GasEDI

ENFORCEABILITY OFELECTRONIC CONTRACTS

Natural Resources Committee

Calgary Chamber of Commerce

October 19, 1999

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OUTLINE

GasEDI. Issue: Uncertainty. Objective: Legislation.

Proposed Uniform Electronic Commerce Act (UECA).

Current situation. GasEDI’s Proposed Strategy. Further Information. Questions.

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GasEDI

GasEDI

Sponsored by CAPP, SEPAC, CGA, CEPA. Mission:

Promote the development and implementation of North American business and electronic information standards to improve the competitive position of natural gas. We believe all participants in the gas industry - including end

use consumers - are best served by a vibrant, efficient, industry - from well head to burner tip.

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GasEDI

GasEDI’S ENFORCEABILITY OF ELECTRONIC CONTRACTS WORKING GROUP

Mission: Develop standards for enforceable electronic

contracting for use by the Canadian gas industry. These standards are to be compatible with GISB ((US) Gas

Industry Standards Board) standards, and/or lead to requests for modifications to GISB standards.

Review legislation and monitor legislative proposals to assure the requirements of the Canadian gas industry are satisfied.

Monitor establishment of Certification Authorities.

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ISSUE: UNCERTAINTY

There is sufficient uncertainty regarding the enforceability of an electronic contract that commerce in Alberta may be significantly adversely affected.

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OBJECTIVE: LEGISLATION

The Alberta Advantage can be further enhanced by creating a legal environment in which electronic commerce can be carried out with ease and certainty.

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PROPOSED UNIFORM ELECTRONIC COMMERCE ACT (UECA)

The Uniform Law Conference of Canada (ULCC) has adopted a Uniform Electronic Commerce Act and has recommended it for enactment in all provincial legislations / jurisdictions. Purpose: Reduce legal risk for doing e-business

across the country by eliminating uncertainty about the law that applies and by making the law suit the needs of modern commerce.

Application: Beyond the scope of commerce to almost any legal relationship that may require documentation.

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SALE OF GOODS ACT

“A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.” United Nations Convention on Contracts for the

International Sale of Goods.

This Convention has been adopted by Canada’s federal government and several provinces, including Alberta.

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STATUTE OF FRAUDS

The Statute requires a “note or memorandum” of the contract “signed by the party to be charged” or the party’s authorized agent. The memorandum must contain all the essential terms

of the contract, including the identity of the parties. There is a strong argument that the note or

memorandum need not necessarily be on paper, but the information must be accessible so as to be useable for subsequent reference.

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EVIDENCE ACT

Information should not be denied legal effect or enforceability solely by reason that it is in electronic form. A digitally signed document should be given equal

weight to a manually signed document as evidence. If both a hardcopy and electronic version of a

document are executed both should be kept.

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INTERPRETATION ACT

A legal contract should be interpreted to be in writing provided the information is accessible so as to be useable for subsequent reference. The law has endeavoured to take cognizance of, and

to be receptive to, technological advances in the means of communication: Teletype. Fax.

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CANADA BILL C-54

Restricted (mostly) to communications with the Canada’s federal government. Will only apply to to situations specified in a schedule

(opt in statute).

This bill also covers privacy issues.

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CANADIAN DEPARTMENT OF JUSTICE

Section 35 of the Interpretation Act defines writing as follows: “writing”, or any term of like import, includes words printed, typewritten, painted, engraved, lithographed, photographed or represented or reproduced by any mode of representing or reproducing words in visible form. For most electronic documents, this definition will be

sufficient because they will be in “visible form”, either by representation on a computer screen or as a print-out.

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ELECTRONIC COMMERCE TRADING PARTNER AGREEMENT

Prior to passage of appropriate legislation, electronic transactions will likely be enforceable provided they are preceded by a paper-based Electronic Commerce Trading Partner Agreement. An Electronic Commerce Trading Partner Agreement

should address the issues of enforceability, authenticity and integrity of the electronic transaction.

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ALBERTA ENERGY AND UTILITIES BOARD (AEUB)

Electronic filing is being adopted.

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NATIONAL ENERGY BOARD (NEB)

The NEB Act does reference documents being in writing and having a signature. Nevertheless the NEB is moving to mandatory

electronic filings for the fall of 2000 and is working on changing systems from paper to electronic to support this.

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ONTARIO ENERGY BOARD (OEB)

The OEB is cooperating with the NEB in developing electronic filing standards.

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GasEDI’S PROPOSED STRATEGY

Position to be endorsed by CAPP, put on CAPP letterhead, and forwarded by CAPP to the appropriate government personnel.

Other organizations would support the CAPP / GasEDI position by forwarding a copy of the CAPP / GasEDI position to the appropriate government personnel. To emphasize consistency, such other organizations

would, preferably, not transcribe the CAPP / GasEDI position statement onto their own letterheads.

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DISCLAIMER

Information is published by GasEDI as a service - such information should not be considered a comprehensive treatment of any subject. Comments published by GasEDI reflect the views of

individual authors and are not intended to provide legal advice.

Readers should not act or rely on information provided by GasEDI without seeking specific legal advice.

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FURTHER INFORMATION

Contact: Ian Anderson

Project Manager GasEDI Tel: 403-243-1079 Fax: 403-243-0546 Cell: 403-860-5941 Web: http://www.gasedi.ca Email: ian@isanderson.com

GasEDI

ENFORCEABILITY OFELECTRONIC CONTRACTS

Ian AndersonI. S. Anderson & Associates Limited

Business Reengineering Electronic Commerce EDI

100 - 1039 - 17 Avenue SW, Calgary, Alberta, Canada T2T 0B2

Tel: 403-243-1079 Fax: 403-243-0546 http://www.isanderson.com

Cell: 403-860-5941 Email: ian@isanderson.com