Appendix 4

Electronic Transaction Ordinance (Apr 2000)

Section 17 of the Ordinance states that an offer and acceptance may be expressed in whole or in part by electronic records, unless the parties agree otherwise. Exceptions from the application of the Ordinance include certain documents such as wills, trusts, statutory declarations and affidavits.

Section 18 of the Ordinance provides that in the absence of agreement, the electronic record between the originator and the addressee of an electronic record to the originator if it was sent by the originator, sent with the authority of the originator or sent by an information system programmed by or on behalf of the originator to operate and to send the electronic record automatically, should not affect the laws on agency or on the formation of contracts. This section appears to suggest that computers can be construed as the originator and, therefore, have the requisite intention to form a contract. An enforceable contract will be formed by a valid online method

• Third persons cannot generally enforce rights created under a contract between others.
• It must be clear that the parties intend to be legally bound. This may happen when one party accepts an offer made by the other party (for example, clicking on an "accept" or "submit order" button after entering necessary details and reading the terms of sale). A contract may also be formed by conduct (for example, a customer accepts the supply of services or downloads software, knowing that certain license terms will apply.)
• The parties must agree all essential terms. For example, no contract will be formed if the price has not been agreed (or there is no mechanism for determining the price.)
• The terms of the agreement must be clear enough for an outsider (a judge or arbitrator) to determine their meaning. In any case, it is always advisable to ensure that the terms of any agreement are clear and unambiguous.
• There must be mutual promises by each party to the other. A gratuitous promise is not enforceable.

Section 19
Section 19(1) of the Ordinance states that, unless the originator and the addressee of an electronic record otherwise agree, an electronic record is deemed to have been sent when accepted by 'an information system outside the control of the originator or of the person who sent the electronic record on behalf of the originator'.

Section 19(2) of the Ordinance provides that, unless the originator and the addressee of an electronic record otherwise agree, receipt is deemed to have occurred at the time when the electronic record is accepted by the 'designated information system' if the addressee has designated an information system for the purpose of receiving electronic records. If the electronic record is sent to an information system of the addressee that is not the 'designated information system', or if the addressee has no 'designated information system', receipt is deemed to have occurred at the time the electronic record 'comes to the knowledge of the addressee'