Moving with Change: Electronic Signature Legislation as a Vehicle for Advancing E-Commerce, 17 J. Marshall J. Computer & Info. L. 723 (1999)

Authors

Thomas J. Smedinghoff
Ruth Hill Bro

Abstract

The value of U.S. based electronic commerce (e-commerce) transactions was estimated to be $43 billion in 1998 and is projected to grow to $1.3 trillion by 2003, totaling over nine percent of total U.S. business sales. Governments have embraced e-commerce as a positive development that should be encouraged. Many of our states and foreign countries have responded by enacting legislation regarding the enforceability of e-commerce transactions. There are three fundamental issues surrounding online commerce. These issues are: 1) whether the transaction is legal; 2) whether the message can be trusted; and 3) what are the rules of conduct. Concerning the legality of e-commerce, current case law suggests that the courts find that electronic records can meet the statutory writing requirements, and that electronic signatures meet the statutory signature requirements. Trustworthiness of electronic messages is of great concern to parties. Parties act in reliance on electronic messages and enter into binding legal commitments with significant economic consequences. The issues surrounding trustworthiness include, authenticity, integrity and nonrepudiation. Nonrepudiation is the ability to hold the sender to his communication in the event of a dispute. The rules of conduct for e-commerce need to be predictable. Like longstanding principles of freedom of contract, e-commerce needs to be predictable. Predictability is the watchword for the growth of commerce, and law can play a key role in providing this valuable commodity. Legislation can be effective in encouraging e-commerce if it is properly written to promote rather than disable, the desirable public policy goal of global e-commerce. This can be done by distinguishing between regulatory legislation which often creates restrictive standards, and enabling or facilitating legislation which can be used to support freedom of contract and increase predictability and certainty in online transactions.

Recommended Citation

Thomas J. Smedinghoff & Ruth Hill Bro, Moving with Change: Electronic Signature Legislation as a Vehicle for Advancing E-Commerce, 17 J. Marshall J. Computer & Info. L. 723 (1999)