Electronic Commerce Act

Back to Index


The rapid development of information and communication technologies over the past decade has revolutionized business practices. Transactions accomplished through electronic means - collectively "electronic commerce" - have created new legal issues. The shift from paper-based to electronic transactions has raised questions concerning the recognition, authenticity and enforceability of electronic documents and signatures. The challenge for lawmakers has been to balance the sometimes conflicting goals of safeguarding electronic commerce and encouraging technological development.

The Electronic Commerce Act of 1998 (the "Act") aims to facilitate the development of a secure regulatory environment for electronic commerce by providing a legal infrastructure governing electronic contracting, security and integrity of electronic transactions, the use of digital signatures and other issues related to electronic commerce.

The Act is divided into fifteen parts, which can be summarized as follows:

Part I of the Act outlines the general purpose of the Act, provides definitions for terminology used within the Act and defines the scope of the application of the Act.

Part II of the Act addresses electronic records and electronic signatures generally. It provides that, with limited exceptions, electronic records and signatures should be accorded the same treatment as paper records and signatures for purposes of complying with statutory writing, signature, evidentiary and record-keeping requirements.

Part III of Act addresses the integrity and authentication of secure electronic records and secure electronic signatures. Secure electronic records and signatures define specific categories of records and signatures that are afforded greater evidentiary presumptions because of their enhanced reliability and trustworthiness. The concept of a secure electronic record or a secure electronic signature will foster the growth of electronic commerce by providing businesses with assurances that records and signatures which meet the statutory definitions of "secure" records or signatures will be accorded the heightened evidentiary presumptions necessary to make business transactions effectively nonrepudiable.

Part IV of the Act addresses issues of electronic contracting. This Part deals with the form in which an offer and an acceptance may be expressed and legal recognition of contracts formed in an electronic medium. This Part aims to provide increased legal certainty as to the conclusion of contracts by electronic means.

Parts V, VI, VII, VIII and IX of Act address the legal issues related to the use of digital signatures. Digital signature technology, which utilizes asymmetric cryptography technology, has been developed to facilitate secure transactions over the Internet and other computer networks. Although the electronic contracting sections of the Act have been drafted to be technologically neutral, Parts V-IX have been included to establish rules for the use of the most prominent current technology. Thus, a digital signature issued in accordance with Part V will be presumed to be a secure electronic signature.

Part X of the Act addresses the acceptance and use of electronic records and electronic signatures by governmental entities. This section authorizes any department or ministry to accept electronic filing of documents and to issue permits, licenses or approvals electronically. This section also empowers any department or ministry of the Government to specify the conditions and procedures for electronic filing or retention of documents. However, this section does not compel any department or ministry of the Government to accept or issue any document in electronic form if it does not wish to do so.

Part XI of the Act deals with issues relating to the liability of network service providers.

Part XII of the Act provides criminal penalties for intentional damage or destruction of information systems or data, intentional "trespass" into a system and intentional theft of computer services, tampering with data, interrupting network services and intentionally introducing viruses into computers or computer networks.

Part XIII of the Act contains general provisions relating to the use of electronic records.

Back to Index

Sections 1 to 27

Next Sections 28 to 62