The Singapore Electronic Transactions Act and the Hong Kong Electronic Transactions Ordinance

Daniel Seng1

Introduction

Today, electronic commerce needs no introduction. The speed of the development of on-line applications and the acceptance of electronic transactions coincided with the extraordinary expansion and widespread accessibility of the internet. However, this in turn poses new challenges to legal systems. With a view to addressing uncertainties over the application of existing laws to transactions in the electronic environment, Singapore introduced the Electronic Transactions Bill2 in Parliament on 1 June 1998, and on 10 July 1998, the Electronic Transactions Act (ETA) was enacted into law.3 The Hong Kong experience is similar: the Hong Kong government introduced its bill before the Legislative Council on 14 July 1999,4 and by 5 January 2000, the Electronic Transactions Ordinance (ETO)5 became law. The fast passage of these laws before the Singapore and Hong Kong legislatures was clearly motivated by the determination of these legislatures to rapidly establish legal regimes in these two jurisdictions so that the development of electronic commerce could be facilitated.6

Both the ETA and the ETO share the same parentage: the Utah Digital Signature Act 1995 (Utah Act),7 the world's first digital signature legislation, and the Model Law on Electronic Commerce 1996 (Model Law) adopted by United Nations Commission on International Trade Law.8 Both laws have been instrumental in the development of electronic commerce legislation worldwide, and in this regard, Singapore and Hong Kong are pioneers in the enactment of electronic commerce legislation. However, just as technology continues to make its inexorable progress, legal developments have also proceeded apace at the international level. On 23 November 2005, the United Nations General Assembly adopted the new UN Convention on the Use of Electronic Communications in International Contracts (UNCITRAL Convention),9 and on 6 July 2006, China and Singapore became signatories to the UNCITRAL Convention.10 With the pressing need for the harmonization of national electronic commerce legislation, particularly with the advent of the UNCITRAL Convention, it is suggested that a review of the Singapore ETA and the Hong Kong ETO is now a matter of some urgency.11 Any such review will also enable a careful consideration of the new issues brought about through the advent of new electronic transaction models.

This paper seeks to undertake such a preliminary review. The focus of the paper is on five broad areas: the scope of electronic transactions and their exclusions, the continued relevance of party autonomy, excluded matters under electronic transactions legislation, the tension between digital signatures and other forms of electronic signature, the relevance of public key infrastructure, and the management of new (and unresolved) issues in electronic transactions.

Scope of electronic transactions

The utility of any legislation lies in first demarcating the scope of its application. Both the ETA and ETO do not define what constitutes an 'electronic transaction' or even 'electronic commerce', and only defines an 'electronic record' as 'a record generated ... [by] an information system'.12 On the other hand, the UNCITRAL Convention uses the term 'electronic communications',13which is defined as an electronic '[communication in the form of] any statement, declaration, demand, notice or request, including an offer and the acceptance of an offer, that the parties are required to make or choose to make in connection with the formation or performance of a contract.'14 After defining what constitutes an electronic transaction or an electronic communication, the functional equivalence rules that equate electronic transactions or communications with their traditional counterparts, then follow. So electronic records are to be...

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