Lecture 2. Enabling Electronic Transactions: Basic Principles

Basic Principles


Electronic contracts are concluded through data messages which are defined by section 1 ECTA as “data generated, sent, received or stored by electronic means and includes (a) voice, where the voice is used in an automated transaction; and (b) a stored record”.

Certain principles have been expounded in order to ensure that laws originally crafted for the physical environment are meaningfully transposed onto the digital environment. The aim of these principles is to ensure that, as far as possible, data messages are afforded legal validity and that rules are developed to facilitate the application of ‘traditional’ laws to the digital environment. The relevant basic principles may be summarised as follows:

Non-discrimination: This ensures that data messages (even where incorporated by reference) have legal validity (see subsection entitled ‘Legal recognition of data messages’ below).

Media and technology neutrality: This ensures that the use of electronic technology does not result in unequal treatment of transactions because of the platform on which they are concluded.

Functional equivalence: The development of rules applicable to electronic communications to facilitate e-commerce by adapting existing [paper-based environment] legal requirements.The functional-equivalent approach has been taken in articles 6 to 8 of the Model Lawwith respect to the concepts of writing, signature and originalrespectively and not with other concepts. This is incorporated into South African law by ECTA sections 12 (writing), s13 (signature) and s14 (original).

Party autonomy: This affords parties to electronic transactions the freedom to agree on appropriate ecommerce facilities and levels of security to suit their circumstances. This autonomy may be restricted or limited by statutory provisions.

per Luca Castellani ‘UNCITRAL legislative standards on electronic communications and electronic signatures: an introduction’ (2010)

Recommended Reading

Luca Castellani ‘UNCITRAL legislative standards on electronic communications and electronic signatures: an introduction’ (2010)

José Angelo Estrella Faria ‘e-Commerce and International Legal Harmonization: Time To Go Beyond Functional Equivalence?’ (2004) 16 SA Merc LJ 529 – 555

Chris ReedTaking Sides on Technology Neutrality(2007) 4:3 SCRIPT-ed 265

Guide to Enactment of the UNCITRAL Model Law on Electronic Commerce (1996)