The Validity of Online Contracts: The Electronic Commerce Act, 2000
Introduction:
You are prompted to accept the terms and conditions of a contract
while purchasing a book online? Does this form a binding contract
in Ontario? This question is of great importance to dot.com companies
as well as internet marketers who wish to sell products and form legally
binding contracts over the internet. The simple answer is that yes
such contracts are enforceable provided certain conditions are met.
Analysis
The Electronic Commerce Act, 2000 which received Royal Assent on October
16, 2000, uses the minimalist approach to give legal effect to electronic
documents and signatures. It is independent of the type of technology used.
Section 4 provides that information or a document is not invalid or
unenforceable by reason only of being in electronic form. A legal
requirement that a document be in writing is satisfied by information
or a document that is in electronic form if it is accessible so as to be
usable for subsequent reference: See section 5. Sections 10, 6, 7, 8
and 9 of the Act provides that information is not accessible if it is
merely made available for access for the person, for example on a web
site but sending information by EMAIL or displaying it to the person in
the course of a transaction that is being conducted electronically means
that it is accessible. Section 11(3) provides for reliability standards.
Section 20 provides that a contract may be formed by an electronic agent
which is defined by that Act as a computer program or means to respond to
an electronic document. Excluded from this Act are documents such as
wills, codicils agreements for purchase and sale of real estate: section
31.
Conclusions and Recommendations:
The Electronic Commerce Act, 2000 provides that electronic contracts and
signatures are enforceable provided certain conditions relating to a
ccessability and reliability are meet.
It is recommended that the web site and method of operations be reviewed
with technical and legal staff to ensure compliance with this Act.
Schedule "A"
The Electronic Commerce Act, 2000
The Ontario Government on Oct. 16, 2000 passed the Electronic Commerce Act, 2000 which provides, in part, as follows::
Legal recognition of electronic information and documents 4. Information or a document to which this Act applies is not invalid or unenforceable by reason only of being in electronic form
Legal requirement that information or document be in writing 5. A legal requirement that information or a document be in writing is satisfied by information or a document that is in electronic form if it is accessible so as to be usable for subsequent reference. 2000, c. 17, s. 5
Section 10 of the Act provides that information is not accessible if it is merely made available for access for the person, for example on a website but sending information by EMAIL or displaying it to the person in the course of a transaction that is being conducted electronically..
Legal requirement to provide information or document in writing 6. (1) A legal requirement that a person provide information or a document in writing to another person is satisfied by the provision of the information or document in an electronic form that is,
(a) accessible by the other person so as to be usable for subsequent reference; and
(b) capable of being retained by the other person. 2000, c. 17, s. 6 (1)
Legal requirement to provide information or document in specified non-electronic form 7. (1) A legal requirement that a person provide information or a document in a specified non-electronic form to another person is satisfied by the provision of the information or document in an electronic form that is,
(a)organized in the same or substantially the same way as the specified non-electronic form;
(b) accessible by the other person so as to be usable for subsequent reference; and
(c) capable of being retained by the other person. 2000, c. 17, s. 7 (1)..
The means that contracts and signatures performed electronically have the same legal effect as if made in a hard copy form.
Legal requirement re original documents 8. (1) A legal requirement that an original document be provided, retained or examined is satisfied by the provision, retention or examination of an electronic document if,
(a) there exists a reliable assurance as to the integrity of the information contained in the electronic document from the time the document to be provided, retained or examined was first created in its final form, whether as a written document or as an electronic document; and
(b) in a case where the original document is to be provided to a person, the electronic document that is provided is accessible by the person so as to be usable for subsequent reference and capable of being retained by the person. 2000, c. 17, s. 8 (1).
Whether information or document is provided 10. (1) For the purposes of sections 6, 7 and 8, electronic information or an electronic document is not provided to a person if it is merely made available for access by the person, for example on a website. 2000, c. 17, s. 10 (1).
(2) For greater certainty, the following are examples of actions that constitute providing electronic information or an electronic document to a person, if section 6, 7 or 8 is otherwise complied with:
1. Sending the electronic information or electronic document to the person by electronic mail. 2. Displaying it to the person in the course of a transaction that is being conducted electronically. 2000, c. 17, s. 10 (2). Legal requirement that document be signed 11. (1) Subject to subsections (3) and (4), a legal requirement that a document be signed is satisfied by an electronic signature. 2000, c. 17, s. 11 (1).
Disclaimer: This information is provided as general information only. It is not
intended to be provided as legal advice. The reader is advised to seek
independent legal advice.