In an attempt to resolve the legal uncertainties that surround many aspects of electronic commerce, the Uniform Electronic Commerce Act (Canada) was developed by the Uniform Law Conference of Canada (“ULCC”) and, in September of 1999, the ULCC recommended it for adoption by provincial legislatures. The Uniform Electronic Commerce Act was modeled on the United Nations Model Law on Electronic Commerce.
Uniform Electronic Commerce Act
The Uniform Electronic Commerce Act attempts to expand some of the basic rules of law to cover documentation and transactions that exist or occur in electronic form. As the UN’s Model Law on Electronic Commerce served as a platform for the Uniform Electronic Commerce Act, the Uniform Electronic Commerce Act has served as its own platform for corresponding provincial legislation. As a result, electronic commerce legislation in Canada is similar in each province and territory, with the exception of Quebec’s An Act to Establish a Legal Framework for Information Technology, which is considerably different than the Uniform Electronic Commerce Act.
Central Features of E-Commerce Legislation
A central feature of the e-commerce legislation in Canada is the principle of “Electronic Equivalence”. E-commerce legislation aims to provide both businesses and consumers with peace of mind that on-line transactions and contracts will be as legally enforceable as ordinary paper based equivalents, provided that specific requirements are met.
- A FUNCTIONAL EQUIVALENCY RULES
The e-commerce legislation establishes several rules that provide the means by which electronic information and documentation will be considered functionally equivalent to their respective paper counterparts:
- i. Legal recognition of electronic information and documents: information or documents, including contracts, are not invalid or unenforceable by virtue of their being in an electronic format.
- ii. Legal requirement that information or documents are in writing: if the document or information is in electronic format, this legal requirement will be satisfied so long as that information or document is accessible so as to be usable for subsequent reference. In addition, where information is required to be provided to another person in writing, it must be capable of being retained by that other person.
- iii. Legal requirement to provide information or document in specified non-electronic form: this requirement will be satisfied when the information in electronic form is accessible, capable of being retained by the recipient and organized in the same or substantially the same form as its paper-part. Essentially, the display of the information should be recognizable as being the form required by law.
- iv. Legal requirement to provide original documents: if there is a reliable assurance as to the integrity of the information (complete and unaltered) contained in the document, and that the information is accessible and capable of being retained by the person for whom the document was intended, an electronic document will satisfy this requirement.
- v. Legal requirement of original signature: if, at the time an electronic signature[[“Electronic signature” refers to information in an electronic format that an individual has created or adopted in order to sign a document, and that is in, attached to, or associated with that document. The electronic signature does not have to “look like” an actual signature, but rather can exist as a sound or symbol, or as code, so long as the intention is clear.]] is affixed to a document, it is reliable to identify the person making it, and there exists a reliable association between the electronic signature and the relevant electronic document, then this method of signing will satisfy the legal requirement. Certain statutes require compliance with any prescribed electronic signature requirements as to methods or information technology standards. To date, there are no regulations prescribing such methods or standards. In certain provinces, there are additional requirements if the document signed is to be presented to a public body.
- B FORMATION AND OPERATION OF CONTRACTS AND THE USE OF ELECTRONIC AGENTS
E-commerce legislation confirms that valid contracts can be formed by means of electronic information or electronic documents, and actions (i.e. clicking or touching a computer icon) to communicate intention (i.e. offer and acceptance). Electronic agents[[“Electronic agent” means a computer program or any other electronic means used to initiate an act or to respond to an electronic document or act without review by an individual at the time of the response or act.in the electronic document or information used in the transaction; (ii) the electronic agent does not give the individual an opportunity to prevent or correct that error; (iii) the individual promptly notifies the other person on becoming aware of the error; and (iv) where consideration is received as a result of the error, the individual takes reasonable steps to return such consideration or destroy the consideration (if so instructed), and the individual has not used or received any material benefit or value from the consideration.]] are permitted to form contracts with individuals, however, such transactions will be unenforceable against the individual if: (i) the individual makes a material error in the electronic document or information used in the transaction; (ii) the electronic agent does not give the individual an opportunity to prevent or correct that error; (iii) the individual promptly notifies the other person on becoming aware of the error; and (iv) where consideration is received as a result of the error, the individual takes reasonable steps to return such consideration or destroy the consideration (if so instructed), and the individual has not used or received any material benefit or value from the consideration.
Although there may not be a legal requirement that an electronic contract be in writing or that it be signed, in order to enforce the contract against the other party, the traditional requirements for enforceable contracts (e.g. offer, acceptance, consideration) will have to be satisfied and, in particular, it will be necessary to ensure that the terms of the contract are clear and unambiguous (and unaltered), and that the signatures are reliable to identify the parties and to indicate a clear intention to be bound.
- C SENDING AND RECEIVING ELECTRONIC INFORMATION
Electronic information or documents are considered sent when they enter an information system outside the sender’s control, or if the sender and addressee use the same information system, then the information is sent when it becomes capable of being retrieved and processed by the addressee. Electronic information or documents are presumed to be received by an addressee when: (i) the information or documents enter the addressee’s information system (used to receive the type of information or documents sent) and they are capable of being retrieved and possessed by the addressee; or (ii) the addressee does not have such a system, but becomes aware of the information or documents in his or her information system, and it becomes capable of being retrieved and possessed by the addressee.
- D EXCLUSIONS
It is important to note that certain documents and contracts cannot be formed electronically, such as wills, and contracts for the purchase and sale of real estate.
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