Does the new electronic transactions Bill go far enough? Middletons partner Dudley Kneller and lawyer Kate Price write
Federal Attorney-General Robert McClelland has just introduced the Electronic Transactions Amendment Bill 2011 into the House of Representatives, following extensive consultation dating back to 2008. New South Wales and Tasmania have quickly passed the amendments and the other Australian States and Territories are expected to pass amendments to their own legislation over the next 12 months.
The bill amends the Electronic Transactions Act 1999 and is an attempt to bring Australia's electronic transactions legislation into line with advances in technology. This is no mean feat and the bill is very much a step in the right direction. Amongst other things the bill seeks to clarify that a contract can be formed via an automated system, addresses the uncertainty around a contracting party’s location online and also simplifies the process by which transactions or other laws may be exempt from the Act.
The bill is a welcome initiative and many of the proposed updates simply reflect what is now modern business practice, and the move by consumers to an online world. We all take for granted our business dealings conducted via email and we are all now pretty comfortable buying music online (well mostly anyway!). When we click "I accept" the bill now confirms the action of forming a contract even though the contract is formed with an automated message system.
The amendments also mean that a contract can be formed by sending messages over a secure system that requires the other party to log in and retrieve a message – a means of communication that is becoming more and more popular as concerns about email security grow.
Importantly, once the bill is enacted, Australia’s electronic transactions regime will reflect internationally recognised legal standards on e-commerce and Australia will be able to accede to the UN Convention on the Use of Electronic Communications in International Contracts 2005. Australia has been under some pressure to accede to the convention with intense lobbying by industry to date. When enacted Australia will join a further 18 countries, including trading partners Singapore and the Republic of Korea, who have signed the convention to date.
While the Act is technology neutral and allows people to determine the technology they use to form a contract (and will remain so if the bill is enacted), has the bill gone far enough? Inevitably technology will continue to advance at the speed of light with the law once again falling behind. We are unlikely to be in the same place in 3 or 5 years time as business and consumers continue to embrace technology changes and new ways of engaging. At what point will they become hamstrung by the existing legal framework governing these new engagements.
Let's not shy away from the fact that the bill is an important step towards giving Australian business comfort that their business practices comply with the law. Perhaps we can suggest that that the government review the Act a little more regularly to ensure that it doesn't fall so far behind business and consumer practices in the future. Maybe a difficult task but, with the online retail marketplace nudging $28 billion this year, one worth thinking about!