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Posted On: 24 June 2009 08:12 am
Updated On: 12 November 2020 02:09 pm

E-commerce: There is need for a comprehensive law

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The internet system puts more than 200 states in the world in a continual communication mode. The documents and information entered into the internet spread in a few seconds in all the countries which have a connection to the system. The internet was designed basically to be a device for transmitting information and documents on a limited range, but in the nineteenth century, after it became a public device which can be used by anyone, it started to convert into a device for the universal communication and connection and at the same time it became an amazing universal market used to transmit all types of commercial transactions. This progress which happened to the internet give birth to a new field which is known as e-commerce. The e-commerce witnessed a lot of progress and advance and became one of the most active fields in the commercial sector in less than 20 years. The e-commerce provides amazing and wonderful opportunities to every one and the only requirement to enjoy these services is to have a computer connected to the internet. It provides to any person a perfect way to purchase what he needs by providing a wider collection of products and services, wider than what he can get from any other place. Today, you can purchase all the great things that you like to have from shops in Paris or American stores while you are setting in your house behind your computer. In 2007, the e-commerce transactions were estimated at $184bn and it is expected that it will constitute 70 percent of the universal trade in 2010. The need for finding specific legal rules which protect the rights of the users and traders in the internet system became a pressing matter as a result of the huge advance and progress of the e-commerce. A lot of countries and organisations hurried to put into place a specific set of rules to govern the e-commerce transactions, like the UN (United Nations), WTO (World Trade Organisation) and the European Union, and individual countries. France issued its e-commerce law in 2000, the US issued its e-commerce law in 2001, Italy enacted its very abbreviated and general e-commerce law in 1999 and Luxemburg in 2000. In the Arab world, there are some countries which issued e-commerce laws in the past few years such as Tunisia, which was the first Arab country to issue an e-commerce law in 2000, and Jordan issued e-commerce law in 2001 and the Emirate of Dubai issued its code in 2002. The state of Qatar belongs to the group of countries which did not adopt a specified electronic commerce code till now, but that does not mean that there are no commercial transactions which can be concluded through the internet in Qatar or there are no rules that govern the electronic commercial transactions in Qatar at all. Actually, the electronic commercial transactions are a branch of the commercial transactions in general which are regulated in the commercial law, and electronic commercial transactions have to abide by the commercial law of the state of Qatar. The commercial law provides a lot of regulations which regulate all sides of the commercial life. However the e-commerce poses a lot of unique issues which are not regulated in any other law which make the legislator recognise that there are a lot of issues in the e-commerce not covered by legislations which make him work hard to cover these issues by creating a Qatari e-commerce code which should see the light of day very soon. Every country works hard to put its own legislations to govern its commercial transactions. However, the electronic contract is mostly an international contract which is concluded between parties from different countries or includes foreign elements also, and so the question which presents itself here is the law of which country has to apply on this contract. We will present in this paper the problem of the law which has to apply to the electronic contract and we will discuss the applicability of the remedies which are addressed in the choice of law rules in the civil code on the electronic contract. Addressing the problem The problem of the applicable law on the electronic contract will not rise where both of the parties of the contract are in the same country. For example, if the electronic contract was concluded between parties who live in Qatar, the Qatari law will apply in this contract without any doubt. However, the electronic contracts in most cases are international contracts which are concluded between parties from different places. In this case the problem of the law which has to apply on these contracts will arise. The Qatari law regulates the problem of the applicable law on the international contract generally in the choice of law rules in the civil code. Article 27 of the civil Qatari code states that: The law of the state where the contractors common home, is applicable to the contract in term of its substitutive conditions and the resulting effects. If the homeland was different, the law of the state in which the contract is signed becomes in force unless the contractors agreed on another law to be applied on their contract. The estates location law is applicable to the contracts concluded about this real estate. From that article we can recognise that the legislator puts some criteria which show us the applicable law in the international contracts. The First criterion is the agreed law between the parties and if there is no agreement about the law between the parties, it means that the first criterion does not exist. We have to take recourse to the second criterion which is the law of the country of the parties’ common domicile, and if their domicile is located in different countries, we will have to move to the third criterion which is the place in which the contract was concluded. When trying to apply this article on the electronic contract we will recognise that this article is not qualified for applying in the electronic environment. The first criterion can exist in the electronic contract, however, the problem appears where the first criterion does not exist so we have to apply the second and third criteria to the common domicile of the parties and the place of the contract conclusion, which we cannot find them in the electronic transactions. As what is known, the internet is a world without geographical borders and there is no consideration to the time or the place in this world, which makes our task to put our hand on those criteria impossible and none expected. The suggested remedies The inability of the private international law to handle the problem of specifying the applicable law on the disputes which arises from the electronic contracts encourages the scholars to search for other devices and mechanisms to solve this problem. Some of these devices were designed specifically to the internet environment. However, some of them were used in other fields but they were modified to suit the internet environment. Let’s have a quick glance at these remedies or suggestions in the coming few paragraphs. The first suggestion: Putting an electronic unified law A number of scholars support the suggestion of putting a universal law of electronic commerce, which has to be the source for all the international electronic transactions in the world. Such a law will have the privilege of terminating the problem of choosing the law which will apply on the electronic contract. By adopting this approach we will no more need to choose law rules and that by applying this unified law immediately on the disputes which arise from the electronic transactions, things can be made simpler. Moreover, the adopting of an electronic unified law will support the quick advance of the electronic trade which is necessary considering the ongoing nature of the internet, this nature which ignores the borders between countries, whereas the national legislations cannot ignore such borders. Putting an electronic unified law can be reached by one of two approaches: A collective effort from the states to constitute an electronic unified law. In this approach, the states will agree to put to gather a unified law to regulate the electronic transactions. This law has to be universal and not related to a specific place. Through model laws or international conventions, by putting a model law to regulate the electronic transactions concluded through the internet. Such a law has to be put from an international organisation or cooperation which concerns about the e-commerce issues such as the UN or the Internet American Association. The UNICTRAL is one of the universal committees which put an electronic commercial transaction law. The UNICTRAL law was adopted by many countries, however, this law cannot be regarded as an electronic unified law because there are still some countries which did not adopt this model. The second suggestion The second suggestion is unifying the selection of the rule of law by which the applicable law on the electronic transaction will be determined. In this approach we seek to unify the rules of law which led us to the law which has to apply to the transaction. In other words, this approach calls upon unifying the private international law by adopting a unified choice of rules that are qualified to be applied to the internet. This approach requires the intervention of the concerned international organisations and constitutions to put a specific electronic choice of law which has to apply just to the electronic transaction by all the countries. Actually such a law was put by the American Law Institution which put a set of rules to regulate the way by which the people can determine the law which has to apply on the electronic transactions. This suggestion tries to apply the idea of the private international law on the internet environment by creating a resemblance to rules to those which apply on the international contracts. However, in applying such an idea we have to exclude the criterions which are not qualified to apply in choosing the applicable law on the electronic transactions. From those not qualified criterion: The place of concluding the contract. As what we know, the electronic contract concluded through the internet does not recognise the geographical borders. The place of executing the contract. The electronic contract is executed in the internet environment in many cases where the good or the service can be submitted through the internet, such as music and movies, which can be downloaded through the internet. The currency which was used to pay the price.This criterion is not qualified to determine the law which has to apply on the electronic contract, and that because of the using of the credit card and the digital money in most of the electronic contracts. The third suggestion: The electronic arbitration: Some scholars cite the need for a specified arbitral tribunal for the disputes which arise from the electronic transaction. Although the institution of an electronic arbitration system is a sophisticated stage which needs a lot of steps and will take years to be formulated, we can see an organisation which tries to start with a small project as an application of this suggestion, which calls Virtual Magistrate Project. The Virtual Magistrate Project is adopted by an American university called Villanova University, which tries by this project to solve the disputes that arise as a result of the electronic transactions by choosing an arbitrator, who will issue his verdict through the internet after studying the evidences and defences which will be presented to him by the parties through the internet. It is worth mentioning that the electronic arbitral associations did not publish any award related to the electronic transactions disputes therefore, it is not possible to have an electronic arbitration system currently, because of the absence of the judicial system which the arbitrator must be based to make his verdict. The fourth suggestion: The model contracts: Most of the international organisations start to adopt this solution, as the easiest one to solve the applicable problem law on the electronic transactions, by putting a model contract which drafts in a perfect way and cover all the gaps which may raise problems in the electronic contracts. Those contracts basically determine the law which must apply on the disputes which may arise from the electronic transactions so we will not need to use any other criterion to determine the law which shall be applied on the electronic contract or creating any new unified law to be applied on the electronic contracts. Today most of the electronic companies adopt a model contract which was put by one of the international organisations such as, The ABA, American Bar Association. The fifth suggestion: The customs: Customs are things which can be formed by the practice of some usages in the electronic transactions in a continuous manner so it’s become binding rules. Internet users are the authority which make the customs through the practice of some rules and usage in the internet environment in a continuous manner and through a long period of time. Whenever there is a dispute which concerns the application of one of these customs, the custom will apply as a rule of the determined applicable law on the electronic transactions. The custom is not adequate to consider as a source from the sources of the substantive law rules of electronic transactions at the current time, and that because of the newness of the e-commerce. This newness contradicts with the constituting of customs which need a long period of time to be formed.