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E-commerce Law Electronic signatures and security
Identity One of the most important issues on the Internet is identity. Anyone can be anyone on the Internet. When in a computer chatroom, how do you know who you are really chatting with?
Identity Why is identity important? Because … … … Identity ensures enforceability.
Enforceability For example Bill emails Paul and offers him 4000 blank CD ROMs for £ 400. Paul emails Bill and accepts.
Enforceability Paul then discovers that he can buy the same number of CDs from Carla who imports them cheaply from China for £ 300. When Bill delivers the CDs to Paul, Paul refuses to accept them and states that someone other than himself must have sent the email and made the contract.
Enforceability What is the legal position? The answer lies in enforceability and proving on the balance of probabilities that Paul made the contract with Bill. If Bill went to court would he win?
Enforceability This will always depend upon the evidence that is available. The same situation is true for shopping on the Internet.
Enforceability The problem here lies with identity. If you could prove identity you could enforce contracts more easily. How can you prove who the person is at the other end of the electronic communication?
Electronic Signatures The law for electronic signatures is founded in European Directive 1999/93. It was formalised into UK law by the Electronic Communications Act 2000. It was once to be called the Electronic Commerce Act, but was renamed during its passage as a large part of it deals with telecommunications.
Electronic Signatures During its transition through Parliament, the main purpose of the ECA was “to help build confidence in electronic commerce and the technology underlying it. ”
Electronic Signatures The Act provides a major legal benefit the legal recognition of electronic signatures. Section 7 of the Act gives electronic signatures the same legal standing as a manual signature.
Section 7 (1) In any legal proceedings(a) an electronic signature incorporated into or logically associated with a particular electronic communication or particular electronic data, and (b) the certification by any person of such a signature
Section 7 (cont’d) shall each be admissible in evidence in relation to any question as to the authenticity of the communication or data or as to the integrity of the communication or data.
What is an Electronic Signature? An electronic signature is a manual signature in electronic form, for example
What is an electronic signature? For the purposes of the Electronic Communications Act 2000 ---An electronic signature is a digital certificate which verifies the identity of an individual.
What is an electronic signature? They can be used in two ways. 1. Stored in your internet browser 2. Attached to an email
Stored in the internet browser. This allows an electronic retailer to confirm the identity of a person who is ‘shopping’ on the internet. example
Email Electronic signatures can be attached to emails to confirm the identity of the sender. N. B. Section 7 of the ECA gives an email signed in this way the same legal force as if it was signed by hand.
Associated benefits Electronic signatures have a very useful associated benefit, which is: ~ totally secure email. Secure email will be very important for lawyers in the future.
Secure email Electronic signatures use dual key cryptography What is dual key cryptography?
Dual Key Cryptography Every electronic signature has 2 keys associated with it. 1. A private key 2. A public key
Private Key This is kept by the person sending an email and is used to encrypt the electronic signature.
Public Key This is sent with the electronic signature and allows the electronic signature to be unencrypted.
Dual Key Cryptography Peter’s Private Key Peter’s Public Key Paul
Effect of the encrypted signature When the electronic signature is unencrypted, it will: ~ 1. Inform the recipient whether the email has been tampered with. 2. Authenticate the email as coming from the person it appears to be from.
Secure email Secure Email is possible as soon as one person has another’s public key. An email, and any associated documents, can be encrypted by that public key which can only be unencrypted by the corresponding private key.
Secure Email Completely secure email is very significant for solicitors as it will allow quick and confidential communication with others.
Problems with Electronic Signatures There are some disadvantages with electronic signatures. 1. They are not free 2. They do not remove fraud.
Cost? It is possible to get free electronic signatures, although these are only for individual use. Electronic Signatures for business cost money. The largest supplier of electronic signatures is called Verisign.
Fraud As yet in this country there is nothing to prevent another person getting a signature on your behalf and contracting as you. This is more difficult in America.
The impact of electronic signatures What impact have electronic signatures had on the world? Not as much as could be hoped for - yet.
The impact of electronic signatures E-commerce has increased. However, would e-commerce have increased anyway? Probably yes.
The impact of electronic signatures Electronic Signatures are set to have a major impact on property transfer.
Electronic Conveyancing This will remove the paper requirements for the buying and selling of property. A solicitor will act as an agent for property owners and sign all documents electronically on their behalf.
Electronic Conveyancing Allowing electronic conveyancing has required an important change to the law. Prior to 2002, all conveyances needed to comply with s 2 of the Law of Property (Miscellaneous Provisions) Act 1989.
Electronic Conveyancing This requires contracts to be made in writing – s 2(1). Electronic conveyancing will not be in writing because it is electronic. Therefore the law had to be changed
Electronic Conveyancing This change came in the form of section 91(4)(a) of the Land Registration Act 2002. This states that an electronic conveyancing document is deemed to be ‘in writing’.
The future of Electronic Signatures In the future Electronic Signatures will be probably be carried by every individual. They are already being put on smart chips on credit cards.
The future of Electronic Signatures These smart cards will in the distant future carry lots of other information, for example: Fingerprints DNA information Medical records