Ed Richardson
IT'S BACK to basics for local and international lawmakers as they try to formalise trade in the electronic age.
The Green Paper on Electronic Commerce for South Africa says the current legal framework is tailored for paper-based commercial transactions.
Therefore a need exists to formulate a new legal framework that also includes those transactions that are concluded electronically.
It all starts with the language of the law.
As in most countries, contracting and trade laws in South Africa were developed in a paper-based environment, say the authors of the Green Paper.
These laws include words such as document, writing, signature, original, copy, stamp, seal, register, file, deliver, etc.
Take the concept of a copy. When you needed to rewrite a document, make a carbon copy or, more recently, a photocopy, the law was pretty clear.
So much so that the courts accept original documents as evidence.
However, as the authors of the Green Paper point out, certain requirements are irrelevant or not applicable in e-commerce based transactions, since some laws locally and internationally require compliance with terms such as 'original', 'duplicate', 'copy', 'registration', 'filing', 'certification', 'seal', 'stamps', 'authentication' etc either to establish or enforce an agreement.
The trend towards computer-to-computer business, where orders are generated automatically once stock levels reach a certain point, raises a whole additional set of problems.
According to the Green Paper, computer evidence created automatically without human intervention would not be governed by the Computer Evidence Act 57 of 1983, which leaves it in a kind of limbo.
Even where people are involved, virtual deals may fall outside the current law, say the authors.
In the case of a paper-based communication, the question would arise as the result of an alleged forged signature of the purported originator.
In an electronic environment, an unauthorised person may have sent the message but the authentication by code, encryption or the like, might be accurate. Due to the impersonal (not face-to-face) and instantaneous nature of e-commerce transactions, commercial practice may require the law to provide some measure of certainty in this regard.
Businesses are, however, covered in the interim. In terms of the doctrine of estoppel in South African law, a purported originator who neither sent nor authorised a communication to be sent, may nevertheless be held bound in law if his negligent conduct, whether by action or omission, induced a reasonable belief of authenticity in the mind of the addressee, which caused the latter to act thereon to his/her peril.
Another challenge facing the courts is establishing just when and where an agreement was concluded.
The time when and place where an e-commerce contract is concluded are fundamental to determining whether South African courts have jurisdiction to adjudicate a dispute involving both local and foreign nationals and, if so, which country's laws our courts would apply.
The capacity of one of the parties to contract (e.g. matrimonial property issues in different countries) may also be affected by the place where a contract is deemed to have been concluded, is the way the Green Paper puts it.
Other issues that have to be addressed include taxation, copyright and trademark protection, consumer protection, privacy, and the formulation of common laws governing international trade.
Business has been invited to comment on the Green Paper. You'll find it at www.ecomm-debate.co.za/
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