The Electronic Commerce Act, 2000

The Electronic Commerce Act, 2000 (the Act) became law on the 20th September 2000. The Act is premised on two fundamental principles. The first is to provide for the legal recognition of electronic signatures, electronic writing and electronic contracts so as to ensure that such electronic communications would not be treated any differently under the law, than traditional paper-based communications. The second founding principle was to draft the legislation in as technologically neutral a fashion as possible, so as to make it future-proof.

The Act substantially implemented the provisions of the Electronic Signatures Directive (1999/93/EC) and went some way towards implementing the provisions of the Electronic Commerce Directive (2000/31/EC). It is a straightforward piece of legislation divided into four parts, with one Schedule. The Schedule contains three annexes, which are taken directly from the Electronic Signatures Directive.

Principal Features

The principal features of the Act are as follows:-

• Contracts that are concluded electronically are valid and enforceable.
• The provision of electronic information is legally effective.
• Subject to complying with specific requirements and to satisfying specific consent obligations, electronic signatures, electronic witnessing and electronic sealing of documents are given legal effect.
• The evidential requirement for the maintenance of original records may be satisfied by the maintenance of electronic originals.
• Any requirement that paper records be retained for given periods may be satisfied by the retention of electronically stored records.
• There is provision for the acknowledgement of the receipt of electronic communications.
• There is provision for the establishment of time and place of sending and receipt of electronic communications.
• Electronic documents are admissible as evidence.
• There is the provision for supervision, accreditation and liability of certification service providers.
• There is provision for domain name registration.

Exclusions

There are exclusions from these principal features. Section 10 of the Act provides that the laws governing Wills, Trusts and Powers of Attorney as well as the laws governing Affidavits and sworn Declarations, as well as the rules, practices and procedures of any Court or Tribunal, are excluded from the operation of the Act, as is the law governing the transfer of title of interests in real property. In respect of real property, it should be noted that binding contracts can nevertheless be concluded electronically.

These exclusions are not intended to be permanent. The Act anticipates that Regulations may be introduced in due course as and when technological advances permit the gradual inclusion of those matters, which have been excluded from the operation of the Act.

Electronic Information

The Act provides at Section 9, that information cannot be denied legal effect, force and validity simply because it is wholly or partially in electronic form. In other words, information that is provided on a web page or the contents of an e-mail, cannot be discriminated against simply because they are in electronic form.

The Act provides that where the law requires that information be given or permitted in writing that the requirement extends to include electronic writing. However, there are three conditions to be satisfied before information in electronic form can be provided.

1. The information in electronic form must be readable and must be capable of being interpreted by the recipient.

2. The recipient must consent to the provision of the information in electronic form.

3. Where the intended recipient is a public body, any information technology, procedural or verification conditions which the public body has designated, must be complied with.

Electronic signatures

The Act introduces the concept of an electronic signature and the concept of an advanced electronic signature. In essence, an electronic signature is an identifier, which analogous to a hand-written signature, serves as the method of identifying the originator. Its definition includes an advanced electronic signature. The definition of electronic signature is sufficiently broad to include the name of the sender contained at the bottom of an e-mail.

An advanced electronic signature is a more structured electronic signature, designed to provide greater security to the sender and the receiver. In essence, it contains irrefutable proof that the document to which the signature is attached, has not been manipulated since its dispatch and that the person who has signed it, is who he says he is.

Section 13 of the Act provides that in all circumstances where a document needs to be signed, so as to have legal effect, it may be signed using an electronic signature where two essential conditions are met.

These are as follows:-

1. The person to whom the signature is addressed must first consent to the use of the electronic signature.

2. Where the intended recipient is a public body, its information technology or procedural requirements must be complied with.

The Act provides that subject to certain circumstances, a document can be witnessed electronically and can be sealed electronically.

Electronic Originals

The Act also provides that electronic documents may be constituted as electronic originals if certain requirements are met. These are as follows:-

1. Where there is an assurance that the information contained within the document is complete and unadulterated.

2. Where the information can be presented and displayed in a manner so that it can be both read and understood.

3. That the information must be readily accessible.

Section 18 of the Act provides that where there is an obligation to retain or archive original documents for given periods of time, such an obligation can be met by the retention and storage of such documentation in electronic form.

Legal effect to Electronic Communications

Section 19 of the Act provides that a contract that is concluded electronically shall not be denied legal effect, validity or enforceability simply because or partly because it is in electronic form and has been concluded wholly or partly by means of electronic communication. This section is designed to underline and give certainty to the validity and enforceability of contracts that are concluded electronically. The Act is not prescriptive however. The parties are free to agree how they shall conclude their contractual arrangements. It is designed to facilitate the conclusion of electronic contracts.

Receipt of Electronic Communications

The Act also addresses how electronic communications can be received. Again, the Act is not prescriptive. The parties to the contract are free to agree the form of acknowledgement that is required for the purposes of the contract. It could include for example, a return email or telephone call, but could also include conduct.

However, the Act does provide some guidance where the parties to the contract have not agreed how the receipt of electronic communications is to be acknowledged. There are three principal rules.

These are as follows:-

1. If the sender requires and acknowledgement but does not indicate how the electronic communication should be acknowledged, the recipient may acknowledge receipt of the electronic communication by using another electronic communication or some other form of communication, which includes conduct.

2. If the sender seeks an acknowledgement of the receipt of the electronic communication, then it will be treated as if it was never sent, until such time as the sender receives the acknowledgement.

3. Where the sender seeks an acknowledgement of receipt of the electronic communication as a condition of the communication that it issues and if such is not received, then the electronic communication would be treated as if it had never been sent.

Time and Place of Sending and Receipt of Electronic Communications

It is not hard to see why certainty as to the time and place of sending and receipt of electronic communications could be important in a contractual situation, especially in the case of a dispute between the parties to the contract. In circumstances where the contract does not provide for these matters, then the following provisions apply:-

• An electronic communication is deemed to have been sent when it enters an information system outside the control of the sender.
• An electronic communication will be deemed to have been received when either it enters the information system designated by the receiver, or where not so designated by the receiver when it comes to the attention of the receiver, i.e. when the message appears on the receiver's email system.
• The place of sending of the electronic communication will be deemed to be the principal place of business of the sender or the place where he or she ordinarily resides in circumstances where he or she does not have a place of business.
• The place of receipt of the electronic communication will be deemed to be the principal place of business of the recipient, or in circumstances where the recipient does not have a place of business, the place where he or she ordinarily resides.

Admissibility of Electronic Communications and Electronic Signatures

Section 22 of the Act authorises the admissibility of both electronic communications and electronic signatures as evidence in legal proceedings. In other words, electronic communications and electronic signatures cannot be denied their evidentiary value because they are in electronic form. Electronic communications are now accorded the same evidential value as traditional paper-based documentation.

Offences

The Act creates the offences of using an electronic signature for fraudulent purposes, or accessing, copying or altering an electronic signature creation device of a certification service provider without authorisation.

Existing Legislation

The Act provides that all electronic Contracts concluded within the State will be subject to existing consumer protection legislation and defamation laws. In addition, the Act does not affect the operation of legislation concerning taxation or other government taxes, the operation of the Companies Acts, the operation of the Uncertified Security Regulations, 1996 or any substituted regulations or the operation of the Criminal Evidence Act, 1992, the Consumer Credit Act, 1995 or the Unfair Terms in Consumer Contract Regulations, 1995.

Certification Service Provides

Part 3 of the Act sets out the provisions governing the operation of Certification Service Providers (CSP's). These providers are entities whose business is the issuing of certificates or the provision of services relating to electronic signatures.

Section 29 of the Act does not impose any prior authorisation requirements on CSP's wishing to set up in business and to offer their services. However, Section 30 of the Act states that they will be liable in pay compensation for damage caused to any person who relies on the certificates issued by them unless the CSP concerned can prove that it has not been negligent in the provision of its service. In essence, the CSP must ensure that the information that is provided in the certificate is accurate at the time that the certificate is issued.

Domain Names

Part 4 of the Act deals with the regulations that may be introduced in relation to domain name registration in Ireland. Section 31 allows the Minister for Public Enterprise to regulate the provision of the "ie" domain name and to put it on a statutory basis. Such regulations may prescribe who will be the designated authority for the allocation and registration of domain names within the ".ie" TLD, the form of registration, the duration of the registration, any renewal or revocation requirements, fees to be paid and other necessary matters.

For further information or general enquiries contact: -
Patrick Ryan
Email: pryan@kilroys.ie
Telephone: +3531-439 5600
Fax: +3531-439 5601/439 5602

© Kilroys Solicitors 2002