COEN 351

Legislation, Regulation, Guidelines

Legislation, Regulation, and Guidelines

There are many issues relevant to e-commerce that are at least partially unresolved in the law.

Technology works best if deployed on a systemic or global scale.

Electronic Funds Transfer Act (EFTA) and Regulation E (1978) Provide consumer protection Allocate liability among e-commerce

participants Limits consumer liability for unauthorized

transfer at $50.- or actual loss But consumer needs to give timely notice (2

business days). Besides notification requirement, EFTA does not

impose any burden of care on the consumer with respect to safeguarding of access devices.

Consumers need to be apprised of their legal rights and remedies and applicable charges.

UCC Article 4a Addresses “wholesale wire transfers”.

Nonwritten communications create legal problems.

Places considerable responsibility on customers to protect the integrity of security procedures agreed upon with banks.

A payment order might be effective (even if unauthorized)

Commercially reasonable security procedure. Payment order accepted in good faith and in

compliance with security procedure. E-commerce relevant changes.

Electronic Signature Law

The E-Sign Act (June 2000) contains provisions regarding the use

of electronic signatures provisions regarding electronic

recordkeeping

Electronic Signature Law The E-Sign Act provides

that a signature, contract or other record will not be denied legal effect, validity or enforceability solely because it is in electronic form or because an electronic signature or electronic record was used in its formation.

Thus, subject to certain exceptions, "electronic signatures" will be as valid as paper and ink signatures and electronic records will be as valid as paper records.

Use remains voluntary.

Electronic Signature Laws The E-Sign Act does not apply to

the creation and execution of wills, codicils or testamentary trusts; adoption, divorce or other matters of family law; contracts or other records governed by the Uniform Commercial

Code (other than Sections 1-107 and 1-206 and Articles 2 and 2a); court orders or notices or official court documents (including briefs,

pleadings and other writings) required to be executed in connection with court proceedings;

any notice of cancellation or termination of utility services; any notice of default, acceleration, repossession, foreclosure or

eviction with respect to an individual's primary residence; the cancellation or termination of health insurance benefits or life

insurance benefits; recall of a product or material failure of a product that risks

endangering health or safety; any document required to accompany any transportation or

handling of hazardous materials, pesticides or other toxic or dangerous materials.

Electronic Signature Law

Consumer needs to consent to use of electronic records. Specific procedures needed to obtain

consent. This excludes oral communications.

Uniform Computer Information Transactions Act: UCITA (July 1999).

Governs transactions on Computer Information Rights to data Software licenses

Parties can opt out of UCITA “bomb-shelter legislation”

Residents of a state with bomb-shelter legislation can opt out of UCITA laws enacted by other states.

Excludes software from the notion of “goods” Resolves jurisdiction to state specified in

agreement. Currently, only adopted by Texas and Virginia.

Under consideration in Connecticut, Hawaii, Massachusetts, and North Dakota.

PKI-related standards and guidelines

American Bar Association guidelines on digital signatures:Signing serves the following general purposes:

Evidence: A signature authenticates a writing by identifying the signer with the signed document. When the signer makes a mark in a distinctive manner, the writing becomes attributable to the signer

Ceremony: The act of signing a document calls to the signer's attention the legal significance of the signer's act, and thereby helps prevent "inconsiderate engagements.

Approval: In certain contexts defined by law or custom, a signature expresses the signer's approval or authorization of the writing, or the signer's intention that it have legal effect.

Efficiency and logistics: A signature on a written document often imparts a sense of clarity and finality to the transaction and may lessen the subsequent need to inquire beyond the face of a document.

PKI-related standards and guidelines

American Bar Association guidelines on digital signatures:Signatures must have the following attributes: Signer authentication: A signature should

indicate who signed a document, message or recordand should be difficult for another person to produce without authorization.

Document authentication: A signature should identify what is signed, making it impracticable to falsify or alter either the signed matter or the signature without detection