Electronic Communications Convention- Impact on common law jurisdictions 2008

X. Automated Message Systems

[50] The use of electronic agents in the formation of contracts in the electronic environment is pervasive. The Convention uses the term “automated message system” to mean computer programs or other automated means used to initiate an action or respond to data messages, without review by a natural person each time an action is initiated or a response is generated.[63]  The UECA uses the equivalent term “electronic agent”.[64] Automated message systems act within pre-set parameters but lack human input at the vital moment of contract formation. The Convention upholds the validity of contracts formed by the interaction of an automated message system and a natural person, or by the interaction of automated message systems.[65]  The UECA and domestic electronic commerce legislation provide similar assurances,[66]as does the common law, which has long been adaptive to mechanical agents being able to bind parties to a contract.[67]

[51] The nature and extent of electronic communication, however, requires a rule to deal with mistakes made in the course of dealing with electronic agents, which have a limited ability to interact with a natural person. In circumstances where an automated message system does not provide a natural person with an opportunity to correct an error, and if that person notifies the other party of the error as soon as possible after learning of the error and has not used or received any material benefit from the goods or services received from the other party, the Convention allows the natural person (or the party on whose behalf that person was acting) to withdraw the portion of the electronic communication in which the error was made.[68]  A key aspect of the provision is the lack of an opportunity for the natural person to correct an error. A natural person who places an order over a commercial web site that provides repeated summaries of essential contract terms and requires confirmation before the order is placed would presumably not have the benefit of this rule.

[52] Article 14 provides a right to withdraw the portion of the electronic communication in which the error was made. In most cases, a withdrawal will make it possible to avoid the part of the transaction resulting from the error; if the error represents a significant component of the contract, such withdrawal may invalidate the whole contract.[69] Article 14.2 would also preserve the common law on mistake for situations not expressly covered by Article 14.1.

53] Article 14 applies to “input errors” with automated message systems. These errors typically result from unintentional keystrokes or clicking.[70] The UECA and domestic legislation contain a provision comparable to Article 14 of the Convention, except that the natural person must have made a material error, and the consequence is that the electronic document has no legal effect. Unlike the domestic legislation, there is room under the Convention to address an error but still preserve parts of the contract.

[54] As discussed earlier, consumer transactions are exempt from the application of the Convention. Article 14 could conceivably provide a degree of consumer protection for individuals who make input errors while contracting online with international entities. Section 51(a) of he Internet Sales Contract Harmonization Template provides a consumer with the right to cancel a contract where the consumer is not given an express opportunity to accept or decline the contract or to correct errors immediately before entering into it.[71] However, not all provinces and territories have adopted the Template.  Given that the purpose of the Convention is to facilitate electronic contracting between parties whose places of business are in different states, it would be inappropriate to add consumers to its sphere of application in order to remedy a domestic legislative deficiency.

Next Annual Meeting

2020 Annual Meeting

Place to be Announced

August 9 – 13, 2020