Dr.

Ram Manohar Lohiya National Law

University

Project Work

Conflict of Laws
E-contracts and Conflict of Laws

Submitted To-

Submitted by-

Dr. Prem Kumar Gautam

Utkarsh Kumar

(Asst. Professor in law)

VIII Semester
B.A. LL.B. (Hons.)
Roll No. - 145

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TABLE OF CONTENTS
1. Topic............................................................................................................................................3
2. Research Methodology...............................................................................................................3
3. Hypothesis..................................................................................................................................3
4. Introduction................................................................................................................................3
5. What Is E-Commerce? ...............................................................................................................5

Categories of E-Commerce..................................................................................................6

6. A Brief History of Consumer Contracts In Private International Law........................................7

Status of A Server................................................................................................................8
Formation of Contracts........................................................................................................9

7. Consumer Contracts in E-Commerce and Private International Law........................................10

Dilemma Of Party Autonomy............................................................................................10

Targeting And Parties' Purpose.........................................................................................11

8. Jurisdiction in Business-To-Consumer E-Commerce Contracts..............................................12

9. Jurisdiction in Electronic Consumer Contracts: The Rule-Based Approach In the Brussels I
Regulation......................................................................................................................................12
10. Jurisdiction in Business-To-Business E-Commerce Contracts...............................................14
11. Appraisal of the Brussels I Regulation....................................................................................14
12. Out-Of-Court Jurisdiction.......................................................................................................15

Possible Benefits................................................................................................................15
Out-Of-Court Dispute Settlement In Europe....................................................................17

13. United Nations Convention on the Use of Electronic Communications in International

Contracts (New York, 2005)..........................................................................................................18

Relevance..........................................................................................................................18
Key Provisions..................................................................................................................18
Relation to Private International Law and Existing Domestic Law..................................20

Conclusion.....................................................................................................................................20
Bibliography..................................................................................................................................22

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TOPIC: E-contracts and Conflict of Laws

RESEARCH METHODOLOGY:
Doctrinal method, i.e. collection of data from primary as well as through secondary
sources, will be used for the preparation of the project.
For the said method, author will cover important national and international legal
documents, judicial pronouncements, opinion of different jurists on the topic, etc.
Also, recent debate(s) (if any) on the said topic will be tried to be included in the

project to provide the latest development on the chosen topic.

The project will also contain authors personal views along with references and legal
position regarding the subject at hand.

HYPOTHESIS:
The basic premise with which the researcher has initiated the research for the project is that
conflict of laws issues arise frequently in the e-contracts. Therefore there is need for proper
understanding of the interplay between these two streams. Also it is implicit for one to resort
to the conflict of laws in cases of e-contracts where there are individuals of from various
states may be involved. With this premise in mind, the researcher has initiated the project and
may well reach to new understandings regarding the topic in hand.
INTRODUCTION:
Consumer cross-border access to justice has become a hotly debated topic in the
contemporary world, especially with the contribution and influence of e-commerce.
International business transactions are described in the form of an international contract,
containing the objective(s) and commitments of each of the parties involved and the terms
which govern the transaction. When parties from different countries enter into a contract, they
are governed by international contract law unless they agree to abide by the laws of one of
the countries. International contract law is a branch of private international law. This type of
law is frequently applied to as international sales law. International sales contracts are
governed by the United Nations Convention on Contracts for the International Sale of Goods
(CISG) from 1980. The purpose of the CISG is to provide a regime for contracts for the
international sale of goods. The Convention is developed to promote commercial exchanges
between private parties. In history, merchants developed their own sort of international
contract law. Traders wanted to deal despite differences in languages, culture and laws
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developed their own code for international transactions. These rules have evolved into the
contract laws of today.
The development of information communication technology in particular creates a borderless
cyber market, which enables consumers to have easy, convenient and low cost contact with
businesses internationally. Frequent online business-to-consumer transactions challenge the
traditional private international law, rendering it an obstacle which discourages the
confidence of both parties and prevents the further development of consumer oriented ecommerce. Consumer protection is no longer merely a domestic concern, but becoming an
issue in private international law, especially in the age of electronic commerce. It is more
important to establish appropriate private international law rules for e-consumer contracts,
which should provide sufficient protection to the consumers and encourage development of
electronic business-to-consumer commerce.

WHAT IS E-COMMERCE?
It is a rather difficult task to provide a precise definition of the term e-commerce. The
literature on this subject contains various descriptions, ranging from broad and extensive to
rather concise and simple formulations.1 In the following lines there will mention a number of
such definitions with a view to provide an as accurate as possible picture.
In a paper published by the European Commission in order to describe the nature of ecommerce and to identify several issues on this area, the definition used includes:
any form of business transaction in which the parties interact electronically
rather than by physical exchanges or direct physical contact.2

1 Features - International Jurisdiction in European Union E-Commerce Contracts available at

http://www.llrx.com/features/eu_ecom.htm#b8-9
2 European Commission, Electronic Commerce-An Introduction,
athttp://www.ispo.cec.be/ecommerce/answers/introduction.html.
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Meanwhile, the Ministry of Economic Affairs of the Netherlands published in 1998 a policy
paper designed at expanding and improving the use of e-commerce. This plan refers in its
turn to electronic commerce as covering:
all business transactions that are carried out electronically with a view to
improving the efficiency and effectiveness of market and business processes.3
One of the most concise definitions for e-commerce, specific for the dynamic world of
business, has been suggested by Mr. A.P. van Kerckhoven, product development-manager at
World Online International, formerly a leading Dutch Internet provider:
E-commerce is the use of telecommunication and computers in order to support
trade.4
From the aforementioned definitions one may infer a number of factors that seem to appear
on more than one occasion:
Firstly, e-commerce presupposes the existence of a business transaction. Secondly, the parties
to such a transaction will maintain contact through electronic means rather than conventional
ways of communication. Lastly, e-commerce is designed at creating a more efficient business
environment.
Having established that, it is quite obvious that e-commerce is not limited to Internet. It rather
includes all business transactions carried out through electronic means; such is the case, for
instance, with the so-called Electronic Data Interchange transactions (EDI), developed in
the 1980s in order to support transactions between suppliers and customers, or with
teleshopping and pay television. Nevertheless, e-commerce has known a remarkable
expansion only with the establishment of the Internet as a communication protocol available
on a large scale.5 The project tries to cover in addition to the basic understanding and interlay
of the conflict of law issues in e-contracts also the jurisdictional issues arising out of
contracts concluded through Internet, which indeed is one of the fastest growing
3 The Ministry of Economic Affairs of the Netherlands, Electronic Commerce Action Plan, The
Hague, March 1998, p. 7, at http://www.minez.nl/.
4 Id.
5 Supra Note 1
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environments where e-commerce is being conducted. In fact, in a definition of e-commerce

recently used in a working paper of the European Commission, it is only the Internet that is
mentioned as the medium where transactions are being concluded:
E-commerce, the buying and selling of goods and services using the Internet.6
Categories of E-Commerce
Electronic transactions may be concluded between various parties: Private enterprises,
consumers or public authorities. Depending on the parties participating in the transaction, ecommerce can be subdivided in four distinct categories7:
(i) Business to business transactions involving performance against payment or
performance against performance (for example when one party supplies statistical
data in exchange for the results of a market research).
(ii) Business to consumer transactions involving the purchase of products by
individuals outside their trade or profession. An additional term used to describe
this category is electronic retailing.
These first two categories may also be classified under the heading electronic trading.
(iii) Business to administration transaction is a category that finds itself in an
incipient stage. It involves commercial relations between companies and public
bodies, for example following a government procurement contract.
(iv) The consumer to administration category has only recently emerged and is of
a rather limited application. However, one can imagine that a certain degree of
efficiency and effectiveness can be added to government activities if a number of
such operations will be concluded on-line (for example in welfare payments or tax
matters).
.
BENEFITS AND PROBLEMS

OF

E-CONTRACTS

6 European Commission, working paper E- Europe, an Information Society for All,

athttp://europa.eu.int/comm/information_society/eeurope/objectives/area03_en.htm. (last accessed on
15.03.2015)
7 European Commission, Electronic Commerce-An Introduction, at
http://www.ispo.cec.be/ecommerce/answers/introduction.html. (last accessed on 15.03.2015)
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E-commerce separates a single action into different stages and each could happen in different
places. For example, when a business sends a consumer a digital product by email, the email
will be originally stored in the server of the consumer's mailbox, which is located in state A;
the consumer could then download it to his computer, which is in state B; the consumer may
not open it directly, but take the laptop to state C, where he opens the mail and uses the
digital product. Or the consumer might have different email addresses and for the sake of
convenience, the consumer uses one email address located on the server in state D to
download all the incoming messages from other addresses. In this case, the outgoing email
will be first stored in state A, then transferred to and stored in state D. It is not wise to take
the location of an 'action' as the nexus, for it may occur in more than one forum.8
Status of a Server
The internet cannot run without the participation of a server, which acts as an intermediary to
facilitate communications between internet users. A server is a computer used to host
websites, mailboxes and relevant data messages. A server plays an important role in ecommerce. It acts as the 'storage' of an e-company, hosting all digital products. It is the place
where online stores are physically located, where the digital subject matter is technically
delivered, and where the parties' electronic agents are located. However, the status of a server
is uncertain. On the one hand, it does play an important role in electronic transactions, since
almost all internet transactions have to be carried out through the server. On the other hand, it
is not clear whether this technically important role is also substantially significant in private
international law. In many cases, a server only holds fortuitous and superficial connections to
a transaction. It functions as no more than a medium of communication, such as a telex
machine in traditional commerce, which undermines the idea of giving too much weight to
the location of the server when deciding private international law issues. A business can
frequently change its server or adopt more than one server for its commercial activities. For
example, it can use one server to host its website and another for a mirror site, in order to
provide quicker access to a larger amount of consumers. A business can also use one server to
host its website, a second server to receive orders and payments and a third server to store
and upload digital products. The server used to host the website can simply be chosen
randomly, and only provides technical support without any decision making, responsibility or

8 Ibid
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autonomy. E-commerce brings a new question as to whether a server can contribute as a new
connecting factor for the conflict of laws in e-commerce.9
Formation of Contracts
E-commerce also brings challenges to the formation of contracts. An e-contract will be
concluded not only in different form, but also by different procedure, which raises specific
questions as to its validity. This issue is important in the conflict of laws because it
determines the validity of a choice of law or choice of forum clause. From a private
international law perspective, the validity of a contract or contract terms can be addressed
either by the choice of law approach or by the uniform law approach. If adopting the first
option, the potential difficulty is that where the relevant system of law designated by the
choice of law rule has no updated legislation for e-contracts, the contract might be
unreasonably invalidated irrespective of both parties' intention. If adopting the second
option," it is questionable as to how the uniform rules could be established to regulate econtracts and whether this compromise could be reached by different countries.10
CONSUMER CONTRACTS IN E-COMMERCE AND PRIVATE INTERNATIONAL LAW
Consumer contracts and e-commerce have brought new issues for private international law.
Private international law problems become more complicated in electronic consumer
contracts. Special consideration has to be established to protect consumers as the weaker
party in private international law. Additionally these specific rules have to be updated to be
applicable in e-commerce. The characteristics of consumer contracts make some potential
solutions for e-commerce unreasonable; while the specific nature of e-commerce makes some
effective methods for consumer contracts problematic. 11
Dilemma of Party Autonomy
Although e-commerce challenges traditional private international law rules, one private
international law doctrine, party autonomy, escapes the difficulties generated by e-commerce.
Party autonomy has been favoured especially in e-commerce, for it can easily avoid the
difficulty of localisation and identification brought by e-commerce." Most recent private
9 Ibid
10 Ibid
11 Supra Note 9
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international law legislation has placed the doctrine of party autonomy in a primary position,
by recognising the parties' choice of law and choice of court agreements. However, this
doctrine works properly anywhere except in contracts with an inequality of bargaining power,
including consumer contracts, where party autonomy could easily provide unfair results and
deprive consumers of their rights." The effect of party autonomy has been widely restricted in
consumer contracts, which brings more uncertainty and difficulties to consumer contracts
than other commercial con-tracts in e-commerce.12
Targeting and Parties' Purpose
Since ordinary conflicts rules cannot work properly in consumer contracts, some
jurisdictions, such as the EU, provide protective conflicts rules, where the default forum for a
consumer dispute shall be the forum of the consumer's home state and the default applicable
law is the law of the consumer's home country. These protective conflicts rules would
damage a business's reasonable expectation if, by any reasons, the business cannot foresee
being subject to the jurisdiction and system of law in a particular country. The normal
approach to balance the interest of consumers and the expectation of businesses is to establish
a scope to preclude some consumers from being protected. In most cases, the scope is
established according to the activities of a business. If the business targets its consumers in a
particular country the business should be subject to the protective rules which either assign
jurisdiction to that state or apply the national law of that state to govern the con-tracts." The
problem is that what constitutes 'targeting' will be hard to decide in e-commerce. The
international characteristic of e-commerce makes a website accessible in every country where
the internet access is available. It is problematic if this can be understood as 'targeting'. In email trading, a business cannot reasonably know exactly which states an email would reach
by sending group emails, because the e-mail address sometimes would provide nil or
misleading information as to the recipient domicile or habitual residence.13
JURISDICTION IN BUSINESS-TO-CONSUMER E-COMMERCE CONTRACTS
As already highlighted in the preceding part of the project, approximately one third of todays
world e-commerce is conducted between businesses and consumers. Due to the rapid growth
12 Ibid
13 Oren, Joakim ST, International Jurisdictions over Consumer Contracts in E- Europe available at
http://www.jstor.org/stable/3663332?seq=1#page_scan_tab_contents (last accessed on 15.03.2015)
Page 9 of 21

of the numbers of private households connected to Internet, one can reasonably expect that
this percentage will continue to increase. Under these circumstances, the question arises
which court has jurisdiction to try international conflicts arising from consumer contracts
concluded through Internet. Will the same rules applicable to conventional consumer
contracts apply? Or should other considerations be taken into account?14
A necessary distinction
In answering this question, one legal peculiarity posed by e-commerce must be understood.
To be more precise, a basic distinction has to be made according to the nature of the
obligation to be performed. As a consequence, one may identify some categories of ecommerce out of which two main categories are: On one hand there is the trade with physical
goods and services and, on the other hand, the trade with electronic materials (software,
images, voice, text etc.). This basic distinction leads to a further division of e-commerce
contracts: In the former case, the Internet is being used as the medium to communicate and
sometimes to even conclude a contract, while in the latter event the Internet represents the
place where the performance takes place. In other words, while in the first case the contract is
concluded by using electronic means but the performance takes place outside the electronic
environment, in the second instance the whole transaction, from the moment an offer is being
made and until the obligation in question is being performed, can be located on the same
network.15
JURISDICTION IN ELECTRONIC CONSUMER CONTRACTS: THE RULE-BASED APPROACH IN
THE BRUSSELS I REGULATION
The Brussels Regime is a set of rules regulating which courts have jurisdiction in legal
disputes of a civil or commercial nature between individuals resident in different member
states of the European Union (EU) and the European Free Trade Association (EFTA). It has
detailed rules assigning jurisdiction for the dispute to be heard and governs the recognition
and enforcement of foreign judgements.
This is a revised version of the 1968 Convention on Jurisdiction and the Enforcement of Civil
and Commercial Judgements (hereinafter the Brussels Convention), due to enter into force
14 Ibid
15 Supra Note 1
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on 1st of March 2002 between all Member States of the European Union with the exception
of Denmark. This step is being pursued as a result of the inclusion of the subject-matter of
this instrument, namely recognition and enforcement of foreign judgements in civil and
commercial matters, in the home and justice affair pillar of the European Union. Besides the
interests in more uniformity of law, the reason that prompted the adoption of an updated
version of the Brussels Convention has to do also with the appearance of new forms of
commerce nonexistent in 1968, one of them being of course e-commerce.16
The regulation maintains in article 2 the general jurisdictional rule according to which
defendants domiciled in one of the Contracting states shall be sued at the place of their
domicile. However, just like the initial Brussels Convention, the act contains special
jurisdictional rules for consumer contracts, that is to say for contracts concluded outside a
trade or profession. Therefore, according to article 16 of the regulation, a consumer domiciled
in a Contracting state has the choice of suing the other party either before the court of the
place of his or her domicile or in the Contracting State where the other party is domiciled.
The question that arises is whether e-commerce contracts, whereby the offer is not directed
specifically to the country of the consumer but rather to a global audience, can be included in
this category. In other words, can a company from the Netherlands selling products through
an interactive web-site reasonably expect to be sued in any of the Contracting states where
consumers are domiciled?17
The solution offered by the new Brussels regulation does not leave place for any doubts;
accordingly, the drafters of this legal act have chosen to allow for the prevalence of
consumers interests at the detriment of the industry. The language used in article 15 (1) c is
thus very clear in stating that jurisdiction is covered by this section when:
... the contract has been concluded with a person who pursues commercial or
professional activities in the Member State of the consumers domicile or, by any
means, directs such activities to that Member State or to several countries
including that Member State, and the contract falls within the scope of such
activities.

16 Ibid
17 Ibid
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Moreover, the former condition included in article 13(3) b of the original Brussels
Convention according to which the consumer has to take the necessary steps for the
conclusion of the contract in the State of his or her domicile has been omitted from the new
text. As a result, one could reasonably expect that, as long as a consumer has his or her
permanent domicile on the territory of a Contracting state, the e-commerce contract can be
concluded not only from this domicile in one of the Union states, but also while the person in
question is on a business trip to, let us presume, Japan. Of course, in such a case one
condition is that the web-site where the goods or materials are being advertised would be
available in the Contacting State where the consumer has his or her domicile.18
It should be also noted that in order to trigger the protection of these jurisdictional rules the
fact whether the object of transaction is physical goods or services or electronic materials is
irrelevant. The only two conditions that make article 15 applicable are domicile in one of the
Contracting States and conclusion of the contract outside the trade or profession.
As a consequence, the answer to the above mentioned hypothetical question would be that,
indeed, an Internet company based in the Netherlands could reasonably expect to be sued in
any of the Contracting states where its web-site is available. The only way to avoid such a
situation is to clearly state that the products are not intended for a certain market.
JURISDICTION IN BUSINESS-TO-BUSINESS E-COMMERCE CONTRACTS
If consumers enjoy a privileged status, the rules applying to contracts concluded in the
framework of a trade or profession, the so-called business-to-business contracts, are of a
different nature. In fact, the revised version of the Brussels Convention does not provide
specific jurisdictional rules to be applied when concluding an e-commerce business-tobusiness contract. As a consequence, the project attempts in the following part to provide
several solutions based on the already existing rules.19
APPRAISAL OF THE BRUSSELS I REGULATION
The main jurisdictional rule of the Brussels Convention, preserved in the recently adopted EC
Council regulation, states that defendants domiciled in a Contracting state, whatever their
nationality, shall be sued in the courts of their place of domicile (Art. 2). If, however, the
18 Ibid
19 Ibid
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defendant is domiciled in a third country, then the respective national rules of each of the
Contracting states will apply (art. 4). Since business-to-business contracts are concluded
mainly by companies or legal persons, the act refers us to the new article 60 for the definition
of the term domicile as applicable to these parties. In accordance to this latter provision, the
domicile is to be established having due regard, alternatively, to the place where the company
or the legal person has its statutory seat, central administration, or principal place of
business.20
The problem that appears when dealing with e-commerce is that seldom these co-ordinates
are rather difficult to be established. Since these three criteria are alternative, the finding of
any of the above will suffice to conclude that a company or a legal person is domiciled in a
certain territory. However, as it has been stated above in the previous section, Internet
companies can, at times, be difficult to locate. They might either have their statutory seat and
central administration in a so-called Internet-paradise country, whereas the principal place of
business may be in the electronic environment, especially if they focus on trade in electronic
materials. In this case, the court seized with such an issue may use a number of other criteria
in order to establish the domicile of such a company or legal person: The extension of the
domain name, the language of the web-site and the currency used to express the prices of
their offer. The problem would appear, of course, if the extension would be, for example
.com, the language of the site English and the prices stated in US Dollars and/or Euro. In such
a case, one should turn to the alternative jurisdictional rules contained in article 5 of the
Brussels I regulation.21
Forum Solutions
Turning to the provisions of article 5, the first paragraph establishes the general jurisdictional
rule in matters related to contracts according to which the courts of the Contracting states of
the place of performance are competent to adjudicate in such conflicts. Further in the same
paragraph it is stated that in a contract for the sale of goods or the provision of services
jurisdiction belongs to the courts of the place where the goods were delivered or should have
been delivered or, in case of service provision, in the courts of the Contracting state where the
20 Tang, Zheng Sophia, Exclusive Choice of Forum Clauses and Consumer Contracts in E-Commerce, (2005)
1 Journal of Private International Law available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2080172
(last accessed on 15.03.2015)

21 Ibid
Page 13 of 21

services were provided or should have been provided. This seems to be a satisfactory
provision, able to clarify, to a certain degree, the above-mentioned dilemma. In other words,
provided that the contract is for the supply of physical goods or provision of services, the
article under analysis in this paragraph is applicable to business-to-business e-commerce
contracts.22
However, if the contract is for the sale of electronic materials (software, images, voice, text,
etc.), the foregoing provision can be hardly applicable. In such a contract, the place where the
performance takes place, or, to be more specific, where the materials are being delivered, may
be located only after considerable efforts. Even when attempting to construe article 5(1)b in
an extensive manner, thus considering electronic materials as being assimilated to goods or
services, the place of delivery is quite difficult, if not impossible, to be established: Is it the
place where the supplier enters the data in the hardware or the place where the data is
downloaded. What if, in a contract between two companies, one Dutch and the other English,
the electronic material is being downloaded from a laptop while the person responsible for
this activity is on a business trip to Greece? Will this mean that the court of the latter state can
try a conflict arising from such a contract? The scarcity of rules in this area causes the answer
to such questions to be open for interpretation. In particular, the problem arises because such
materials can be downloaded anywhere in the world.23
OUT-OF-COURT JURISDICTION
Possible benefits
Compared to other categories of trade, e-commerce presents a number of specific features:
Perhaps one of the most evident is the speed with which transactions are being concluded.
Especially when electronic materials are being purchased, the simple downloading of the
software in question can last for only a few moments. Another feature, of course, is that due
to Internets global accessibility, a company or legal person offering goods, services or
electronic materials by using this medium can reasonably expect to sell products worldwide.
At the same time, companies or legal persons active on the Internet may at times be difficult

22 Supra Note 1.
23 Supra Note 1.
Page 14 of 21

to trace according to traditional criteria, i.e. statutory seat, central administration or principal
place of business.24
Considering these special features presented by e-commerce, settlements of disputes in courts
might not constitute always the most suitable option. It is a well known fact that court
procedures last very often for quite a long time, even when the issues concern conventional
contracts. One could hardly imagine that for a contract in which the performance has been
completed in a few minutes the parties will tolerate having to wait for a few months, or
sometimes even longer, for a judgement to be rendered.
Under these circumstances, perhaps out-of-court dispute settlement would constitute a valid
alternative to the conventional court system. In this manner, the issues discussed above may
be successfully tackled; especially in the event these bodies would be specialized in ecommerce transactions, the issue of time-consuming procedures could come to a sound
solution. For instance, one can imagine that in this case the proceedings will be conducted
through electronic mail, thus saving time and costs. The efficiency of this solution will be
expressed also in terms of reduced costs for the parties and certainty as to where in the world
can a distributing company be sued, regardless of the fact that it conducts businesses on a
global scale. Likewise, being a specialized body, issues such as the domicile of a company or
a legal person can be tackled through the development of clear case-law based rules, thus
adding to the certainty of law in the area of e-commerce.25
Out-of-court dispute settlement in Europe
Having been aware of the importance of such mechanisms for the settlement of legal
conflicts, particularly in cases the amount under dispute is of low value and the parties
involved are of negligible size, the European Commission chose to refer to this matter in its
draft proposal for a directive on electronic commerce:
Member States shall ensure that, in the event of disagreement between an
Information Society service provider and its recipient, their legislation allows the
effective use of out-of-court schemes for dispute settlement, including appropriate
electronic means.
24 Ibid
25 Supra Note 23
Page 15 of 21

This legislative act has been recently adopted. However, the provision establishing the
framework for the functioning of out-of-court dispute settlement bodies has been the subject
of several modifications. It now reads as following:
Member States shall ensure that, in the event of disagreement between an
information society service provider and the recipient of the service, their
legislation does not hamper the use of out-of-court schemes, available under
national law, for dispute settlement, including appropriate electronic means.26
UNITED NATIONS CONVENTION ON THE USE OF ELECTRONIC COMMUNICATIONS IN
INTERNATIONAL CONTRACTS (NEW YORK, 2005)
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.
Relevance:
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.27
Key Provisions
26 Supra Note 16
Page 16 of 21

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 nondiscrimination, technological neutrality and functional equivalence.28
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).29
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
27 United Nations Convention on the Use of Electronic Communications in International Contracts
(New York, 2005) available at
http://www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/2005Convention.html (last
accessed on 15.03.2015)
28 Ibid
29 Ibid
Page 17 of 21

(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).30
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 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.31

CONCLUSION
The Internet was first developed in 1970s as a communication mean between universities
and research schools in North America. From this point of view, it can be easily assimilated
30 Ibid
31 Ibid
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to the 17th century Republiek der Letteren, an academic network developed among European
scholars. The significant difference is, however, that the exchange of information system used
in the past remained at the stage of a strictly academic-oriented network, whereas the Internet
has evolved to entail a preponderantly commercial character.
While providing a reasonable protection standard for consumers concluding e-commerce
contracts, the regulation fails to address the issue of domicile of companies and legal persons
conducting business activities exclusively through electronic means. This omission is even
more evident in the business-to-business contracts, especially when it is difficult to establish
the place of performance of the obligation in question.
One possible way to avoid these problems would be the inclusion of a forum choice clause in
the initial contract. While being able to apt for the jurisdiction of a certain court, the parties
may at the same time choose to solve their future dispute before an out-of-court panel. In this
last case, the main peculiarity of e-commerce, namely efficiency in terms of time, may be
preserved
As far as the law applicable by such dispute settlement bodies is concerned, of course the will
of the parties is in this case is very important, and the panel will be bound by the choice of
law agreed among the parties. If such a choice of law clause is missing, the body might look
at the law of the forum or of another country, in accordance to the private international law
rules applicable in that respective state. However, one can imagine the situation whereby an
independent body of rules and regulations would be developed to apply only to legal
relationships connected to the cyberspace. Such a development would not be entirely
surprising.
Two models for conflicts rules relating to electronic consumer contracts. First proposalthe
protective modelcontinues to apply the consumer's jurisdiction and applicable law as the
default, provided that the contract in question falls under the scope of protection. A
jurisdiction or choice of law clause between the parties would generally be considered valid,
though a jurisdiction or choice of law agreement is prima fade ineffective. The second
proposalthe mixed modelalso allows a consumer to bring an action against a business in
either the business's or the consumer's jurisdiction. Additionally, in the absence of an
agreement between the parties, the applicable law is that of the habitual residence of the
consumer. Unlike the protective model, however, the mixed model allows for the adoption of
jurisdiction or choice of law agreements. Electronic Consumer Contracts in the Conflict of
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Laws provides a comprehensive overview and analysis of the limitations of the existing
conflicts system, particularly with regard to electronic consumer contracts. While one may
stress the need to achieve balance, it is must be understood that the two proposals of the
conflict of laws model with regard to e-commerce must ultimately protect the consumer.
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