Use of Electronic Signatures and Documents
As in many other countries, e-commerce is developing quickly in Chile. Companies have started to promote their corporate image, products and services through the Web. Likewise, the use of credit cards to close transactions online is increasing. Venture capital funds have extended their activities to this new business area and several incubators have established operations to help internet start-up companies develop their businesses by providing them technical, financial and infrastructure services.
Although existing statutes, originally designed to cope with traditional modes of commerce, can be of use when deciding disputes relating to certain e-commerce transactions, legislation regarding the use of electronic documents as evidence cannot. Also, to facilitate e-commerce, more specialized legislation is needed to regulate the closing of transactions through electronic media, such as:
- electronic payments and transfers of funds;
- the probative value of electronic documents; and
- the identification of contracting parties through digital signatures.
Evidence and its probative value are specifically regulated under Chilean law as a matter of public policy. In order for the courts to give an electronic document probative value, the laws governing evidence and probative value must be amended.
One instrument that Chilean law acknowledges as probative evidence is a 'private instrument'. The law does not subject a private instrument to any formality. Therefore, it does not have to be handwritten or be signed by the principal, not does it have to state the date or place where it was extended. Accordingly, a private instrument will have full probative value, as if it were a public document, if (i) it has been recognized by the party against whom it is being presented or (ii) the court deems the same to have been acknowledged.
Electronic evidence contained in digital means may not be acknowledged as a private instrument. However, a paper print of an electronic document will be accepted as evidence (and its probative value will depend on the above-mentioned factors).
Although no commercial regulations give electronic documents probative value, the Code of Criminal Procedure grants probative value to facts contained on magnetic media that serve to prove a punishable deed and the identity of the criminal. Also, if necessary, a judge may use results obtained from a computer to clarify events. If he does, he must determine the way in which such evidence will be certified and may appoint a technical expert to develop or explain the evidence. Cinematographic films, photographs, phonographs and other systems of image and sound reproduction (even if down-loaded from a computer) may be admitted as evidence.
Therefore, with regard to criminal offenses through electronic means (ie, fraud in connection with an e-commerce transaction), electronic evidence may have probative value.
On the Internet, the most common way to close contracts is by using e-mail or on the basis of EDI (electronic data interchange) agreements.
However, although the basic legal conditions are present to close transactions through e-mail, EDI agreements and web servers (eg, offer and acceptance), there are certain difficulties in determining whether other requirements for the formation of contracts (as set out in the Commercial Code) are met. Among these are the time and the place of the formation and the applicable law.
In general, a contract is agreed at the place of the parties and at the time of their consent. Clearly, it is difficult to determine the foregoing on the Internet. The parties may tbe housands of kilometers apart and possibly in different countries. This causes doubt as to which jurisdiction's laws govern the terms of the contract. Additionally, the time at which the contract was formed is difficult to determine since there are gaps between the sending and receipt of (e-mailed) information.
Use of Electronic Signatures and Documents
On June 26 1999, a presidential decree was published that provides government agencies with a legal framework for using electronic signatures and documents. The decree applies only to purely government matters; it does not apply to government relations with private parties.
The system for using electronic signatures and documents is based on asymmetric algorithms, or public and private password cryptography. The decree provides that:
- the private password of the issuer ensures the authorship and integrity of the electronic document that is being sent;
- the public password of the receiver ensures the encryption thereof; and
- the public password of the issuer verifies the foregoing so that the document may be decoded.
The decree acknowledges that there is no difference between computer documents and paper documents. The authorship and integrity of an electronic document can be authenticated with the same (or greater) degree of security as a signature on paper. Therefore, a digital signature of a government official will have the same effect as a hand-written signature. When an electronic document is digitally signed, it shall be deemed issued by the official who has digitally signed it and it shall cause the same legal effects as a written document signed by hand and written on paper.
The decree provides, with respect to certain relations between the government and the private sector, that digitally signed electronic documents that must be published or notified to a private person should be transferred to paper. The printed form of a digitally signed electronic document will be deemed a notarized copy thereof provided the minister of faith of the corresponding agency confirms that it corresponds with the electronic original.
Taking into account that there are many legal aspects of e-commerce that need to be addressed, the Chilean government is preparing a draft bill that will be presented to Parliament. It is expected that in the coming months discussions will be undertaken in Parliament to approve a new law which, among other things, will acknowledge and grant probative value to electronic signatures in private transactions.
For further information on this topic please contact Jorge Carey Carvallo, Guillermo Carey or Gonzalo Fuenzalida at Carey y Cía by telephone (+56 2 365 7200) or by fax (+56 2 633 1980) or by e-mail ([email protected] or [email protected] or [email protected]).
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