The Liability of Certification Authorities to Relying Third Parties, 17 J. Marshall J. Computer & Info. L. 961 (1999)

Authors

Michael J. Osty
Michael Pulcanio

Abstract

As Internet technology continues to expand and individuals continue to "log-on" at an ever-increasing rate, business transactions via computers have quickly expanded. Electronic commerce has become a widely accepted way of entering transactions and consummating deals. Consequently, millions and even billions of dollars change hands in transactions utilizing electronic commerce daily. These transactions are conducted between individuals who often have had no prior business relationship with each other. As a result, the need for a trusted third party to authenticate these transactions has become absolutely necessary. However, the laws governing the financial responsibility of these trusted third parties, or certification authorities, have not been thoroughly developed. The need for digital certification authorities evolved due to the growth of computer and Internet technology. Unfortunately, legislation and strict guidelines for monitoring the performance of certification authorities has not evolved as rapidly. A few states have drafted legislation to address the activities of certification authorities, while others have only just begun the process. A number of states have pending legislation concerning digital signatures. Despite the recent legislative activity, one very important area which continues to lack thorough and uniform coverage by current statutory schemes, is the financial responsibility of certification authorities. Ultimately, all state legislation must address the financial responsibility of certification authorities, because the transactions that they authenticate will undoubtedly have great financial importance to the parties involved. This article focuses on the current liability standards and responsibilities of the trusted third parties known as certification authorities. Part II explains the certification process and the role of the certification authority. Part III identifies the current liability standards of certification authorities to relying third parties.

Recommended Citation

Michael J. Osty & Michael J. Pulcanio, The Liability of Certification Authorities to Relying Third Parties, 17 J. Marshall J. Computer & Info. L. 961 (1999)