Valid contract can be concluded by e-mail.

Posted On Saturday, 02 November 2002 02:00 Published by
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New act also allows legally binding agreements to be made via a website.
 New act also allows legally binding agreements to be made via a website

MANY barriers to e-business have been removed by the introduction of the Electronic Communications and Transactions Act, which will enable businesses and individuals to transact and communicate more easily using technology, says Wim Mostert, partner and head of technology law at Deloitte & Touche.

The act allows documents to be created, transmitted, received and stored in electronic form.

It will cut costs for companies and will enable listed organisations to communicate electronically with their shareholders, says Mostert.

'The JSE Securities Exchange SA is preparing clarification on how this will be allowed and it will require an amendment to the articles of a company.'

In future, the act will allow companies to sign new business deals with customers without a face-to-face contract.

'A valid contract can now be concluded by e-mail or via a website, instead of a customer having to come in and sign.'

Companies will need to review their standard agreements with customers and business partners to ensure they conform with the provisions of the act.

'Failure to comply with these requirements could offer consumers the opportunity to terminate an electronic agreement.'

Customers must be provided with sufficient information about the transaction they are entering into and details of where terms of the agreement can be accessed.

Unsolicited communication and spam are outlawed by the act, whether by e-mail or SMS.

The definition of a transaction in the act includes the imparting of information, for example about goods or services.

Requirements apply equally to the electronic interaction itself and the back-office systems where data is stored. Certain databases may be classified as critical by government and will have to comply with security requirements, says Mostert.

Rules will be published governing the accessing of data from critical databases and the sale of data to a third party. A critical database is one that is declared by the minister to be of importance to national security or the wellbeing of SA citizens. In addition, the act provides a voluntary regimen whereby companies may subscribe to a set of nine bestpractice principles on dealing with an individual's personal information, says Mostert.

'Separate legislation dealing with the privacy and protection of data is in the research phase and when it becomes law this section of the act will become obsolete.'

The act requires government to become e-business-enabled in terms of making services available online to citizens and the business community.

To make this possible, a national e-business strategy will be devised that will provide for the necessary infrastructure, for example, to allow people to access information and pay for government services electronically.

Criticism of the act has related to rulings on custodianship of internet domain names, the introduction of cyber inspectors and critical databases, says Mostert.

Publisher: Business Day
Source: Business Day

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