Electronic Commerce Act

On October 16, 2000 the Electronic Commerce Act ( the "ECA") came into effect in Ontario. The new legislation is designed to promote the use of information technology in commercial and other transactions by resolving legal uncertainties and removing statutory barriers that affect electronic communication. In essence the ECA ensures that electronic transactions are functionally equivalent to their paper counterparts. Simply put, the Act permits:

· a person to use a computer to sign legally binding contracts or documents.
· businesses to provide clients with invoices, receipts, confirmations and other statements in an electronic form, effectively eliminating the time, expense and duplication of sending papers by regular post.
· businesses to store certain types of records, which had previously required paper hard copies, solely in an electronic form.
The initiatives are achieved through several means. Documents can be signed by an 'electronic signature', defined as "electronic information that a person creates or adopts in order to sign a document". The basic legal elements of a contract, offer and acceptance, can consequently be expressed by clicking on an icon or even through voice activated instructions. The use of biometrics (fingerprint, voice recognition, or iris scan) is not required by the ECA to establish the existence of an electronic signature.
Documents may also be stored exclusively in an electronic form, provided that the information is accessible and usable for subsequent reference. The ECA provides a "reasonable assurance" test as to the integrity of the information contained in an electronic document that is to be retained as the original. The criterion for assessing the integrity of a an electronic document is whether the information has remained complete and unaltered and shall be determined in light of all the circumstances, including the purpose for which the document was created.
The initiatives adopted by the legislation mirror international specifications set out by the United Nations and adopted in 1999 by the Uniform Law Conference of Canada in the Uniform Electronic Commerce Act. The standardized terms are designed to provide cross-jurisdictional consistency.

Concerns about implied consent and privacy are also addressed by the ECA. The Act does not oblige persons to use electronic communications if they do not wish to do so and clearly articulates that there is no implied consent. Consent to the use of electronic communications, however, may be inferred from conduct, such as actual use. Nothing in the Act limits the operation of the Freedom of Information and Protection of Privacy Act, the Municipal Freedom of Information and Protection of Privacy Act, or any other provision of law that is intended to protect the privacy of individuals, or provide rights of access to information held by public bodies and similar entities.

Further, it is important to note that the ECA will not apply to all transfers. Certain documents require more detailed safeguards. The Act does not apply to wills and codicils, trusts created by wills or codicils, powers of attorney (to the extent that they are in respect of an individual's financial affairs or personal care), documents that create or transfer interests in land and require registration to be effective against third parties, negotiable instruments such as cheques, or any other document prescribed by the ECA.

The foregoing comments are of a general nature, and are not intended nor should they be used as a substitute for legal advice or opinions which can be rendered only when related to specific fact situations.

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