The Electronic Transactions Act 2010 ("ETA") came into operation on 1 July 2010. It repealed the previous edition of the Electronic Transactions Act ("Previous ETA"). The ETA brings Singapore’s laws on electronic transactions in line with the United Nations Convention on the Use of Electronic Communications in International Contracts ("UN Convention") which was adopted by the United Nations on 23 November 2005. This article focuses on the provisions in the ETA which relate to commercial transactions and the differences compared with the Previous ETA.
The First Schedule lists out the transactions which the ETA does not apply to. The ETA does not vary the existing laws applicable to these transactions (such as wills, negotiable instruments, etc.). However, this does not preclude parties from conducting such transactions electronically.
Parties to a transaction are entitled to exclude the use of electronic communications and the application of the ETA or to impose additional requirements beyond what is provided in the ETA.
Section 8 of the ETA introduces new criteria which an electronic signature must meet before it can be recognised as satisfying any rule of law requiring a signature. The criteria broadly require the adoption of a method that is reliable and capable of identifying a person and indicating his or her intention.
A certification authority is given the responsibility of issuing a certificate which authenticates the digital signature belonging to an individual. Digital signatures make use of public key infrastructure ("PKI") solution to guarantee its authenticity. Electronic records to which digital signatures are placed are presumed to be authentic. A digital signature applied to an electronic record is presumed to be the signature of the person to whom it relates and to have been affixed with the intention of approving the electronic record.
Provision of originals
Section 10 of the ETA provides that where a rule of law requires a document, a record, or information to be provided or retained in its original form, an electronic form will suffice, provided that the electronic form satisfies the requirements of integrity and capability of being displayed, and any other additional requirement imposed by public agencies.
Time and place of despatch and receipt
Section 13 of the ETA replaces section 15 of the Previous ETA and is aligned with article 10 of the UN Convention. Section 13 of the ETA is a significant departure from section 15 of the Previous ETA and takes into consideration technical issues relating to the use of spam filters and antivirus software. This departure is also recognition of the greater use of internet communications such as posting of communications on websites. This section is significant as the time of despatch or receipt of an electronic communication is critical in time sensitive transactions, such as tender submissions and the rendering of support services in service level agreements.
Time of despatch
Time of despatch of an electronic communication is the time when it leaves an information system under the control of the originator. If the electronic communication has not left an information system under the control of the originator, the time of despatch is the time when the electronic communication is received. This is in contrast to section 15 of the Previous ETA which provided that the despatch of an electronic record occurs only when it enters an information system outside the control of the originator.
Time of receipt
Time of receipt of an electronic communication under the ETA is now the time when it becomes capable of being retrieved by the addressee at an electronic address designated by the addressee. Where the addressee has not designated an electronic address, the time of receipt is the time when that electronic communication becomes capable of being retrieved by the addressee at that address and when that addressee becomes aware that the electronic communication has been sent to that particular address.
In comparison, section 15 of the Previous ETA provided that the time of receipt occurs when the electronic record enters the designated information system or if the electronic record is sent to an information system of the addressee that is not the designated information system, at the time when the electronic record is retrieved by the addressee.
Under the new section 13 of the ETA, the place of despatch of an electronic communication is deemed to be the place where the originator has its place of business while the place of receipt is deemed to be the place where the addressee has its place of business.
Invitation to make offers
Section 14 is a new provision which states that electronic communications addressed to the general public and proposing to conclude contracts are to be treated as invitations to treat or invitations to make offers unless otherwise specified. This default position is akin to that of an advertisement where the seller is not obliged to actually sell those products that it has advertised. This section protects an online retailer where a mistake has been made in the price of a product.
Automated message systems
Section 15 of the ETA provides that contracts can be formed by automated message systems. Such contracts will not be denied validity or enforceability on the sole ground that no person reviewed or intervened in the transactions carried out by such automated message systems. Section 15 of the ETA corresponds with article 12 of the UN Convention and provides assurances to businesses which employ automated response systems or automated order placement systems. Section 15 of the ETA is particularly useful in an auction situation where a bidder cannot deny the validity of a contract formed by an automated message accepting the bidder’s bid.
Error in electronic communications
Consistent with its attempt to align itself with the UN Convention, the ETA has also introduced a section 16 which allows for input errors in electronic communications to be withdrawn. Section 16 of the ETA is qualified by two provisos, namely that it will not apply unless the person who has made the error notifies the other party of the error as soon as possible after he learns of it and that person must not have used or received any material benefit or value from the services. This section brings assurance to the public who are wary of conducting internet transactions in case any mistakes are made.
The ETA brings Singapore’s laws on electronic transactions in line with internationally recognised standards and, in doing so, seeks to promote the wider adoption of electronic transactions in the marketplace. It is crucial for businesses operating or intending to operate in the online marketplace to keep in step with the aforementioned developments by actively updating their processes.