At issue is the regulation of the whole range of electronic techniques used in negotiating and concluding contracts. These include the use of data messages such as electronic data interchange (EDI), e-mail and even older technologies, such as telegrams, telex or telecopy.
Questions as to the validity of electronic signatures, the increased likelihood of contracts being 'clicked' into being by mistake, and even the question of when or how such a contract is concluded, are not covered by existing international rules.
These date back to the Vienna Convention of 1980, pre-dating the growth of e-commerce. The UN Conference on International Trade Law (UNCITRAL) is therefore seeking to bring the rules up to date, and while it has not decided on a particular method for doing this, it has prepared a draft convention to be placed before governments at a UNCITRAL conference in Vienna in November.
The ICC has created model contract clauses and guidelines that are used worldwide by banks and in international business transactions, and are supported by governments and international organisations, including UNCITRAL. The ICC was therefore invited to comment on the proposed convention, and has expressed serious concerns.
According to the position papers sent by the ICC to UNCITRAL in May this year:
Any changes to the regulatory system should only be made after assessing the actual problems faced by businesses in using electronic contracting.
The new system should also recognise that electronic contracting only differs from normal contracting because of the mechanism used. The principles of international contracting do not need to change.
The changes must work for all sizes of enterprise.
They must take account of the individual needs and business requirements of parties, in an ever-changing technological environment.
The proposed instrument should only look at business-to-business situations, not business-to-consumer.
According to the ICC, an international convention is not the best way to tackle these issues. It argues it is too inflexible and would take too long to bring into effect.
The ICC has therefore canvassed opinion across the world, asking businesses what problems they encounter in negotiating contracts electronically, and what solutions they would prefer.
Following on from this the ICC drafted voluntary rules, called 'E-Terms 2004', to help businesses deal with electronically negotiated contracts. These will be submitted to the UNCITRAL meeting in November, alongside the draft convention.
According to the ICC's Jonas Astrup, "The danger is that people may click themselves into a contract by mistake, and we have to find a way to exclude that possibility. Doubts about the authenticity and validity of electronic signatures must be overcome."
He added, "Our experts are convinced that these uncertainties can be largely overcome by the various solutions that ICC is now developing. We are planning to put E-terms 2004 at the disposal of international traders during the first half of 2004."
