Business & UN

Business endorses UN convention on electronic contracting

  • 19 June 2006

The International Chamber of Commerce (ICC) supports the recently-concluded United Nations Convention on the Use of Electronic Communications in International Contracts as a useful reform to spur development of cross-border online commerce in the developed and developing world.

The convention is open for signature by UN member states until 16 January 2008, and will be a focus of the opening of the 39th session of the UN Commission on International Trade Law (UNCITRAL), to be held in New York from 19 June to 7 July 2006.

ICC participated in the drafting of the convention through a joint task force of its Commission on Commercial Law and Practice and Commission on E-Business, IT and Telecoms, by furnishing expert input and sharing business experiences on electronic transactions. ICC also published its ICC eTerms 2004 as a self-regulatory complement to the convention. ICC eTerms 2004 are a set of articles which parties can incorporate into the document that make it clear they intend to agree to a binding electronic contract.

Speaking on the first day of the UNCITRAL session, Christopher Kuner, one of the leaders of the ICC expert group, said: “We welcome the enhanced legal certainty and support for party autonomy which the convention provides. It supplies the legal foundation for self-regulatory instruments, such as ICC eTerms 2004. The other good news is that it allows for electronic communications to satisfy the requirements of other conventions, without the need for those conventions to be re-negotiated.”

The convention requires signatory countries to recognize the legal validity of electronic communications used in contracts, and also supports the principle of party autonomy in electronic contracting. It contains provisions dealing with issues that commonly arise in electronic agreements, such as location of the parties, information and form requirements, time and place of dispatch and receipt of electronic communications, invitations to make offers, and errors.

In addition, the UNCITRAL agreement allows electronic communications to satisfy the requirements of other international conventions. As a result, companies and traders around the globe will get important reassurance from the convention that electronically-negotiated contracts are as valid and binding as paper-based versions.

“This convention has a number of articles that strengthen the legal validity of electronic transactions, particularly in developing countries and will help boost e-commerce in those developing countries which ratify it,” Mr. Kuner said.