[Ecommerce] ICC position on UNCITRAL and e-contracting issues
James Love
james.love@cptech.org
Tue Apr 8 02:05:02 2003
-------- Original Message --------
Subject: ICC position on UNCITRAL and e-contracting issues
Date: Tue, 08 Apr 2003 00:56:56 -0400
From: James Love <james.love@cptech.org>
To: random-bits@lists.essential.org
* Such an instrument should concentrate on problems that
arise in the sphere of business-to-business commerce (which is
also UNCITRAL’s traditional mandate), rather than also
encompassing consumer issues.
* ICC believes that it would presently be difficult to realize
these goals within the context of an international convention,
and that a convention such as that proposed in WP 95 would be
premature, for several reasons:
* It could be dangerous to adopt such a convention without
first isolating the specific practical problems, if any, which
business currently faces regarding electronic contracting,
since this would present the risk of not addressing the actual
problems that exist in practice while arguably implying
comprehensiveness.
* The drafting of a convention can take a significant amount
of time, as does the implementation of such a convention into
national law.
* A convention is difficult to amend if specific provisions
of it turn out not to be useful or to create unanticipated
problems.
* ICC is willing to explore the possibility of drafting an
instrument which would assist companies worldwide in providing
increased legal certainly for their electronic contracting.
* ICC is planning to collect views from a representative
sample of international commercial players, drawn from an
appropriate sectoral and geographical cross-section, regarding
the practical problems, which are currently faced in the use
of electronic technology in international commerce. Views
will also be sought as to the type of instrument which might
best assist in providing solutions to such problems.
* Based on these views, ICC could produce an instrument to
guide businesses when contracting electronically.
* 9 April 2003: ICC will hold a meeting in Paris with
representatives of companies engaged in electronic contracting
to gain a more detailed assessment of their views on the need
for further international regulation in their area.
* May 2003: ICC will participate in the meeting of the
Working Group in New York and discuss the proposal further
with members.
* June 2003: ICC will begin drafting of the document.
* October 2003: At the next meeting of the Working Group,
ICC will report on its progress.
* 2004: Work will be completed in time for either the
spring or fall 2004 meetings of the Working Group.
During the drafting process, ICC would consult closely with
the members of the Working Group and the UNCITRAL secretariat
by participating in the Working Group’s meetings, and by e-
mail, telephone, and Internet consultation to keep the members
appraised of its progress and to solicit their input into the
document.
Document 373-35/2v2
Commission on Commercial Law and Practice
Commission on E-Business, IT and Telecoms
ICC position on UNCITRAL and e-contracting issues.
1. Introduction
The International Chamber of Commerce (ICC) is grateful to
UNCITRAL for the invitation to provide views regarding current
UNCITRAL proposals for the legal framework for electronic
contracting.
ICC understands that e-contracting developments within
UNCITRAL currently follow two strands that are not mutually
exclusive. The first is the proposal to produce a draft
convention relating to electronic contracting (set forth in UN
Document A/CN.9/WG.IV/WP.95), and the second is a proposal to
draft an “omnibus” convention to remove barriers to e-commerce
in existing international conventions caused by writing and
form requirements (set forth in UN Document
A/CN.9/WG.IV/WP.94).
The purpose of this paper is to outline how ICC as the world’s
leading international business organization, with long
experience in self-regulatory rule-making, might assist the
UNCITRAL Electronic Commerce Working Group in its current
work, and how such cooperation might work in practice.
2. ICC’s Role in Business-Based Rule-Making
Since its inception, ICC has facilitated the creation by
business of commercial rules which have become part of the
legal fabric of international commerce. Examples of ICC rules
include ICC's Uniform Customs and Practice for Documentary
Credits (UCP 500, the rules that banks apply to finance
billions of dollars worth of world trade every year) and ICC’s
International Commercial Terms (Incoterms 2000, standard
international trade definitions used every day in countless
thousands of sales contracts). ICC also drafts model
contracts, which give parties a neutral framework for their
contractual relationships, and which are drafted without
expressing a bias for any one particular legal system. Major
intergovernmental organizations (IGOs) such as UNCITRAL,
UN/ECE and the World Bank endorse and actively support the use
of several such ICC rules.
ICC model contracts and clauses, uniform rules and voluntary
codes are elaborated after extensive consultation with
business worldwide. They provide practical and efficient
tools to facilitate international business transactions – for
the benefit of both businesses and their governments. ICC has
members in over 140 countries worldwide, and the drafting of
business rules by ICC is based on global participation.
ICC and its members continue to update and revise the ICC rule
base to make sure it reflects current business practices in a
fast changing business environment. An example of how ICC
approaches these issues is the eUCP, a response to the growing
number of electronic documents being used in international
trade.
The eUCP is the electronic supplement to UCP 500. The 12
Articles of the eUCP work in tandem with UCP 500 where
electronic presentation of documents occurs. They cover a
range of issues common to electronic documents, including
format, presentation, originals and copies and examination of
electronic records. They also contain highly useful
definitions of terms – such as “appears on its face” or “place
for presentation” – that have different meanings in the paper
and electronic worlds.
GUIDEC and GUIDEC II are other examples of ICC guidelines for
electronic transactions. The GUIDEC framework deals with the
use of digital signatures and the role of certification
authorities. GUIDEC enhances the ability of the international
business community to execute trustworthy digital transactions
utilizing legal principles that promote reliable digital
authentication and certification practices.
3. Scope and Format of an E-Contracting Instrument
Following consultation with its electronic commerce and
commercial law and practice experts, ICC believes that the
following principles should guide any work on the
international legal framework for electronic contracting:
· It should be based on a careful assessment of need. Thus,
ICC believes that before making a decision on the scope and
format of any initiatives in this field, there is a need to
carefully consider and analyze what problems do international
commercial players currently face in using electronic
contracting, if any, and how they best can be solved.
· It is important that any instrument should avoid giving
the impression to the international commercial community that
electronic contracting is in some fundamental manner different
from international contracting conducted through other media.
It is true that the Internet may well raise certain specific
questions, which have not arisen before in quite the same way.
It is equally true, however, that international commerce has
over many years adapted with remarkable speed and pragmatism
to other technological advances without re-visiting the
fundamentals of international commerce. It thus follows that
a new instrument should provide solutions to media-specific
problems, rather than a comprehensive code for international
commerce on the Internet.
· It is important that any instrument be as useful,
practical and affordable for large international commercial
entities as for small or medium-sized entities. An instrument
addressed solely towards the former may be unsuitable for the
latter, and one directed solely towards the latter may
substantially reduce its utility.
· Any instrument should be based on the contractual autonomy
of the parties who will, through an assessment of their own
needs, risks and experience, be able to organize their
commercial dealings within an electronic environment in a
manner which best suits their expectations and requirements.
These requirements will change from customer to customer and,
given the speed of technological advance, from time to time.
· Such an instrument should concentrate on problems that
arise in the sphere of business-to-business commerce (which is
also UNCITRAL’s traditional mandate), rather than also
encompassing consumer issues.
ICC believes that it would presently be difficult to realize
these goals within the context of an international convention,
and that a convention such as that proposed in WP 95 would be
premature, for several reasons:
· It could be dangerous to adopt such a convention without
first isolating the specific practical problems, if any, which
business currently faces regarding electronic contracting,
since this would present the risk of not addressing the actual
problems that exist in practice while arguably implying
comprehensiveness.
· The drafting of a convention can take a significant amount
of time, as does the implementation of such a convention into
national law.
· A convention is difficult to amend if specific provisions
of it turn out not to be useful or to create unanticipated
problems.
These considerations do not necessarily mean that there is no
need for an international legal framework for electronic
contracting, but that such a framework must focus on actual,
practical problems specific to the electronic medium, that it
must be flexible, and be capable of being adopted swiftly.
4. Possible ICC Work on Electronic Contracting
ICC is willing to explore the possibility of drafting an
instrument which would assist companies worldwide in providing
increased legal certainly for their electronic contracting.
Such work would concentrate on issues specific to the
electronic medium. ICC is currently seeking to identify the
critical media-specific issues that are most important to
businesses in relation to electronic contracting.
Based on preliminary investigations, the following appear to
be examples of such issues:
· When does an offer “reach” the offeree? Under most
existing legal instruments an offer becomes effective when it
reaches the offeree, and may be withdrawn if the withdrawal
reaches the offeree before or at the same time as the offer.
However, in an electronic context with EDI messages, e-mails,
Instant Messaging (IM) and communication via web sites it is
not always clear exactly when a message has reached the
addressee.
· Buyers and sellers are often faced with requirements to
give the other party notice of certain events or situations.
In an electronic context questions arise in terms of form
requirements to such notices. Can a party for instance give
notice by using a GSM phone and Short Messaging System (SMS)?
Will an e-mail in all cases be considered a valid notice?
· The risk of making mistakes may be higher in an electronic
context as it seems easier for a contracting party to
accidentally click the wrong button rather than signing a
document by mistake. On the other side, electronic
applications provide better possibilities for validating data,
which can prevent misunderstandings due to missing or unclear
information such as for instance amounts, dates and times.
It would be premature at this time to decide precisely which
regulatory vehicle would be most appropriate for the
resolution of issues such as these. However, ICC is planning
to address them through the following steps:
· ICC is planning to collect views from a representative
sample of international commercial players, drawn from an
appropriate sectoral and geographical cross-section, regarding
the practical problems, which are currently faced in the use
of electronic technology in international commerce. Views
will also be sought as to the type of instrument which might
best assist in providing solutions to such problems. In
particular, ICC will hold a meeting in the beginning of April
2003 with business representatives. ICC hopes to be in a
position to provide UNCITRAL with the conclusions from this
meeting at the 41st Session of the UNCITRAL Working Group at
the beginning of May 2003.
· Based on these views, ICC could produce an instrument to
guide businesses when contracting electronically. It must be
stressed that the exact scope and format of this instrument
will depend on the analysis mentioned above, but could include
some combination of the following: 1) a guidance document on
how to structure electronic contracts so as to ensure their
probity; 2) a set of uniform customs and practices which
businesses could incorporate, either directly or by reference,
into their electronic contracts or electronic contracting
practices; or 3) model clauses or contracts to be used in the
electronic medium.
Such an exercise by ICC would have the following advantages as
compared to a convention:
· It could be finished more quickly, and would thus be
available for use by business more swiftly.
· It could be used more flexibly; i.e., a company could
decide to use the ICC instrument in all its electronic
contracting, only in certain electronic contracts, or not at
all.
· It could be amended more swiftly if problems were to arise
with specific provisions.
It should be emphasized that ICC would not perform this work
in isolation, but would need to consult extensively with the
members of the UNCITRAL Working Group in drafting it. If,
after promulgation of a business self-regulatory instrument,
the Working Group felt a convention or another type of legal
mechanism, was a desirable way to address additional issues,
the assessment conducted in relation to the self-regulatory
initiative would nonetheless help to define the appropriate
scope of such instrument.
5. Timeline
ICC believes that it would be premature to base its work on an
inflexible time schedule, since it is difficult to foresee now
the exact progress of the work. However, based on its
experience with similar projects, ICC believes that the
following is a realistic time-frame for the work:
· 9 April 2003: ICC will hold a meeting in Paris with
representatives of companies engaged in electronic contracting
to gain a more detailed assessment of their views on the need
for further international regulation in their area.
· May 2003: ICC will participate in the meeting of the
Working Group in New York and discuss the proposal further
with members.
· June 2003: ICC will begin drafting of the document.
· October 2003: At the next meeting of the Working Group,
ICC will report on its progress.
· 2004: Work will be completed in time for either the
spring or fall 2004 meetings of the Working Group.
During the drafting process, ICC would consult closely with
the members of the Working Group and the UNCITRAL secretariat
by participating in the Working Group’s meetings, and by e-
mail, telephone, and Internet consultation to keep the members
appraised of its progress and to solicit their input into the
document.
--
James Love, Director, Consumer Project on Technology
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040
--
James Love, Director, Consumer Project on Technology
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040