many countries seeking to tap the potential of the IT Industry.

The Irish Act, which is among the first pieces of legislation of its kind world-wide, (the first was Singapore’s Electronic Communications Act) in many respects seeks to capitalise on Ireland’s early moves in implementing legislation, in the hope that Ireland will be seen as the “E-commerce Hub of Europe”. The Act has implemented the EU Directive on Electronic Signatures twelve months in advance of the deadline set by the European Commission and has also incorporated provisions from the Draft EU Directive on E-Commerce, and the United Nations Commission on International Trade Law (UNCITRAL) Model Law on E-Commerce.

The Irish Act will have far reaching repercussions for those who wish to conduct business electronically but were heretofore scuppered in their efforts, primarily by the belief that e-communications could not be regarded on the same terms as physical (i.e. written etc.) communications. The Act seeks to remove such fears by legally placing e-documents on the same footing as physical documents.

In effect the Act provides the following Major changes to existing law:

• Ability of E-Communications to Communicate Agreement
• The uncertainty regarding the ability of e-communications (email and internet communications such as web pages) to host the terms of a contract have been removed. Electronic communications are now regarded as equally capable as non-electronic communications of communicating the concept of agreement.

When are E-Contracts Formed?

The uncertainty regarding the timing of contracts made electronically has been clarified.

Obligations as to Signatures and Witnessing Signatures
Obligations in any rules or laws that a person sign a document may now in certain circumstances be satisfied if the individual signs the document with an electronic signature. If a signature to a document is to be witnessed according to any rule, then in certain circumstances the electronic signature of a witness will satisfy this requirement.

Obligations to Seal Documents

If by law or otherwise a seal is required to be affixed to a document, then that requirement will be met if the document indicates that it is required to be under seal and it includes the electronic signature of the entity obliged to seal.

Obligations to Archive & Present Documents
Many legal provisions oblige entities to keep certain information archived for a number of years. Failure to comply with such provisions is generally an offence. The Act now purports to introduce a rule whereby if the information is kept in electronic format as opposed to manual format the requirements to archive may in certain circumstances be met.

The Act also provides that electronic originals can be used to meet any legal requirement to present or retain information in its original form. It has been said that it is important for electronic  commerce to deal with the issue of originals since many disputes relate to the question of originality of documents.

Any obligation on a person to give information in writing in any rule or law may now be satisfied if the information is furnished in electronic format: e.g.  Under the Freedom of Information Act certain public bodies are obliged to disclose certain information upon request, this obligation will be satisfied if the information is delivered in electronic form (provided it is reasonable to expect the addressee to be able to access it).

Legal Effect and Validity

Importantly electronic contracts will now not be denied legal effect and validity or enforceability solely on the grounds that it is wholly or partly in electronic form.

Evidence

In any legal proceedings nothing in the application of the rules of evidence shall apply so as to deny the admissibility in evidence of e-documents.
PLEASE NOTE The Act expands on each of these changes and introduces certain conditions and obligations before e-communications will be regarded as on a par with non-electronic documents. The circumstances of each case will have to examined to see if the Act applies.

What are E-Signatures?

The references to E-signatures throughout the Act contemplate the promotion and use of e-signature software and hardware which is quite common-place in the IT industry. There are numerous methods by which documents are signed electronically. The most common method by which documents are signed is by the use of a specialised computer program (which is either incorporated on a ROM chip in a separate hardware device, or loaded into a computer’s memory by using e.g. a CD ROM) which encrypts the document using a mathematical algorithm. The software at the same time generates a “key” which enables the addressee verify the integrity and authenticity of the document.

There are numerous types of “key” encryption technology. The most common and most promoted type encryption technology is “Private – Key Encryption”.  In this type of signing technology the software encodes the document using a “private key”. To read the message a “public key” will be needed. But as the name suggests this public key is public knowledge (i.e. it will be contained in most e-mail programs such as Microsoft Outlook) and any addressee can access the message. The importance of the “private key” is that only the author can create, amend or send the message, and hence the authenticity of the message is assured. In effect e-signatures are more effective than hand-written signatures for ensuring the authenticity of documents.

The Act provides for numerous matters relating to Commercial entities who produce e-signature products whom are called “Certification Service Provider’s”. As part of their service many provide a system whereby  they can certify that the signatory using their product is actually the person he identifies himself as. (An example CSP is "Baltimore Technologies" based in Dublin.)

The Act provides for the accreditation and supervision of certification service providers. The Act provides that certification services are not the subject of any prior governmental authorisation (i.e. certification service providers are free to set up business and offer their services without being subject to any licensing or authorisation requirements.)

However, The Act gives the Minister for Public Enterprise the right to introduce voluntary accreditation schemes and also obliges the Minister to ensure the establishment of an appropriate system which allows the supervision of certification service providers which issue qualified certificates to the public.

Exclusions from the legislation

At present the following are excluded from the scope of the legislation.

(a)  wills, codicils, trusts, enduring powers of attorney,
(b)  the law governing the manner in which an interest in real property may be created, acquired, disposed of or registered OTHER THAN contracts for the creation, acquisition or disposal of such interests.
(c)  The law governing the making of an affidavit or a statutory or sworn declaration
(d)  The rules practices or procedures of a court or tribunal.

But where the Minister is of the opinion that technology has advanced to such an extent and adequate procedures and practices have developed in public registration or other services. The Minister may make regulations bringing any of the above into play.

Domain Names

At present the allocation of “.ie” domain names is the sole responsibility of the Irish Domain Registry. Under the Act the Minister has the power of placing the responsibility for the allocation of “.ie” domain names on a statutory footing.

The allocation of .com, .org, and .net are not the responsibility of any Irish entity as these are world-wide Top Level Domains and hence cannot be regulated by Irish Law.

Conclusion & Further Details

The foregoing is a brief highlight of the main changes which the Electronic Commerce Act has made to the law. Obviously the Act is far more detailed and contains many more important terms ranging from e.g. detailed provisions concerning contract formation electronically to liability of certification service providers.

This document is not intended as legal advice but rather serves an information function, raising awareness of the new changes to the law.