Current Uniform Acts
Electronic Commerce Act Annotated 1999
1999 Winnipeg, MB
Uniform Electronic Commerce Act
Part 1 - Provision and Retention of Information
Part 2 - Communication of Electronic Documents
Part 3 - Carriage of Goods
Legal relationships have long been based on paper documentation. Many rules of law are expressed in language that suits documents on paper. Over the past generation, however, paper has been giving way to computer-generated communications. In the past decade, networked computers and particularly the Internet have accelerated the replacement of paper and spread it into new domains, notably to consumer and domestic transactions.
The effect of these developments on the law is uncertain. To some extent the courts have come to terms with technology, to some extent people made contracts to provide standards for computer communications, and to some extent special legislation has clarified the rules. The Uniform Law Conference of Canada adopted its Uniform Electronic Evidence Act in 1998.
The benefits of efficiency and interactivity that flow from the expansion of electronic communications are reduced by persistent legal uncertainty, however. In particular, it is difficult to be sure that such communications will satisfy statutory rules that require writing, or signatures, or the use of original documents. Many legal relationships, especially contracts, depend on the intention of the parties. It has not been clear to what extent such intention can be communicated automatically, or by symbolic actions like clicking on an icon on a computer screen.
Numerous efforts have been devoted to resolving these uncertainties. The international standard in that direction has been the United Nations Model Law on Electronic Commerce, adopted by the General Assembly of the United Nations in November, 1996. (http://www.un.or.at/uncitral/english/texts/electcom/ml-ec.htm)The Model Law seeks to make the law "media neutral", i.e. equally applicable to paper-based and electronic communications. It does so by proposing "functional equivalents" to paper, i.e. methods to serve electronically the policy purposes behind the requirements to use paper. It does so in a "technology neutral" way, i.e. without specifying what technology one has to use to achieve this functional equivalence.
The result may be described as "minimalist" legislation. The rules may appear very simple, even self-evident. They are also flexible, allowing many possible ways of satisfying them. They are, however, a vital step forward toward certainty. They transform questions of capacity ("Am I allowed to do this electronically?") into questions of proof ("Have I met the standard?"). This is a radical difference. Many computer communications occur between people who have agreed to deal that way. (Indeed the Model Law does not force people to use computer communications against their will.) Without provisions like those of the Model Law, however, the legal effectiveness of electronic transactions on consent may not be clear.
It is important to note that the Model Law does not purport to improve the quality of documents on paper when they are replaced by electronic documents. Defects of form or reliability or permanence that people accept on paper will not affect the validity of electronic equivalents. Parties in practice may ask for more assurance than bare validity gives them, just as they may do for paper records. Oral contracts can be binding, but many people want them in writing anyway. In any medium, the minimal requirements for legal validity may not meet the standards for prudent business or personal transactions. Removing barriers to electronic commerce does not require a change in this philosophy.
The Uniform Electronic Commerce Act is designed to implement the principles of the UN Model Law in Canada. It applies, however, beyond the scope of "commerce", to almost any legal relationship that may require documentation. A list of exceptions appears in section 2. The commentary to each section explains the principles and, where necessary, the operation of the section. Further assistance may be sought in the UN Guide to Enactment of the Model Law, which is at the same World Wide Web address as the Model Law, noted above.
The Uniform Act has three parts. The first part sets out the basic functional equivalence rules, and spells out that they apply when the people involved in a transaction have agreed, expressly or by implication, to use electronic documents. This avoids the need to amend all the many statutes that may state or imply a medium of communication.
This part applies some special rules to governments. It has been widely considered, not just in Canada but in several other countries, that the general permission to use electronic communications may expose governments to an overwhelming variety of formats and media that they may not have the capacity to handle and that may not work for their particular purposes. Private sector entities can limit their exposure by contract; governments often deal with people with whom it has no contract. Part 1 therefore allows governments to set its own rules for incoming electronic documents. Outgoing documents would have to conform to the general standards of the Act, unless authorized to do otherwise by some other legislation.
Part 2 of the Uniform Act sets out rules for particular kinds of communications, including the formation and operation of contracts, the effect of using automated transactions, the correction of errors when dealing with a computer at the other end of the line, and deemed or presumed time and place of sending and receiving computer messages. Part 3 makes special provision for the carriage of goods, to permit electronic documents in a field that depends, on paper, on the use of unique documents, the creation of which is challenging electronically.
1. The definitions in this section apply in this Act.
(a) "electronic" includes created, recorded, transmitted or stored in digital form or in other intangible form by electronic, magnetic or optical means or by any other means that has capabilities for creation, recording, transmission or storage similar to those means and " electronically" has a corresponding meaning.
(b) "electronic signature" means information in electronic form that a person has created or adopted in order to sign a document and that is in, attached to or associated with the document .
(c) "Government" means
(i) the Government of [enacting jurisdiction];
(ii) any department, agency or body of the Government of [enacting jurisdiction], [other than Crown Corporations incorporated by or under a law of [enacting jurisdiction]]; and
[(iii) any city, metropolitan authority, town, village, township, district or [rural municipality or other municipal body, however designated, incorporated or established by or under a law of [enacting jurisdiction].]
Comment: The definition of "electronic" intends to ensure that the application of the Act is not unduly restricted by technical descriptions. For example, digital imaging relies on optical storage, which is technically not electronic, but which is generally seen as properly subject to this Act. Likewise, new technologies may arise that fit within the principles of the Act that might be excluded by a literal reading of "electronic". The only limit is that the product must be in digital or other intangible form. This prevents the definition from extending to paper documents, which have similar capabilities as the electronic media.
The definition of "electronic signature" does not create a different legal meaning of signature in the electronic world. That is why it refers to an intention to sign, thus importing the general law on the mental state required for validity. The definition serves two purposes. First, it makes clear that an electronic signature is simply electronic information; it does not need to "look like" a handwritten signature, though it is possible to digitize handwriting so that it is displayed in that way. Second, it acknowledges that the electronic signature will not be "attached" to an electronic document the same way as an ink signature is to paper. The electronic signature may be "associated with" the document, by mathematical logic or otherwise. The reliability of the association will affect the validity of the signature. That question is dealt with in section 10, not in the definition.
"Government" is broadly defined to include all parts of the government of enacting jurisdictions. However, at the margins each jurisdiction will have to decide when particular entities are more like private sector bodies that should be subject to the general rules of the Act. Crown Corporations are the most likely candidate for such treatment, but not all of them may be given identical status in each jurisdiction.
Municipal governments may be problematic as well. The reasons for separate rules for governments apply to municipalities. The general permission to communicate electronically in section 17 may be very useful. However, the number of municipalities in most enacting jurisdictions creates the potential for diverse and incompatible technical standards, rendering communications expensive if not impossible. Some kind of central coordination may be advisable. This is beyond the scope of the Uniform Act, however. For this reason the reference to municipalities has been square bracketed.
2. (1) Subject to this section, this Act applies in respect of [enacting jurisdiction] law.
(2)The [appropriate authority] may, by [statutory instrument], specify provisions of or requirements under [enacting jurisdiction] law in respect of which this Act does not apply.
(3) This Act does not apply in respect of
(a) wills and their codicils;
(b) trusts created by wills or by codicils to wills;
(c) powers of attorney, to the extent that they are in respect of the financial affairs or personal care of an individual;
(d) documents that create or transfer interests in land and that require registration to be effective against third parties.
(4) Except for Part 3, this Act does not apply in respect of negotiable instruments, including negotiable documents of title.
(5) Nothing in this Act limits the operation of any provision of [enacting jurisdiction] law that expressly authorizes, prohibits or regulates the use of electronic documents.
(6) The [appropriate authority] may, by [statutory instrument], amend subsection (3) to add any document or class of documents, or to remove any document or class of documents previously added under this subsection.
(7) For the purpose of subsection (5), the use of words and expressions like "in writing" and "signature" and other similar words and expressions does not by itself prohibit the use of electronic documents.
Comment: The Act will apply to all legal rules within the authority of the enacting jurisdiction, whether in statute, regulation, order-in-council or common law. This section sets out a short list of exceptions, such as wills and land transfers. The principle of exclusion is not that such documents should not be created electronically. Rather, they seem to require more detailed rules, or more safeguards for their users, than can be established by a general purpose statute like this one.
Subsection (5) says that the Act also does not limit the operation of any rule of the law of the enacting jurisdiction that already provides expressly for the use of electronic documents or expressly bars their use. Subsection (7) ensures that words like "in writing" are not taken to prohibit their use; more specific reference to electronic documents is needed for that purpose.. The Uniform Act intends to remove barriers to electronic communications, but not to reform existing law or to bring existing law into harmony with its standards. That is a separate task for the legislature. Enacting the Uniform Act will avoid the need to amend all the statutes of a jurisdiction that impose or imply paper documents. Where such statutes have already been amended, the Uniform Act does not limit their operation. For example, if the enacting jurisdiction has passed the Uniform Electronic Evidence Act, then the provisions of this Act on originals will not apply to the best evidence rule in that jurisdiction.
Subsections (2) and (6) are safety valves, allowing the government to add to the list of exceptions, (2) by provisions of law, (6) by types of document, in case examples of paper-based documents arise after enactment of the Uniform Act where it is thought that electronic communications should not substitute. If such examples are known at the time of enactment, they can be added to the statutory list here. Advance health care directives (if thought not to be included as a power of attorney for personal care) and agreements on domestic or matrimonial matters might be examples. In the interests of maximizing the benefit of electronic communications, the Uniform Law Conference has kept the exceptions to a minimum.
The Act also allows the government to take the regulatory exceptions off the list again, but not to delete by executive action the exceptions made by statute. While each enacting jurisdiction may choose the legal tool by which the list may be made and amended, the action should be public, as is suggested by the bracketed term "statutory instrument".
There is no general exception for consumer transactions. Consumers want to be sure of the legal effect of their electronic dealings as much as anyone else. Many rules of consumer protection can be satisfied by the functional equivalents to writing in the Uniform Act. However, the general issue of consumer protection in electronic commerce is being separately reviewed by a federal-provincial- territorial working group, and that group may propose complementary harmonized legislation where appropriate.
3. This Act binds the Crown.
Comment: The Crown is covered by this Act, and its electronic communications will be affected by it. Part 1 contains special provisions for government communications that limits this section somewhat. For greater certainty about the rest of the Act, this section has been inserted.
4. The provisions of this Act relating to the satisfaction of a requirement of law apply whether the law creates an obligation or provides consequences for doing something or for not doing something.
Comment: This section ensures that the enabling rules of the Uniform Act apply broadly to "requirements" to use paper, even if the law does not appear to create an obligation. For example, a statute may say "An acceptance in writing is valid", or "An acceptance not in writing is invalid", instead of "An acceptance must be in writing". The principle of the rule in either case may have been to ensure that oral communications would not be relied on. It was unlikely to have been intended to prohibit an acceptance by electronic document.
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