Australia set to sign UN treaty on electronic contracts

Australia appears set to sign a United Nations treaty that recognises the validity of electronically-signed contracts in the legal system, following unanimous support from industry submissions to a Parliamentary Committee on the matter, which convened in Canberra yesterday.

"It also supports the principle of party autonomy in electronic contracting and merely provides default rules that apply in circumstances where the parties are silent or have not agreed to alternative terms."

The convention sets default rules for the location of parties, information and form requirements, time and place of dispatch and receipt of electronic communications, invitation to make offers and dealing with errors.

"Companies and traders [will] get reassurance that electronically negotiated contracts are as valid as binding as paper-based versions," Daniels said.

Committee member, Sharon Grierson MP (ALP) asked Daniels what problems the treaty would resolve.

Daniels replied that it would "confirm what a lot of businesses are doing anyhow.

"They are really default rules. It offers more certainty," she said.

"It's more about good practice. If things do go wrong a company has somewhere to turn to as a base-line principle, provided they [the country] are signatories and have ratified the convention."

In practice, signing and ratifying the treaty will require only minor amendments to Australia's laws, such as clarifying the timing for offering and accepting electronic contracts and establishing default rules about location - where otherwise they had not been agreed.

"It's a step forward - but it's not a massive change," Daniels added. "Obstacles are removed and there is greater certainty in the business environment."