In 1995, the United Nations Commission on Trade Law (UNCITRAL) developed a model law “On the Legal Aspects of Electronic Data Interchange.” This document allowed countries to independently consolidate in their national legislation all the provisions necessary for the regulation of e-commerce. It provided equal legal status and significance for documents, whether they are in paper form or in electronic form.
The state includes the procedures established by the ETO Act on national legislation in order to establish the commercial relations necessary for regulating the use of any electronic means of data transmission.
UNCITRAL Model Law for Electronic Commerce
This document has become the next step in the formation of a legal base for all commercial processes occurring on the network. Works on the same principle as the previous one – it is a model of a legislative document in the area of electronic commerce. This document has given a serious push to the development of e-commerce since it has created a solid base for its legal regulation. It contains clear definitions of the underlying concepts for the legislative process in this area.
This law has given legal and probative force to all commercial transactions on the Internet. This law is based on the principle of functional equivalence. This means that if the national law prescribes that the conclusion of transactions, by means of electronic documents or communications, is in compliance with the provisions of the law, in a legal sense, it does not differ from the transactions carried out in writing.
Legal regulation of e-commerce
As stated above, each individual country’s e-commerce, in one way or another, obeys the same laws and regulations at the legislative level. However, there are international organizations that are involved in regulating and shaping the legislative framework for electronic economic processes. They create their own newsletters with a list of all updates and innovations in the legislative framework. Here is a short list of organizations, on whose official resources, you can find all the documents and even get legal help:
- United Nations – United Nations
- WIPO – World Intellectual Property Organization
- WTO – World Trade Organization
- ICC – International Chamber of Commerce
- UNCTAD – United Nations Conference on Trade and Development
- OECD – Organization for Economic Cooperation and Development
Official representations of these organizations can offer examples of model laws and directives underlying the regulation of international commercial processes and transactions, as well as legal recommendations on e-commerce.
One of the important international documents regulating business processes in the network is the set of rules on e-commerce – “E-Terms 2004”. It was developed by the International Chamber of Commerce. Its action is very specific. It applies only to contracts of B2B type.
In essence, this is also a set of standard terms and conditions for two or more business spheres who enter into contracts in electronic form. It is distinguished from previous documents with a special attention to the issue of confidentiality.
It is worth noting, that a unified international legal instrument that could successfully regulate all the issues relating to e-commerce at the same time did not exist until now.
Electronic signature legal issues
The legal significance (force) of an electronic document (as well as a physical one) is given by the following conditions:
- the presence of mandatory requisites in the document and observance of the rules for displaying these details;
- the competence of the source, that is, the author’s right to create and sign documents of this kind, a
- the guarantee of integrity and authenticity.
An electronic signature as an electronic document requisition solves the task of guaranteeing the integrity, authenticity of the document and the authorship of the signature of the electronic document.
Electronic signing of documents can be embedded in the system of electronic circulation of documents or signing can be done in a special software application – this does not affect the legal significance of the document. That is, if the e-signature is not embedded in the web-based workflow solution system, then this does not mean that the document will not be legally significant.
Digital Signature in PDF
In spite of widespread use of electronic documents, paper is used to a large extent when it is required to ensure legal certainty, proof of authorship and irreproachability. An electronic digital signature is recognized as an analog of a handwritten signature in an electronic document circulation. The most developed direction for applying e-signature can be considered the systems of tax reporting, and with it – reporting to any government agency. But the use of e-signature is not limited to Tax and Medical forms.
We recently wrote a piece on signing letters of intent on National Signing Day. Individuals and legal entities are actively using a digital signature when working with my bank accounts and working with the stock exchange. In recent years, the use of electronic documents signed by digital signatures has grown dramatically in the course of work on trading floors, in both commercial and governmental procurement. On June 30, 2000, Congress passed a federal law called the eSign Act, or the Electronic Signatures in GLOBAL AND NATIONAL COMMERCE ACT that promotes the use of electronic documents and electronic signatures in the intergovernmental trade by ensuring the legal validity of electronic contracts.
Why the US Should Adopt UETA
The Uniform Electronic Transactions Act (UETA) allows the use of electronic records and electronic signatures in any transaction. The fundamental purpose is to harmonize state laws concerning retention of paper records (especially checks) and the validity of electronic signatures while removing perceived barriers to electronic commerce.
There are many reasons why every state should adopt the Uniform Electronic Transactions Act:
- UETA defines and validates electronic signatures. An electronic signature is defined as “an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.”
- UETA removes writing and signature requirements which create barriers to electronic transactions
- UETA ensures that contracts and transactions are not denied enforcement because electronic media are used
- UETA ensures that courts accept electronic records into evidence
- UETA authorizes state governmental entities to create, communicate, receive and store records electronically and encourages state governmental entities to move to electronic media
UETA establishes the legal equivalence of electronic records and signatures with paper writings and manually-signed signatures, removing barriers to electronic commerce. It was endorsed and approved by the American Bar Association, supported by the American Council of Life Insurance and Equipment Leasing Association of America.
An electronic digital signature within the framework of office-work is already used for the needs of intra-corporate and inter-community electronic document management. With its help sign agreements and acts, letters and invoices, applications and requirements. After the electronic forms of invoices are prepared, all the accounting work can be translated into an electronic version. Adopting UETA will allow the same for the international e-commerce and trade.