A successful commercial transaction, whether electronic or not, requires that the people involved know they have a contract, have a clear idea of what to expect from one another, and understand what they can do to enforce the contract. Global Electronic Commerce will achieve its full potential only when there are clear legal principles, accepted worldwide, that provide consumers and businesses the same assurances about electronic transactions that they currently have about transactions conducted in person or on paper. To achieve that standard, a new legal framework must be crafted that adapts current laws -- especially contract and consumer protection laws – so they work in the online, global environment of electronic commerce.

CSPP believes that the new legal framework must reflect the following fundamental principles:

• Individual Choice: Parties who wish to enter into business transactions should be entitled to choose to do so electronically and, as in paper transactions, should be able to determine the terms of their agreement by mutual consent.



• Equal Treatment for Electronic Transactions: Electronic signatures and documents, with some exceptions such as wills, should have the same status as original signatures and written documents. If certificate authorities are to be used as part of the process for verifying documents, the licensing requirements for such certificate authorities should be the minimum needed to ensure reliability and integrity.



• Technology Neutrality: The new legal framework should be technology neutral and robust. That is, it must enable the use of technology to provide solutions to problems such as authentication of electronic signatures, but should also be adaptable to new technology as it emerges over time.



• Protection for the Consumer: Basic consumer protections must be established for this new electronic medium and international rules are required to provide certainty about how and what consumer laws will be applied to a given transaction. Similarly, predictable rules are needed to determine where and how disputes may be resolved and agreements enforced.

Guided by these principles, CSPP supports the need for actions within the United States and internationally to construct a legal framework for Global Electronic Commerce. CSPP supports the work being done in the following three key areas.

1. Updating Current Contract Laws: In the United States, efforts are underway to add a new article to the existing Uniform Commercial Code that will update this critical model law to address certain online transactions. The same organizations -- the National Conference of Commissioners of Uniform State Laws (NCCUSL) and the American Law Institute -- have also begun work on a new model law for the states, the Uniform Electronic Transactions Act. Internationally, the United Nations Commission on International Trade (UNCITRAL) has completed a model law on electronic commerce that will provide guidance to countries world-wide.



2. Electronic Authentication and Digital Signatures: Nearly three dozen states in the U.S. have passed or are considering some form of electronic authentication legislation. In terms of approach, these legislative efforts range from Utah's detailed regulatory scheme for digital signatures and certificate authorities to California's more technology neutral, market-based approach. Elsewhere, about twenty-four countries have either passed or are considering similar laws. Among these are Germany, Korea and Spain which have passed laws; and Argentina, Denmark, Chile, Italy and Malaysia which are considering passage.



3. Harmonization and Mutual Recognition: Robust Global Electronic Commerce requires that no matter what systems or legal principles are adopted at a state or national level, there must be a mechanism to provide international recognition for documents and transactions. At this time, regional organizations, including the European Union and the Asia Pacific Economic Community, are evaluating mutual recognition or harmonization systems. U.S. participation in relevant future discussions of this topic is critical.