Certainty at last? A 'new' framework for electronic contracting in Singapore

• Author: Eliza Mik
• Position: Assistant Professor, School of Law, Singapore Management University
• Pages: 160-178



















 !∀

160











Eliza Mik

1

Assistant Professor,

School of Law, Singapore Management University

elizamik@smu.edu.sg

Abstract: Singapor e is the first Asian country to accede to the UNCITRAL

Convention on the Use of Electronic Communications in International Contracts. Singapore

is not onl y the first Asian nation to accede to the CUECIC but also the first nation to

implement some of its pr ovisions locally. It is these provisions that are the subject of this

paper. The ETA is significantly wider in scope than the Convention, as it deals not only

with electronic contracting but also with the use of electronic communications i n the public

sector, the liability of network service providers and the re mote authentication procedures.

2

This pa per examines ho w t he provisions transplanted from the Convention interface with

the principles of contract law. Do they create the long-awaited “certainty” in the

controversial field o f e-commerce? As Singapore’s c ontract law is predominantly based on

English common law, the problems discussed herein will be encountered in any legal

system relying on similar principle

1. Introduction

“The more one looks at the legal issues, the less awesome most of them appear, and the

less radical the measures needed to ensure that the law does not unnecessarily impede

e-commerce.”

3

Singapore is the first Asian country to accede to the UN CITRAL Convention o n the Use of Electronic

Communications in International Contracts

4

(“CUECIC” or “Convention”).

5

Upon accession, the

Singaporean Electronic Transactions Act

6

(“ETA” or “Act”) was re-pealed and re-enacted in a modified

version, with effect from 1 July 2 010.

7

The modified E TA retains the framework of the o riginal ETA but

adds or amends certain provisions dealing with electronic contracting to align d omestic e-commerce

regulations with the Convention. Accordingly, Singapore is not only the first Asian nation to accede to

1

. Research on this paper was funded by the Singapore Management University Internal Research Project Grant. The

author remains indebted for the invaluable assistance of Ms Lucia Scheidl-Kornis and Mr Luca Castellani at the

UNCITRAl Library in Vienna.

2

Joint IDA-AGC Review of the Electronic Transactions Act Proposed Amendments, 2009, (“Joint Review”) para

2.16.3.

3

J D Gregory, “Solving Legal Issues in Electronic Commerce” (1999) 32 Can. Bus. L.J. 84 at 85.

4

As adopted on 23 November 2005; the Convention relies on the UNCITRAL Model Law on Electronic Commerce

(“MLEC”), an early e-commerce flagship project dating back to 1996.

5

Singapore acceded to the Convention on 7 July, 2010,

see: www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/2005Convention_status.html; See generally: A

H Boss & W Killian, The United Nations Convention on the Use of Electronic Communications in International

Contracts (Kluwer Law International, 2008) (“Boss & Killian”).

6

Electronic Transactions Act (ETA) (Cap 88, 1999 Rev Ed).

7

www.ida.gov.sg/Policies%20and%20Regulation/20060420164343.aspx

Certainty at last? A “new” framework for electronic contracting in Singapore

161

the CUECIC but also the first nation to implement some of its provisions locally.

8

It is these provisions

that are the subject of this paper. The ET A is significantly wider in scope than the Conventio n,

9

as it deals

not only with electronic contracting but also with the use of electro nic communications in the public

sector, the liability of network ser vice providers and the remote a uthentication procedures.

10

This paper

examines how the provisions transplanted from t he Convention interface with the principles of contract

law. Do they create the long-awaited “certainty” in the contro versial field of e-commerce? As Singapore’s

contract law is predominantly based on Engli sh common law,

11

the problems discussed herein will be

encountered in any legal system relying on similar principles.

The reader will encounter frequent references to “classic” or “traditional” contract la w and “contract

law applying to electronic contracts.” This ter minology is used with great reluctance. It is the very

creation of a division between the “old” and the “new” contract law that is criticized in this paper. The

division itself is by no means intuitive or self-explanatory because the two regimes – one “classic” and

one “pertaining to electronic contracts” – do not exist in parallel. P arallelism would imply the existence of

a clear-cut choice as to which set of rules to apply. As described below, this is not the case. The two

regimes may intersect and interfere with each other, rendering it difficult to analyze the contracting

process whenever it involves an “electronic” method of communication.

1.1 Roadmap

The discussion is divided into t wo parts: general and specific. The general part criticizes the broader

assumptions of the Act and provides the conceptua l frame for everything that follows. The specific part

zooms into the individual provisions and exa mines the e xtent, if any, to whic h they facili tate or interfere

with the analytical fra mework provided by “classic” contract la w. Quotes of e xplanatory notes or

legislative r eports are kept to a minimu m. T hose provisions of the ET A that ar e not dire ctly related to

contract law and have not been copied from the Convention are out of scope. It must be remembered that

irrespective of the business model and the contractual subject matter, most legal questions in e-commerce

are questions of contract law.

12

For present purposes, e-commerce is understood as the use of Internet-

enabled methods of communication to form and perform commercial tran sactions.

13

1.2 Scope: Everything Electronic

An analysis of the definitions in Section 2 sheds light on the potentially wide application of the Act. The

term "electronic," which lies at the heart of all interconnected definitions, relates to technologies having

electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities; "electronic

communication" means any c ommunication made by means of “electronic records.” The latter indicate

records generated, communicated , received or stored by electronic mean s in an infor mation system or for

transmission from one such system to another; "information system" means a system for generati ng,

sending, receiving, storing or otherwise processing electronic records. Interestingly, with the exception of

face-to-face dealings and exchanges of paper letters by traditional mail, all communications at a distance

are ‘electronic’ as they involve the intermediation of an “information system” or so me form of

transmission or storage of an “electronic record. ” With the noted exceptions, all communications at-a-

distance fall u nder the a mbit of the Act. As a result, apart from “facilitating e-co mmerce,” the ETA may

affect transactions that would otherwise not be consid ered “electronic.” A good example is a fax message.

In Australia which enacted a slightly different version o f the ETA in 1999, a fa x “falls within the

8

Singapore was also the first country to enact an Electronic Transaction Act in response to the 1996 Model Law.

9

For a more detailed discussion about the differences between the Convention and the 1998 ETA see: Chong Kah

Wei, Chao Suling, “United Nations Convention on the Use of Electronic Communications in International

Contracts—a New Global Standard” (2006) 18 SAcLJ 116.

10

Joint IDA-AGC Review of the Electronic Transactions Act Proposed Amendments, 2009, (“Joint Review”) para

2.16.3.

11

Singapore follows the common law of contract, see: Application of English Law Act (Cap 7A, 1994, Rev Ed).

12

E A Cavazos, G Morin, Cyberspace and the Law: Your Rights and Duties in the On-line World, (MIT Press 1994,

Cambridge) at p 34; John D. Gregory, supra n 1 at 86.

13

See generally: K C Laudon, C G Traver, E-commerce: Business, Technology, Society (Prentice Hall 2010)