United Nations Convention on the Use of Electronic Communications in International Contracts (New York, 2005)
Date of adoption: 23 November 2005
Entry into force: 1 March 2013
The Electronic Communications Convention aims at facilitating the use of electronic communications in international trade by assuring that contracts concluded and other communications exchanged electronically are as valid and enforceable as their traditional paper-based equivalents.
Why is it relevant?
Certain formal requirements contained in widely adopted international trade law treaties, such as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") and the United Nations Convention on Contracts for the International Sale of Goods (CISG) may pose obstacles to the wide use of electronic communications. The Electronic Communications Convention is an enabling treaty whose effect is to remove those formal obstacles by establishing equivalence between electronic and written form. Moreover, the Electronic Communications Convention serves additional purposes further facilitating the use of electronic communications in international trade. Thus, the Convention is intended to strengthen the harmonization of the rules regarding electronic commerce and foster uniformity in the domestic enactment of UNCITRAL model laws relating to electronic commerce, as well as to update and complement certain provisions of those model laws in light of recent practice. Finally, the Convention may provide those countries not having yet adopted provisions on electronic commerce with modern, uniform and carefully drafted legislation.
The Electronic Communications Convention builds upon earlier instruments drafted by the Commission, and, in particular, the UNCITRAL Model Law on Electronic Commerce and the UNCITRAL Model Law on Electronic Signatures. These instruments are widely considered standard legislative texts setting forth the three fundamental principles of electronic commerce legislation, which the Convention incorporates, namely non-discrimination, technological neutrality and functional equivalence.
The Convention applies to all electronic communications exchanged between parties whose places of business are in different States when at least one party has its place of business in a Contracting State (Art. 1). It may also apply by virtue of the parties' choice. Contracts concluded for personal, family or household purposes, such as those relating to family law and the law of succession, as well as certain financial transactions, negotiable instruments, and documents of title, are excluded from the Convention's scope of application (Art. 2).
As noted above, the Convention sets out criteria for establishing the functional equivalence between electronic communications and paper documents, as well as between electronic authentication methods and handwritten signatures (Art. 9). Similarly, the Convention defines the time and place of dispatch and receipt of electronic communications, tailoring the traditional rules for these legal concepts to suit the electronic context and innovating with respect to the provisions of the Model Law on Electronic Commerce (Art. 10).
Moreover, the Convention establishes the general principle that communications are not to be denied legal validity solely on the grounds that they were made in electronic form (Art. 8). Specifically, given the proliferation of automated message systems, the Convention allows for the enforceability of contracts entered into by such systems, including when no natural person reviewed the individual actions carried out by them (Art. 12). The Convention further clarifies that a proposal to conclude a contract made through electronic means and not addressed to specific parties amounts to an invitation to deal, rather than an offer whose acceptance binds the offering party, in line with the corresponding provision of the CISG (Art. 11). Moreover, the Convention establishes remedies in case of input errors by natural persons entering information into automated message systems (Art. 14).
Finally, the Convention allows contractual parties to exclude its application or vary its terms within the limits allowed by otherwise applicable legislative provisions (Art. 3).
Relation to private international law and existing domestic law
Whether the Convention applies to a given international commercial transaction is a matter to be determined by the choice of law rules of the State whose court is asked to decide a dispute ( lex fori). Thus, if the rules of private international law of that State require the application of the substantive law of a Contracting State to the resolution of the dispute, the Convention will apply as law of that Contracting State, irrespective of the court's location. The Convention is also applicable if the parties to the contract have validly chosen its provisions as the law applicable to the contract.
Moreover, States may also consider adopting the provisions of the Convention at the domestic level. Such decision would promote uniformity, economizing on judicial and legislative resources as well as further increasing certainty in commercial transactions, especially in light of the diffusion of mobile devices for electronic transactions. It is particularly recommended for those jurisdictions that have not yet adopted any legislation on electronic commerce. Otherwise, purely domestic communications are not affected by the Convention and will continue to be governed by domestic law.
Becoming a Party to the Convention has no financial implications and its administration at the domestic level does not require any dedicated body. Furthermore, no mandatory reporting requirement arises from the adoption of this treaty.
The Electronic Communications Convention is accompanied by an explanatory note.