Michael Geist

Globe and Mail, October 21, 1999, T4

Although thousands of contracts are entered into daily through E-commerce, many Canadian sellers and consumers remain uncertain of the legal implications of clicking the "I Agree" button on a Web site.

But a potential law is quietly emerging, one that could settle the ambiguity surrounding on-line purchases. The Uniform Electronic Commerce Act (UECA) seeks to provide Canada with a legal model for E-commerce transactions.

The Uniform Law Conference of Canada - an organization devoted to harmonizing Canadian law - developed the UECA which deals largely with on-line contracts, and is recommending that provincial and territorial governments enact it.

Although the recommendations are not binding, all provinces were invited to participate in the drafting negotiations. In fact, the UECA faced rejection by the conference if two or more jurisdictions objected to it. Ultimately, only Quebec lodged an objection.

The ball is now in the provinces' court. They should seize the opportunity to provide E-commerce leadership by quickly enacting the UECA into law.

The subject of more than two years of negotiation, the UECA could bring much needed certainty to the world of E-commerce. Based largely on the United Nations Model Code on Electronic Commerce, it clarifies issues such as the enforceability and formation of on-line contracts, the use of electronic agents in the contracting process, and at what point an electronic contract is deemed sent and received.

The governing principle underlying the UECA is the concept of electronic equivalence. Although the act does not deem electronic communications valid (just as with paper documents, legal validity depends upon more than just a document's form) it promises that information will not be denied legal effect or enforceability solely because it is electronic.

The UECA removes any doubt that clicking on an "I Agree" button is indeed valid consent. It stipulates that unless the parties agree otherwise, an offer or acceptance of an offer can be expressed in electronic form by clicking on an icon.

Contracts between an individual and a computer or between two computers also attracted the attention of the UECA's drafters.

The concern in this situation lies with the difficulty of correcting a mistake in an E-commerce transaction. For example, if I inadvertently order 100 copies of a book rather than just a single copy, can I get out of the contract?

The UECA creates an appropriate compromise by ensuring that consumers have an opportunity to review the terms of their contract before it becomes binding. Under the UECA, computer-based contracts are not enforceable if an individual alleges that a mistake has occurred and that individual was not provided with the opportunity to prevent or correct the error (as long as the individual notifies the other party of the mistake and does not profit from it).

One of the most contentious issues faced by the drafters concerned at what point an electronic communication is deemed sent and received.

In the early days of contract law, a postal-acceptance rule was established that deemed a contract accepted the moment the acceptance was mailed.

The UECA seeks to develop an Internet equivalent. An electronic document is deemed sent once it enters an information system outside the control of the originator. For most Internet users, this occurs once their E-mail program actually sends the E-mail (not necessarily when the user clicks "Send").

An electronic document is presumed received by an addressee when it enters his or her previously designated information system. In other words, the recipient does not actually have to retrieve the message but merely be able to do so.

The act is also careful not to compel parties to use electronic communication. In an important deviation from the UN model, the Canadian version provides that nothing in the act requires a person to use or accept information in electronic form without consenting. Consent to use electronic communication, however, may be inferred from a person's behaviour. For example, providing a business card with an E-mail address could be construed as consent; placing an order on the Web could be treated as consent as well.

The UECA is an important initiative that would bring Canada in line with an emerging global standard. Similar legislation has been enacted or proposed in many countries including the United States, Singapore and Australia.

Canada can ill-afford to be left behind on this crucial issue.


Michael Geist is a law professor at the University of Ottawa School of Law specializing in Internet and electronic commerce law. He can be reached by email at mgeist@uottawa.ca and on the Web at www.lawbytes.com.