Electronic Commerce Legislation: What You Can Do Now

Electronic Commerce Legislation:

What You Can Do Now

Osgoode LL.M. classToronto, March 2, 2005

John D. GregoryMinistry of the Attorney General

Electronic Commerce Legislation 2

Electronic Commerce LegislationOutline

Focus on Ontario law Principles and Application of the Ontario Act What you can do with the ECA What you can’t do with the ECA What you must be careful of with the ECA How this compares with elsewhere What’s next? Sources


Status of the ECA 2000

Electronic Commerce Act 2000– Statutes of Ontario 2000, c. 17– In force October 16, 2000

Comprehensive minimalist legislation Interprets most Ontario laws Sources:

– United Nations Model Law on E-Commerce– Uniform Electronic Commerce Act


Principles of E-Commerce Act

“media neutral” - the law of electronic communications is the same as the law of any other medium; the Act merely accommodates the differences of media.

“technology neutral” - the law does not favour one technology over another.

“removes barriers” - the Act does not regulate e-communications or harmonize existing laws that already govern them.


Principles of E-Commerce Act General rule: no discrimination General protection: only on consent (express

or implied)(real and relevant)– media bias or reality check?

“Functional equivalents”: what an electronic document has to be or do in order to work as a document on paper

NOTE: e-documents do not have to be more reliable than paper documents


Application of E-Commerce Act ALL legal relationships under Ontario law

BUT: – named types of documents

wills, most powers of attorney most land transfers most negotiable instruments election documents - municipal and provincial

– electronic communications already provided for by law (allowed, regulated, prohibited)

– biometrics, unless consent or statutory authority power to add to list by regulation (safety valve)


What you can do with the ECA

1. Use an electronic document when something has to be “in writing”

The e-document has to be “accessible so as to be usable for subsequent reference”– Accessible to whom? Objective or subjective?– Usable for the same purpose as the writing– How long is “subsequent”?

No standard of integrity beyond this.



2. Sign with an e-signature a document that the law requires to be signed.

“Electronic signature” - includes intention to sign, link with signed document

VERY open-ended definition No rule for attribution No standard of integrity beyond definition Authority for government to regulate methods



3. Use an electronic document as an “original”

Can have an electronic original or an electronic version of another original

Key is (variable) assurance of integrity of the information

Is format part of the information? Note PPSA exception for chattel paper



4. Retain electronic records to satisfy a retention requirement

E-documents retained may be originals or electronic reproductions

Key is integrity again Evidence of transmission to be kept Retain for same period, accessible to same

people as paper records



5. Enter into contracts electronically Clicking, touching, speaking to computer are all

acceptable methods Can automate the offer and the acceptance The usual legal requirements remain:

– Intention to contract– Consideration

Nothing about when a message is effective


What you can’t do with the ECA

1. Compel someone to deal with you by electronic communications

Consent rule mitigates discomfort levels Consent rule mitigates security risk Consent may be inferred from conduct if

reasonable and relevant Consent rule applies to public bodies too



2. Create a unique electronic document Different from attribution or integrity Technologically not yet clear

– distinct from immobilizing document So no negotiability, documents of title Carriage of goods is exception

– target for technology rather than affirmation of existing capacity



3. Ignore consumer protection and privacy law Consumer protection is under separate study

– published principles aim mainly at disclosure– Alberta and Manitoba have drafted regulations– status of post-transaction notices is hot in US

Privacy overlies the whole topic– Federal laws have national effect– Ontario has health sector privacy legislation– QC, AB, BC have private sector privacy legislation



4. Skip reading the law applicable to your facts

The ECA yields to other law that prohibits, regulates or allows electronic documents

Display and delivery requirements still apply– but if you can opt out, you can use e-docs– you may be able to comply electronically

Rules of court, land transfers, etc etc



5. Seal a document Unclear how to do an electronic seal

– cf. Court seal for electronic writs– E-seal is much like e-signature

One size does not fit all:– function: consideration or solemnity– function: integrity of document– function: assurance of source of document

ECA authorizes regulations on seals


What you have to be careful of

1. Security of e-documents and e-signatures A legal standard is not necessarily a prudent

standard Party autonomy means risk as well as choice Consent principle provides some protection Security for confidentiality is also important



2. Providing information electronically Information has to be accessible for subsequent

use and capable of being retained You can’t inhibit printing or downloading You can’t provide information by posting on a

web site– except by webmail or in course of transaction– except where the law provides otherwise



3. Encouraging mistakes An individual dealing with an electronic

agent (any web site) can void transaction for mistake– if meets conditions, notably does not keep benefit

Could be hard if transaction is in a series Provide means to avoid or cure mistakes

– “Are you sure”?



4. Has your message been received? The ECA has a double rule on receipt:

– designated system: presumed received when accessible and processible

– undesignated system: presumed received when addressee becomes aware of accessibility

Evidence of accessibility may be scarce Spam filters create issues with the rule When in doubt: get acknowledgement



5. Public bodies’ IT standards Public bodies can require that incoming

documents meet IT standards No form requirement for these standards

– may be as simple as word processing type– most public bodies will be flexible, OTC rule

Standards must be communicated Harmonization of IT standards - likely?



6. Existing form requirements in contracts The ECA applies to legal requirements for

writing, signature, and others The ECA does not interpret a contractual rule

e.g. that something has to be in writing Parties to such agreements will have to cure

them by agreement


How ECA compares to PIPEDA 1. Privacy in PIPEDA not UECA 2. Electronic documents: in force, but …

– C-6 is opt-in (only one law designated so far)– standards are to be in regulation (one made)– “secure electronic signatures” (reg. in 2005)

Secure electronic signatures are required for: Certificates of ministers or public officers as evidence Statements as to truth of information Seals (if stated to be used as a seal) Documents to be equivalent to originals Statements under oath (deponent and commissioner) Signatures of witnesses to documents (and the signers)


How ECA compares to PIPEDA

3. Electronic evidence:– PIPEDA enacts Uniform Electronic Evidence Act, and

optional presumptions (s. 31.4) Presumption of attribution Presumption of integrity Both depend on regulations not yet made

– Ontario enacted UEEA in Red Tape Reduction Act 1999 Sch B section 7 (in force June 30/00)

NOTE: record retention rule in PIPEDA (section 37) is limited to documents that start their life in electronic form (not so in UECA s.13, ON s.12)


How ECA compares to other Canadian laws

SK Electronic Information and Documents Act– basically the same, except govt filing rules (2002 amdt)

MB Electronic Commerce and Information Act– MB Bill is “opt in” for functional equivalents– Opt-in part is still not in force– MB has some consumer protection too

NS Electronic Commerce Act– basically the same as UECA

BC Electronic Transactions Act– no special “government” rules



YK Electronic Commerce Act– Basically the same as UECA

NB Electronic Transactions Act– Most variation of any provincial implementation– No exclusions, nothing on contracts or government

PEI Electronic Commerce Act– Basically the same as UECA– Unusual definition of e-sig but same substance

NFL Electronic Commerce Act– Basically the same as UECA

AB The Electronic Transactions Act– Basically UECA with some ON-like changes



QC Act to establish legal framework for information technology

_______________________- Generic title

- “technology-based”

- Stability of document

- Life cycle of document

Uniform Electronic Commerce Act

______________________- “e-commerce” but

frequently changed- “electronic”- Accessible so as to be

usable for subsequent reference

- Retention rules



Quebec statute______________________- Link with creator – sig- Applies to all documents

(except consumer…)- Consent (s. 29)- Presumption of reliability

and stability (ss. 7, 15)- Protect the incautious by

express standards

Uniform E-Commerce Act_______________________- Definition of signature- Applies to all documents

(except list – N.B.: all)- Consent (s. 6)- Flexible standard, no

express presumption- Allow flexibility – protect

some by exclusions



Quebec spells things out - UECA lets some things go without saying

– Question of judgment – views will differ

Quebec Act as users’ guide for UECA …

Quebec adds– rules on certification processes for signatures– rules on liability of intermediaries– rules on establishment of technical standards


How ECA compares to USA

Uniform Electronic Transactions Act (UETA) UETA and ECA draw on UN Model Law UETA focuses on “record” Consent, functional equivalence +- the same UETA allows for “transferable records” UETA passed in half the states in a year


How ECA compares to USA

Federal legislation - E-SIGN– Electronic Signatures in Global & National Commerce

Act in force October 1/00 Imposes UETA standards on state laws

– no higher standards allowed for private use– public agencies may require more security

Consumer protection carve-outs– must demonstrate capacity to receive e-docs– especially post-default notices


What’s next

Electronic signatures– UN Model Law on Electronic Signatures

reliability standards duties of parties: signature, CA, relying party recognition of foreign certificates and signatures

– GO-PKI and others identity certificates and role certificates role for legislation?

– Smart cards signatures vs access controls privacy rules


International initiatives

UNCITRAL draft convention on the use of electronic communications in international contracts– Rules on form requirements– Rules on substantive requirements– Rules on relations with other treaties

See also: UNCITRAL Model Laws EU Directives: E-Signature, E-commerce


Relation to Other Issues

Privacy– IPC said ECA is acceptable– FIPPA and MFIPPA remain in force– Personal Health Information Protection Act has been

ruled compatible with PIPEDA (January 2005) so organizations covered by it will comply with the provincial law not PIPEDA for data within Ontario, account to Information and Privacy Commissioner.

– No current plans for a general Ontario law– BC and Alberta, and Quebec, have general laws ruled

consistent in principle with PIPEDA


Relation to Other Issues Consumer Protection

– ECA has some protections– Educational guidelines published Nov 99– FPT Internet Sales Harmonization Template:

disclosure of information– seller’s identity, location, applicable law– description of product, price, terms, remedies

receipts needed cancellation rights for non-disclosure, -delivery

– ON:Consumer Protection Act 2002 (in force July 1/05) Some anti-Rogers v Kanitz provisions

– AB, MB, NS: reversing credit card transactions


What’s next International convention from UNCITRAL Jurisdiction

– few cases, more or less like US cases (+ defamation)– regulatory jurisdiction - Alberta and federal cases– enforcement of judgments – untested in Canada

Dispute resolution - signs of interest Taxation - the big issue (detection not principle) PKI – federal, provincial, and private work Accessibility – to people with disabilities Licensing - no sign of UCITA in Canada Connectivity - serious (non-legal) initiatives


Questions?

John D. Gregory, “Canadian Electronic Commerce Legislation”, (2002), 17 Banking & Finance LR 277 - 339

http://www.ulcc.ca– (notably under Commercial Law Strategy)

[email protected] [email protected]

– by subscription - request to John Gregory

http://www.ulcc.ca/

http://www.ulcc.ca/

http://www.ulcc.ca/


Sources

Electronic Commerce Act 2000 (Ontario)– http://www.e-laws.gov.on.ca/DBLaws

/Statutes/English/00e17_e.htm

Uniform Electronic Commerce Act– http://www.ulcc.ca/en/us/index.cfm?sec=1&sub=1u1

– Implementation and related laws across Canada: http://www.ulcc.ca/en/cls/index.cfm?sec=4&sub=4b

http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/00e17_e.htm






http://www.ulcc.ca/en/us/index.cfm?sec=1&sub=1u1





http://www.ulcc.ca/en/cls/index.cfm?sec=4&sub=4b








Sources Consumer Protection Federal-provincial-terrritorial work

– Internet Sales Harmonization Template, 2001– http://strategis.ic.gc.ca/epic/internet/inoca-bc.nsf/en/

ca01642e.html – Code of Practice for Consumer Protection in e-com– http://cmcweb.ca/epic/internet/incmc-cmc.nsf/en/fe00064e.html

Ontario Consumer Protection Act 2002– http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/

02c30a_e.htm Regulations – Ontario Gazette Feb 5/05 – in force July 1/05


Sources Privacy

– PIPEDA (Canada)– http://laws.justice.gc.ca/en/P-8.6/index.html – Personal Information Protection Act (BC)– http://www.legis.gov.bc.ca/37th4th/1st_read/gov38-1.htm– Personal Information Protection Act (AB)– http://www.canlii.org/ab/laws/sta/p-6.5/20041104/

whole.html – Personal Health Information Protection Act (ON)– http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/

04p03_e.htm


Sources

United Nations Model Laws– http://www.unictral.org/english/texts/electcom/ml-

ec.htm (Model Law on Electronic Commerce)– http://www.unictral.org/english/texts/electcom/ml-

elecsig-e.pdf (Model Law on Electronic Signatures) UNCITRAL draft Convention on e-

communications– http://www.uncitral.org/english/workinggroups/wg_ec/

index.htm– http://www.uncitral.org/english/sessions/unc/unc-38/38-

index-e.htm

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