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Сопутствующие документы Distr GENERAL UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW ( Twenty-seventh session )
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GENERAL

A/CN.9/390

11 April 1994

ORIGINAL: ENGLISH

UNITED NATIONS COMMISSION ON

INTERNATIONAL TRADE LAW

Twenty-seventh session

New York, 31 May-17 June 1994

REPORT OF THE WORKING GROUP ON ELECTRONIC DATA INTERCHANGE (EDI)

ON THE WORK OF ITS TWENTY-SEVENTH SESSION

(New York, 28 February-11 March 1994)

CONTENTS

Paragraphs Page

INTRODUCTION ................................................. 1-12 3

I. DELIBERATIONS AND DECISIONS ............................ 13-14 5

II. CONSIDERATION OF DRAFT PROVISIONS FOR UNIFORM

RULES ON THE LEGAL ASPECTS OF ELECTRONIC

DATA INTERCHANGE (EDI) AND RELATED MEANS

OF DATA COMMUNICATION .............................. 15-153 5

General remarks ............................................ 15 5

Title ............................................... 16-20 5

CHAPTER I. GENERAL PROVISIONS ........................... 21-78 7

Article 1. Sphere of application ............................... 21-33 7

Footnote to chapter I ......................................... 34-40 9

Footnote to article 1 ......................................... 41-43 11

Article 2. Definitions ....................................... 44-65 11

Article 3. Interpretation of the Uniform Rules ..................... 66-73 16

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Article 4. [Deleted] ........................................ 18

Paragraphs Page

[Article 5. Variation by agreement] ............................. 74-78 18

CHAPTER II. FORM REQUIREMENTS .......................... 79-143 19

Article 5 bis. .............................................. 79-87 19

Article 6. Functional equivalent of "writing" ...................... 88-96 21

Article 7. Functional equivalent of "signature" ..................... 97-109 23

Article 8. Functional equivalent of "original" ...................... 110-138 26

Article 9. Evidential value of trade data messages .................. 139-143 33

CHAPTER III. COMMUNICATION OF TRADE DATA MESSAGES ... 144-153 34

Article 10. [Binding nature] [Effectiveness] of trade data messages ...... 144-153 34

III. FUTURE WORK ............................................. 154-161 36

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INTRODUCTION

1. At its twenty-fourth session (1991), the Commission agreed that the legal issues of electronic data

interchange (EDI) would become increasingly important as the use of EDI developed and that the

Commission should undertake work in that field. The Commission agreed that the matter needed detailed

consideration by a Working Group. 1/

2. Pursuant to that decision, the Working Group on International Payments devoted its twenty-fourth

session to identifying and discussing the legal issues arising from the increased use of EDI. The report of

that session of the Working Group suggested that the review of legal issues arising out of the increased use

of EDI had demonstrated that among those issues some would most appropriately be dealt with in the

form of statutory provisions (A/CN.9/360, para. 129). As regards the possible preparation of a standard

communication agreement for world-wide use in international trade, the Working Group decided that, at

least currently, it was not necessary for the Commission to develop a standard communication agreement.

However, the Working Group noted that, in line with the flexible approach recommended to the

Commission concerning the form of the final instrument, situations might arise where the preparation of

model contractual clauses would be regarded as an appropriate way of addressing specific issues (ibid.,

para. 132). The Working Group reaffirmed the need for close cooperation between all international

organizations active in the field. It was agreed that the Commission, in view of its universal membership

and general mandate as the core legal body of the United Nations system in the field of international trade

law, should play a particularly active role in that respect (ibid., para. 133).

3. At its twenty-fifth session (1992), the Commission considered the report of the Working Group on

International Payments on the work of its twenty-fourth session (A/CN.9/360). In line with the

suggestions of the Working Group, the Commission agreed that there existed a need to investigate further

the legal issues of EDI and to develop practical rules in that field. It was agreed, along the lines suggested

by the Working Group, that, while some issues would most appropriately be dealt with in the form of

statutory provisions, other issues might more appropriately be dealt with through model contractual

clauses. After discussion, the Commission endorsed the recommendation contained in the report of the

Working Group (ibid., paras. 129-133), reaffirmed the need for active cooperation between all

international organizations active in the field and entrusted the preparation of legal rules on EDI to the

Working Group on International Payments, which it renamed the Working Group on Electronic Data

Interchange. 2/

4. At its twenty-sixth session (1993), the Commission had before it the report of the Working Group

on Electronic Data Interchange on the work of its twenty-fifth session (A/CN.9/373). The Commission

expressed its appreciation for the work accomplished by the Working Group. The Commission noted that

the Working Group had started discussing the content of a uniform law on EDI and expressed the hope


that the Working Group would proceed expeditiously with the preparation of that text.

5. It was suggested that, in addition to the work currently under way in the Working Group, there

existed a need for considering particular issues that arose out of the use of EDI in some specific

commercial contexts. The use of EDI in procurement and the replacement of paper bills of lading or other A/CN.9/390

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documents of title by EDI messages were given as examples of topics that merited specific consideration.

It was also suggested that the Commission should set a time-limit for the completion of its current task by

the Working Group. The widely prevailing view, however, was that the Working Group should continue

to work within its broad mandate established by the Commission. It was agreed that, only after it had

completed its preparation of general rules on EDI, the Working Group should discuss additional areas

where more detailed rules might be needed. 3/

6. The Working Group on Electronic Data Interchange held its twenty-sixth session at Vienna, from 11

to 22 October 1993. At that session, the Working Group considered the issues discussed in a note by the

Secretariat (A/CN.9/WG.IV/WP.57) and a proposal made by the delegation of the United Kingdom of

Great Britain and Northern Ireland (A/CN.9/WG.IV/WP.58). The Secretariat was requested to prepare,

on the basis of the deliberations of the Working Group, a set of revised articles, with possible variants, on

the issues discussed.

7. The Working Group on Electronic Data Interchange, which was composed of all States members of

the Commission, held its twenty-seventh session in New York, from 28 February to 11 March 1994. The

session was attended by representatives of the following States members of the Working Group:

Argentina, Austria, Bulgaria, Cameroon, Canada, Chile, China, Denmark, Egypt, France, Germany,

Hungary, India, Iran (Islamic Republic of), Italy, Japan, Kenya, Mexico, Morocco, Nigeria, Poland,

Russian Federation, Saudi Arabia, Singapore, Slovakia, Spain, Sudan, Thailand, Togo, Uganda, United

Kingdom of Great Britain and Northern Ireland, United States of America and Uruguay.

8. The session was attended by observers from the following States: Algeria, Australia, Bahrain,

Bolivia, Czech Republic, Côte d'Ivoire, Finland, Indonesia, Myanmar, Pakistan, Panama, Philippines,

Republic of Korea, Senegal, Sierra Leone, Sweden, Switzerland, Turkey, Ukraine and Zambia.

9. The session was attended by observers from the following international organizations: Economic

Commission for Europe (ECE), United Nations Conference on Trade and Development (UNCTAD),

Asian-African Legal Consultative Committee (AALCC), European Community (EC), Hague Conference

on Private International Law, Cairo Regional Centre for International Commercial Arbitration, Federación

Latinoamericana de Bancos (FELABAN), International Chamber of Commerce (ICC), Organization of

Islamic Capitals and Cities (OICC) and Society for Worldwide Interbank Financial Telecommunication

(SWIFT).

10. The Working Group elected the following officers:

Chairman: Mr. José-María Abascal Zamora (Mexico);

Rapporteur: Mr. Abdolhamid Faridi Araghi (Islamic Republic of Iran).

11. The Working Group had before it the following documents: provisional agenda

(A/CN.9/WG.IV/WP.59) and a note by the Secretariat containing a revised draft of uniform rules on the

legal aspects of electronic data interchange (EDI) and related means of data communication

(A/CN.9/WG.IV/WP.60).

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12. The Working Group adopted the following agenda:

1. Election of officers;

2. Adoption of the agenda;

3. Uniform rules on the legal aspects of electronic data interchange (EDI)

and related means of data communication;

4. Other business;

5. Adoption of the report.

    1. DELIBERATIONS AND DECISIONS
    2. 13. The Working Group discussed draft articles 1 to 10 as set forth in the note by the Secretariat

      (A/CN.9/WG.IV/WP.60).

      14. The deliberations and conclusions of the Working Group are set forth below in chapter II. The

      Secretariat was requested to prepare, on the basis of those deliberations and conclusions, a set of revised

      articles, to implement the decisions and conclusions of the Working Group.

      II. CONSIDERATION OF DRAFT PROVISIONS FOR UNIFORM RULES ON

      THE LEGAL ASPECTS OF ELECTRONIC DATA INTERCHANGE (EDI)

      AND RELATED MEANS OF DATA COMMUNICATION

      General remarks


      15. The Working Group noted with interest an observation that was made concerning the appearance

      of common, EDI-related issues in a number of areas of possible future work by the Commission. A

      specific example cited was the mechanism of a "registry", which might come to be a technique used to

      support international-trade-law-based solutions in diverse areas such as assignment of claims, securities

      transactions and paperless negotiable instruments, including documents of title. It was suggested that one

      response to this phenomenon by the Commission might be to formulate a general legal framework for

      registries. It was noted that the Working Group might wish to consider this question in the context of

      further deliberations on possible other issues to be dealt with upon the completion of its current work (see

      below, paras. 154-160). Such other issues might also include the preparation of a model communication

      agreement and questions related to the liability of third-party service providers.

      Title A/CN.9/390

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      16. The reference in the title to "uniform rules" gave rise to a review by the Working Group of its earlier

      decision to formulate a legal text in the form of statutory rules (A/CN.9/387,

      para. 2). It was widely agreed that the term "uniform rules" was inappropriate as it suggested a legal

      instrument in the nature of contractual rules of practice, when what was needed was statutory support of

      the practice of EDI. As to the exact form of the statutory rules, a decision that had previously been

      deferred, the Working Group expressed a preference for the form of a model law. It did so in view in

      particular of the complexity and time involved in formulating and implementing an international convention,

      difficulties that were disadvantageous in view of the urgent need for statutory rules in this area.

      17. While it was agreed that the form of the text should be that of a model law, and that this needed to

      be indicated clearly in the title, it was widely felt that, owing to the special nature of the legal text being

      prepared, a more flexible term than "model law" needed to be found. It was observed that a more flexible

      term was needed in order to reflect that the text contained a variety of provisions relating to existing rules

      scattered throughout various parts of different national laws in a typical enacting State. It was thus a

      possibility that enacting States would not necessarily incorporate the text as a whole and that the provisions

      of the model law would not necessarily appear together in any one particular place in the national law. The

      text could be described, in the parlance of one legal system, as a "miscellaneous statute amendment act".

      The Working Group agreed that this special nature of the text would be better reflected by the use of the

      term "model statutory provisions". The view was also expressed that the nature and purpose of the model

      statutory provisions could be explained in an introduction or guidelines accompanying the text.

      18. A number of misgivings were expressed as to the remainder of the title. They included: discomfort

      with the words "the legal aspects", which were described as being too vague for the title of a legislative text

      and, alternatively, were said to create the mistaken impression that the text dealt with all the legal issues

      that might be related to the use of EDI; the use of the word "data", which might be suitable for the informal

      discussions of the Working Group, but was said to be too narrow and unclear to be included in a legal text

      (see below, para. 46); the use of the word "communication", which was felt to be too narrow and

      appeared to prejudge decisions still to be made by the Working Group as to the scope of the model

      statutory provisions; the possible inadequacy of the reference at the end of the title to "related means of

      data communication"; and the potentially broad scope of transactions and activities to which the words

      "data communication" could be understood to refer.

      19. Various proposals were made aimed at addressing those concerns, while reflecting the common

      understanding that the title should take into account various possible technologies and combinations of

      technologies, along with the essential element of durable recording. Those proposals included the use of

      expressions such as: "data recording"; "computer-based records in commerce"; "electronic commerce";

      "exchange of electronic documents"; "using non-paper-based technologies"; "paperless recording and

      communication of information".

      20. Following deliberations, the Working Group was of the view that it would not be possible to fix a

      final formulation of the title until the content of the model statutory provisions, in particular the provisions

      relating to scope, had been considered and developed further. It was noted that, for the purposes of a

      working title, the term "electronic commerce" might be used, though it was observed that the use of the

      term "commerce" in the title raised questions relating to the scope of application of the model statutory A/CN.9/390

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      provisions (see below, paras. 22-27).

      CHAPTER I. GENERAL PROVISIONS

      Article 1. Sphere of application

      First sentence

      21. The Working Group discussed whether the words between square brackets ("commercial and

      administrative") should be retained. With respect to the reference to "administrative information", it was

      generally felt that the model statutory provisions should not expressly deal with the situations where a form


      requirement was prescribed by an administration for reasons of public policy. It was thus decided that the

      reference to "administrative information" should be deleted. A view was expressed that the text should

      contain express wording excluding administrative information from the scope of the model statutory

      provisions. The Working Group, however, reaffirmed the decision made at its previous sessions that the

      sphere of relationships between EDI users and public authorities should not be excluded from the scope of

      the model statutory provisions (A/CN.9/373, para. 48 and A/CN.9/387, para. 35).

      22. Divergent views were expressed with respect to the use of the notion of "commercial information".

      One view was that the model statutory provisions should somehow be limited in scope to data created,

      stored or exchanged for the purposes of commercial transactions. It was stated that such a limitation

      would appropriately reflect the general mandate of the Commission with respect to international trade law.

      It was considered, however, that the reference to the notion of "commercial information" might make it

      necessary to define that notion in the model statutory provisions. Suggestions were made to provide such

      a definition either by listing certain types of transactions as "commercial transactions" or by listing certain

      types of parties as "merchants". It was widely felt that either of those two approaches might raise

      difficulties in the context of an international instrument since existing national laws might differ as to which

      types of transactions would be regarded as "commercial" and which types of parties would be regarded as

      conducting a "commercial" activity. In that connection, it was suggested that, even if the model statutory

      provisions were generally limited in scope to "commercial information", a provision might be needed to

      make them applicable to certain data and transactions that might not be regarded as commercial, for

      example medical data, and to certain categories of professionals that might not be regarded, in many legal

      systems, as merchants.

      23. The contrary view was that any reference to "commerce" or "trade" should be avoided. In support

      of that view, it was stated that such a reference might raise difficulties, since certain common-law countries,

      as well as certain civil-law countries, did not have a discrete body of commercial law, and it was not easy

      or usual in such countries to distinguish between the legal rules that applied to "trade" transactions and

      those that applied more generally. Other examples were given of countries where the notion of "trade"

      was not commonly used and might raise a question as to its definition. On the other hand, examples were

      also given of countries where the notion of "trade" might be already in use in national legislation and might

      be interpreted differently according to the country in which the notion was used. It was stated that

      previous UNCITRAL legal texts had avoided unnecessary references to such notions as "trade" or

      "commerce", while the UNCITRAL Model Law on International Commercial Arbitration, which contained A/CN.9/390

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      such references, also provided a definition of the term "commercial". It was recalled that the same concern

      had been expressed at the previous session of the Working Group (A/CN.9/387, para. 34).

      24. In favour of deletion of any reference to "commercial information", it was also stated that the focus

      of the model statutory provisions should not be on any specific category of transactions, e.g., commercial

      transactions in the context of which various computer-based techniques might be used, but rather that it

      should be on those techniques themselves, whose common feature was that they were not paper-based. It

      was thus suggested that the text should contain a reference to "paperless creation, recording and

      communication of information".

      25. It was further stated that, should the model statutory provisions apply only to commercial

      transactions, such a limitation in scope would be inconsistent with the broad formulation of draft articles 6

      to 9, which were intended to provide alternative ways of complying with existing requirements of national

      law. It was suggested that the scope of the model statutory provisions should cover the full scope of such

      national requirements, not all of which were intended to apply in a commercial context. For example, it

      was stated that, in certain jurisdictions, there existed mandatory requirements that all guarantees be

      established in writing. It was stated that a distinction between "commercial" and "non-commercial"

      guarantees, cutting across such a legal regime, would establish an unnecessary dichotomy. Another

      suggestion was made that the scope of the model statutory provisions should cover all kinds of

      relationships under which parties were free to determine their contractual rights and obligations, to the

      exclusion of relationships where such rights and obligations were determined by mandatory rules of law.

      26. The view was expressed that, should the reference to "commercial information" be deleted, the text

      might need to be reworked so as not to result in a mere reference to the notion of "data [record]

      [message]" as defined under draft article 2 (a). Several alternative wordings were proposed for the first

      sentence. Such proposed wordings included: "These Rules apply to electronic information in the form of

      data or messages"; "These Rules apply to information related to transactions"; and "These rules apply to

      computer-based transactions intended to have legal effect". With respect to the proposed reference to the

      notion of "transaction", it was recalled that the Working Group had agreed at previous sessions that the

      focus of the model statutory provisions was on data messages or records and not on the underlying

      transaction.

      27. While considerable support was expressed in favour of deletion of any reference to "commercial

      information", the Working Group decided that the reference should be maintained in square brackets and

      that the discussion should be reopened at a later meeting, after the substantive model statutory provisions


      had been reviewed.

      Second sentence

      28. The Working Group discussed whether the second sentence of draft article 1, stating that the model

      statutory provisions "do not apply to purely oral or purely [documentary] [written] information" should be

      retained.

      29. It was stated that the meaning of both the terms "written" and "documentary" was not sufficiently A/CN.9/390

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      clear. The term "paper-based information" was suggested as an alternative. It was pointed out, however,

      that that term might not encompass certain forms in which information might appear, which should be

      excluded from the scope of application of the model statutory provisions, such as microfiche. It was

      therefore suggested that a reference to "digitalized information", i.e., information that could be processed

      by means of a computer, would be preferable.

      30. The prevailing view, however, was that the second sentence of draft article 1 should be deleted.

      Reasons given in support of deletion of the sentence included: that the model statutory provisions should

      specify the cases in which they would apply, and for that purpose draft

      article 2 (a), defining "data record" or "data message", should be sufficient; that a negative definition of the

      scope of application of the model statutory provisions, such as the exclusion of written or documentary

      information, might be confusing, since it would not be clear whether only written or documentary

      information, or other information as well, would be excluded; that such a negative definition of the scope of

      application might be inappropriate, since it might have the adverse effect of excluding certain kinds of

      information in written or documentary form, such as telegrams and telecopies, which should not be

      excluded.

      Third sentence

      31. Differing views were expressed as to whether the third sentence of draft article 1 ("Except as

      otherwise provided in these Rules, they do not apply to the substance of the information") should be

      retained.

      32. One view was that the sentence should be retained since it provided a useful rule of interpretation

      under which the burden of proof that the rules applied to the substance of a given information would be on

      the person raising such an argument. Another view was that the sentence should be retained, but slightly

      modified by replacing the word "substance", which was not sufficiently clear, by "contents" or by "rights

      and obligations arising from the underlying transaction". Yet another view was that the sentence should be

      rephrased to define the sphere of application in a positive manner.

      33. The prevailing view, however, was that the sentence should be deleted. In support of deletion, it

      was stated that the sentence was superfluous, since the principle that the model statutory provisions would

      not apply to the rights and obligations arising from the underlying transaction was self-evident. However, it

      was also stated by proponents of deletion that there were cases in which the model statutory provisions

      would apply to matters of substance of the information (e.g., draft article 12 dealing with the formation of

      contracts) and that the matter should be dealt with in each relevant article rather than in a general article

      defining the sphere of application of the model statutory provisions. It was also stated that whether the

      model statutory provisions applied to the substance of the underlying transaction was a matter to be

      determined by other applicable rules of national law, since there might be cases in which the trier of fact

      would have to consider the substance of the information in order to determine whether the model statutory

      provisions would apply.

      Footnote to chapter I

      34. The Working Group considered the question whether the issue of the relationship of the model A/CN.9/390

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      statutory provisions to consumer protection law should be dealt with in a footnote or in the text of the

      model uniform provisions.

      35. The view was expressed that dealing with the matter in a footnote was not appropriate. It was

      stated that, in a number of countries, footnotes to statutory texts were not used and the legal effect of such

      a footnote would be uncertain. It was thus suggested that the matter should be dealt with in the text of

      draft article 1 proper. It was also stated that the need to define the notion of "consumer" could be

      circumvented through the use of wording based on article 2(a) of the United Nations Convention on

      Contracts for the International Sale of Goods, which provided that the Convention did not apply to "sales

      of goods bought for personal, family or household use". In this context, a rule along the following lines was

      suggested: "Personal or household matters are out of the scope of application of the model statutory

      rules."

      36. In response, it was recalled that, at its previous sessions, the Working Group had decided that the

      issue should be dealt with in a footnote, in particular since it would be impractical to attempt to provide a

      uniform definition of the notion of "consumer" (see A/CN.9/387, para. 28 and A/CN.9/373, para. 32). In

      support of that approach, it was stated that issues of consumer protection should, to the widest possible

      extent, be left to national legislators. Moreover, it was pointed out that if the matter were to be dealt with

      in the text of the model statutory provisions, a rule setting the priority between the model statutory


      provisions and consumer protection law would have to be added. After discussion, the Working Group

      reaffirmed its previous decision that the issue of consumer protection law should be dealt with in a

      footnote.

      37. As to the precise approach to be followed with regard to consumer matters, four variants were

      before the Working Group. Variant A stated that the model statutory provisions did not deal with issues

      related to consumer protection. Variant B stated the principle that the model statutory provisions did not

      override law intended for the protection of consumers. Variant C was based on a twofold approach, i.e.,

      the model statutory provisions would not apply to consumer transactions and they would be subject to

      consumer protection law. Variant D was based on the principle that the model statutory provisions would

      not apply to consumer transactions.

      38. The view was expressed that the matter of consumer protection should be dealt with along the lines

      of variant D so as to exclude the application of the model statutory provisions to consumer transactions. In

      support of that view, it was stated that the term "consumer transactions" was a clear and objective

      criterion, while the notion of "consumer protection" might be unclear and raise difficulties. Such difficulties

      might arise particularly if a determination had to be made as to what constituted consumer protection

      legislation. Examples were given of possible conflict between the model statutory provisions and otherwise

      applicable rules of law which, although not expressly mentioning consumer protection as their purpose,

      could be interpreted as having a protective effect on consumers. For example, it was stated that

      protection-of-data-privacy law was, in a sense, consumer protection law, and yet should not be covered

      by the model statutory provisions.

      39. The prevailing view, however, was that variant D should be rejected. The Working Group

      reaffirmed the decision made at its nineteenth session that the model statutory provisions should apply to all

      messages, including messages to or from consumers, but that it should be made clear that the model A/CN.9/390

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      statutory provisions were not intended to override any consumer protection law (see A/CN.9/373, paras.

      29-31).

      40. The Working Group then focused its attention on variant B. Variant B was criticized on the ground

      that it might necessitate a determination as to whether a particular law was intended for the protection of

      consumers, which might be a difficult matter of interpretation of the law. In addition, it was stated that

      variant B might be misinterpreted as subjecting commercial law to consumer law. It was thus suggested

      that, should the variant be retained, it should be placed within brackets. The prevailing view, however,

      was in favour of the adoption of variant B, which was said to establish appropriate recognition of the

      principle that consumers could benefit from the application of the model statutory provisions, while it left

      open the possibility for legislators to provide special protection to consumers.

      Footnote to article 1

      41. The view was expressed that the model statutory provisions should apply only to international cases

      since their purpose was to facilitate international trade. It was stated that such a limitation in scope would

      be consistent with the general mandate of the Commission with respect to international trade. The contrary

      view was that the application of the model statutory provisions should not be limited to international cases.

      In support of that view, it was pointed out that legal certainty to be provided by the model statutory

      provisions was necessary for both domestic and international trade. Furthermore, a duality of regimes

      governing the use of electronic means of recording and communication of data might create a serious

      obstacle to the use of such means.

      42. After discussion, the Working Group reaffirmed the decision made at its previous session, that the

      model statutory provisions should be applicable in principle to both international and domestic cases, but

      that a footnote should indicate a possible test of internationality for use by those States that might desire to

      limit the applicability of the uniform rules to international cases (A/CN.9/387, para. 21).

      43. With respect to the text of the footnote, a number of improvements of a drafting nature were

      suggested. It was stated that the notion of "international trade interests" was too broad and potentially

      confusing since it might be interpreted as dealing indifferently with the interests of Governments and with

      the interests of commercial partners in the field of international trade. It was thus suggested that the text

      should refer to "international trade" or to "international trading interests". There was general agreement that

      the matter would need to be discussed by a drafting group, to be established by the Working Group at a

      future session.

      Article 2. Definitions

      44. The Working Group decided that its method of working with regard to draft article 2 at the current

      session would be to engage in an exchange of views on the definitions contained therein, but to generally

      reserve final decisions until it had completed its review of the draft model statutory provisions as a whole.

      Subparagraph (a) (Definition of "Data [record] [message]")

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      45. The Working Group noted that the text of the subparagraph reflected the decisions that had been


      made at the previous session (A/CN.9/387, paras. 30-39). It then proceeded to consider further various

      elements of the definition, largely from the standpoint of drafting.

      46. The view was expressed that the word "data", irrespective of whether it was paired with "record" or

      "message", was not clear, since it might be interpreted in either of two ways: as a reference to any

      information in a computer, or as a reference to information fields in EDI messages. As an alternative, an

      expression along the following lines was suggested: "'electronic record' means information as data or

      messages ...". The use of the word "electronic", it was said, would not necessarily be interpreted as

      barring future, non-electronic media. It was stated in response that the word "data" and the term "data

      record" had a specific, commonly understood connotation in practice. In response to a suggestion to use

      the term "electronic document", it was recalled that the Working Group had previously shied away from

      using the word "document" because it might connote a link to paper. Yet another suggestion was to forgo

      in the term selected words such as "electronic", in which there might appear to be an inherent reference to

      the media, and to include as an essential element in the definition the notion of digital creation, storage and

      communication of information.

      47. Another portion of the definition focused on by the Working Group was the reference to creation,

      storage and communication of information. A suggestion was made that communication or transmission

      should be a required element, a view that, as in the past, did not attract support. As regards the reference

      to creation of information, the concern was expressed that that wording, in particular if read in conjunction

      with draft article 12(2), could be read as suggesting the possibility that contracts could be concluded in the

      total absence of human intervention. Another concern with the word "created" was that it might suggest

      the possibility of purely oral communications. An amendment proposed in line with those views was the

      use of the word "recorded" in place of the word "created".

      48. While recognizing the concern that had been raised with respect to such a possible interpretation of

      the word "created", there was broad agreement that the definition needed to take into account the fact that

      industry was increasingly relying on interactive, computer-to-computer communications with little or no

      human intervention, in which software programs permitted computers to make decisions within limited

      parameters (e.g., computerized inventory control triggering computer-generated re-ordering when

      inventory stocks diminished). It was understood that, standing at the back of such purely computer-generated

      communications, there were persons, either physical or juridical, that remained ultimately

      responsible for the legal consequences of the communications. Another drafting suggestion was to replace

      "created" by "generated".

      49. Differing views were exchanged as to the choice to be made by the Working Group between the

      terms "data record" and "data message". Related concerns were raised with respect to both terms. On

      the one hand, the concern was expressed that the word "message" might suggest the exclusion of data that

      was merely stored, while on the other hand the word "record" might be read as excluding data that was

      communicated. It was suggested that the term "data statement" might be a collective term that would

      encompass both stored and communicated data. The concern raised in turn by that proposal was that the

      word "statement" might connote a link to paper and might also suggest the exclusion of computer- A/CN.9/390

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      generated data interchange. After deliberation, the Working Group decided, at least for the time being, to

      retain the term "data record", which was understood to encompass the case of computer-generated

      messages.

      50. Differing views were also expressed as to whether to retain the reference to telegramme, telex and

      telecopy. One view was that those forms of communication should be deleted from the definition.

      Reasons cited in support of deletion centred on the differences between those forms of communication and

      EDI, which included, aside from technological factors, the fact that established legal approaches existed for

      dealing with communications by telegramme and telex, if not by telecopy, which might, however, be

      understood legally as a combination of mail and photocopying.

      51. The prevailing view was to affirm the earlier decision in favour of a broad approach to media of

      communication and to retain in the definition a reference to telegramme, telex and telecopy. The Working

      Group as well did not accept a suggestion to refer only to telex and telegramme, and to delete mention of

      telecopy. It was noted in the discussion that the technological distinction between EDI and those media of

      communication was blurring as they themselves increasingly relied on technologies that provided a

      recording capability. To that it might be added that a data transaction might involve several types of

      media. A view was also expressed that, were the definition to contain a requirement of digitalization,

      uncertainty as to the inclusion of telegramme, telex and telecopy could be met. Other suggestions directed

      at the media of communication included: to include a reference to electronic mail; to avoid excluding the

      practice of issuance of a telegramme on the basis of oral transmission by telephone to the intermediary of

      the contents of the telegramme; and to forgo the use of the word "analogous", since that word might

      inadvertently suggest a link to analog technology.

      Subparagraph (b) (Definition of "Electronic data interchange (EDI)")


      52. The Working Group found the substance of the subparagraph to be generally acceptable. It was

      noted that, in the preparation of a revised draft, it might be useful to consider any definition of "EDI" that

      might be adopted by the Economic Commission for Europe (ECE) in the context of UN/EDIFACT.

      Subparagraph (c) (Definition of "[Sender] [Originator]")

      53. The Working Group noted that the text of the subparagraph reflected decisions that had been made

      at the previous session (A/CN.9/387, paras. 43-46). It then proceeded to consider further various

      elements of the definition, largely from the standpoint of drafting.

      54. As regards the choice between the words "sender" and "originator", support was expressed in

      favour of each of these words. It was widely felt, however, that the word "originator" would be more in

      line with the decision to use the word "record" in

      subparagraph (a). It was stated that the word "originator" was commonly used in practice in the context of

      communication or transmission of information.

      55. It was widely felt that, since a definition of "intermediary" was contained in

      subparagraph (e), the words "other than one performing the function of an intermediary" should be A/CN.9/390

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      replaced by the words "other than an intermediary".

      56. Several concerns were expressed with respect to the words "any person on whose behalf a data

      [record] [message] covered by these Rules purports to have been created, stored or communicated".

      One concern was that the expression "any person" was too broad and should be replaced by "a person" to

      avoid covering persons other than originators. Another concern was that the words "on whose behalf"

      might be interpreted as excluding the originator itself. While it was suggested that the text should be

      redrafted to cover expressly the originator and any other person acting on its behalf, it was widely felt that

      the text was sufficiently clear to avoid misinterpretation. It was further suggested that the words "covered

      by these Rules" were redundant, since a definition of "data record" was contained in subparagraph (a).

      There was general agreement for the deletion of those words.

      57. With respect to the notion of "person" used in the draft definition, a concern was expressed that the

      mere reference to "person" might not make it sufficiently clear that any legal person or entity on behalf of

      which a message was created was to be regarded as a sender. In particular, it was stated that messages

      that were generated automatically by computers without direct human intervention should be clearly

      regarded as "sent" by the legal entity on behalf of which the computer was operated. As regards such

      situations where messages were automatically generated, it was also stated that a special provision would

      be needed to deal with the issue of intent to send a message in such cases. It was further stated that the

      reference to the person who originated a message might be misinterpreted as covering any clerk who

      processed the data. Suggestions that were made to replace the words "any person" or "a person" included

      "a natural or legal person"; "a person or entity"; "a party"; and "anyone". A further suggestion was to

      introduce, either in the text of the model statutory provisions or in a footnote, a definition of the notion of

      "person".

      58. In response to those suggestions and concerns, it was recalled that the same discussion had taken

      place at the previous session of the Working Group (A/CN.9/387, para. 44). It was noted that the notion

      of "person" had been used in previous UNCITRAL texts, apparently without giving rise to difficulties. It

      was also noted that, should the model statutory provisions deviate from the use of the notion of "person" or

      introduce a definition of the notion of "person", difficulties might arise with respect to the interpretation of

      other UNCITRAL texts. The view was expressed that, in most legal systems, the notion of "person" was

      used to designate the subjects of rights and obligations and was consistently interpreted as covering both

      natural persons and corporate bodies. The view was also expressed that, should the notion of "entity" be

      used, the text should make it clear that it was not intended to establish any computer as the subject of

      rights and obligations. While support was expressed in favour of using the notion of "party", which was

      said to be sufficiently neutral, that notion was also objected to on the ground that it pertained to the

      contractual sphere.

      Subparagraph (d) (Definition of "Addressee")

      59. Doubts were raised as to the need for including the subparagraph on the grounds that "addressee"

      was a "natural" term, i.e., a term with a meaning that would be obvious from the context in which it was

      used, rather than a special term of art that required definition in the model statutory provisions. It was

      suggested that the only function apparently served by the definition was to exclude intermediaries from the A/CN.9/390

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      notion of "addressee". That blanket exclusion was questioned on the ground that there might be instances

      in which an intermediary would be an addressee, for example, when it was acting in a representational

      capacity with respect to an end user. In support of retaining subparagraph (d), it was pointed out that

      "addressee" was an important term, as evidenced by its repeated use throughout the model statutory

      provisions.

      60. Various observations and views were expressed aimed at modification or refinement of

      subparagraph (d), were it to be retained. Those observations included the following: the words "other

      than one performing the function of an intermediary" were not clear and might lend themselves to


      circumvention; those words might therefore be deleted, in particular if, in subparagraph (e), wording were

      used along the lines of "any person that provides the service"; the expression "any person" was too broad,

      since persons other than addressees might be involved, a concern that might be met by saying instead "the

      person" or "a person"; the term "end user" might be too narrow, since it would not be the concern of the

      law whether the addressee actually made use of a data record; the word "ultimately" should be deleted

      since it might exclude the possibility of addressees in the middle of the message-transmission chain; this

      provision might be one instance in which the term "data message" would have been a term preferable to

      "data record", in view of the focus on data transmission in the current provision; the words "covered by

      these rules" were unnecessary since all "data records", as a defined term, were covered.

      Subparagraph (e) (Definition of "Intermediary")

      61. The view was expressed that it might not be necessary to retain a definition of "intermediary".

      However, the focus of most interventions was on modification of the provision. A concern with the first

      sentence, in connection with a concern raised with regard to subparagraph (d) (see above, para. 60), was

      that the expression "as an ordinary part of its business" might lend itself to circumvention. It was suggested

      that the expression should be deleted, or, in the alternative, replaced by the expression "on behalf of a

      person". Another suggestion to ease this concern in subparagraph (e), as well as in (c) and (d), was to

      focus in those provisions on the rights and obligations with regard to a particular message.

      62. Views were also exchanged as to the second sentence of subparagraph (e), which set forth a non-exhaustive

      list of value-added services that might be provided by an intermediary. A number of

      interventions questioned the need for that sentence on the ground that the value-added services referred to

      therein were outside the message-transmission chain and therefore did not involve rights and obligations of

      concern to the model statutory provisions. The proper scope of the text, it was stated, should be the rights

      and obligations related to the transmission function of the intermediary. It was also suggested that the

      sentence contained what appeared to be a substantive rule and as such did not belong in a definition.

      Support was expressed, however, for the retention of the second sentence, on the ground that such value-added

      services performed an increasingly important commercial function and should be recognized. The

      view was also expressed that in such a case the nature of the intermediary as a service provider should be

      made clearer, in addition to making it clearer that the list of possible services in the definition was non-exhaustive.

      Subparagraph (f) (Definition of "Record")

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      63. Doubts were expressed as to the necessity or advisability of including a definition of "record" in view

      of the definition in subparagraph (a) of the term "data record". In addition to the concern over possible

      overlap and confusion with subparagraph (a), the concern was raised that the reference to a form

      requirement in the definition would overlap and possibly conflict with draft article 6.

      64. Concerning the two variants of subparagraph (f) before the Working Group, a view was expressed

      that variant A appeared to be more complicated than variant B, and that therefore the latter was

      preferable. As to the formulation of variant B, concerns included the applicability of the word

      "representation" to what was in effect a collection of electronic impulses and the clarity of the reference to

      "reproduction" of the record. An alternative formulation for the definition, focusing on the elements of

      durability and form, was proposed: "... a durable representation of information either in or capable of

      being converted into a perceivable form". The concern was again expressed, however, that such a

      definition might overlap with draft article 6.

      65. The Working Group concluded its deliberations on draft article 2 by noting that, in addition to the

      decisions that had been taken, a number of drafting suggestions that had been made could be taken into

      consideration in the preparation of a revised draft of the model statutory provisions.

      Article 3. Interpretation of the Uniform Rules

      Paragraph (1)

      66. It was noted that paragraph (1) contained an interpretation rule, modelled on article 7(1) of the

      United Nations Sales Convention, emphasizing the importance of the international character of the model

      statutory provisions and the need to promote uniformity in their application and the observance of good

      faith. Differing views were expressed as to whether the provision should be retained. One view was that,

      while such a provision might be useful in the context of an international convention, it might be irrelevant in

      the context of statutory provisions that would eventually be enacted as pieces of national legislation. It was

      stated that paragraph (1) only related to the interpretation of the model statutory provisions, but it would

      be the national law enacting the model statutory provisions, not the model statutory provisions themselves,

      which would be interpreted by the national courts, so paragraph (1) would simply not apply. It was

      pointed out that for this reason no such interpretation rule had been included in the model laws prepared

      thus far by UNCITRAL.

      67. The prevailing view, however, was that paragraph (1) should be retained. It was stated that a

      provision along the lines of paragraph (1) would enhance unification and harmonization of law, since it

      could provide useful guidance to national courts and other authorities. It was stated that in certain

      countries, more particularly in federal States, it was not uncommon for model rules to provide such

      guidance, which was aimed at limiting the extent to which a uniform text, once incorporated in local


      legislation, would be interpreted only by reference to the concepts of local law. It was also stated that in

      some jurisdictions, it was recognized that national laws could be subject to a different set of interpretation

      rules, depending on whether they were of domestic or of international origin, for example if they originated

      from organs of regional economic integration organizations. It was added that it was consistent with the A/CN.9/390

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      practice followed in contemporary international legal instruments to include such a rule aimed at the

      harmonization or uniform interpretation of national laws.

      68. A number of drafting changes were suggested. As the model statutory provisions applied to both

      national and international cases, there was a need to limit the application of this provision in the case of

      purely domestic transactions. The suggestion was therefore made that the words "where appropriate"

      should be inserted before the words "to their international character". Another suggestion was that the

      reference to international trade should be deleted, since good faith had the same meaning both in domestic

      and in international trade. Yet another suggestion was that the notion of the international character and the

      need to promote uniformity were two different goals that should be expressed in separate paragraphs, so

      as to avoid confusion.

      69. The view was expressed that one of the purposes of the model statutory provisions would be seen

      as encouraging the use of new communication technologies. The suggestion was thus made that a new

      paragraph should be inserted between the current paragraphs (1) and (2) along the following lines: "Regard

      is also to be had to the purpose of these rules to enhance trade through transactions utilizing modern

      commercial methods." That suggestion was objected to on the ground that it could be seen as mandating

      the use of electronic communications, while the intention of the Working Group was merely to remove

      obstacles in the use of such communications. The objection was also raised that the word "modern" was

      not appropriate, since today's "modern" technologies would eventually become outdated.

      Paragraph (2)

      70. It was noted that paragraph (2), which was modelled on article 7(2) of the United Nations Sales

      Convention, provided that lacunae left by the model statutory provisions were to be covered by

      application of the general principles enshrined in the statutory provisions or, in the absence of such

      principles, of the law applicable by virtue of the rules of private international law.

      71. Differing views were expressed as to whether the paragraph should be deleted, or retained and

      possibly modified. In favour of deletion of the paragraph, it was stated that it was inappropriate to include

      a reference to "the general principles on which these Rules are based" in the model statutory provisions,

      since it was not clear what principles were being referred to. It was also stated that a reference to the law

      applicable by virtue of the rules of private international law was irrelevant, since the only law applicable

      would be that of the State enacting the model statutory provisions.

      72. However, there was general agreement in the Working Group that, although paragraph (2) needed

      to be modified, a rule along those lines was useful and should be included in the model statutory provisions.

      As regards that modification, it was recalled that, at its previous session, the Working Group was agreed

      that the reference to "the law applicable by virtue of the rules of private international law" should be

      maintained only if the model statutory provisions were eventually adopted in the form of an international

      convention (see A/CN.9/387, para. 56). Accordingly, in view of its decision to use the form of a model

      law, the Working Group decided that the reference to the rules of private international law should be

      deleted.

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      73. Several suggestions were made to improve the formulation of paragraph (2), including the following:

      to place the paragraph in a separate article, since it did not establish a rule of interpretation of the model

      statutory provisions, or to amend the title of draft article 3 so as to correspond with its contents; to clarify

      the term "settled", since it was not clear whether the general principles or the applicable law would govern

      a matter that was not "settled" at all in the model statutory provisions or was "settled" only partially; to

      recast paragraph (2) so as to incorporate some of the ideas contained in the new paragraph proposed for

      insertion between the current paragraphs (1) and (2) (see above, para. 69), along the following lines: "In

      the interpretation of the model statutory provisions regard is to be had to their purpose of giving effect to

      principles formulated internationally intended to facilitate the use of modern methods of communicating and

      holding information and the need to promote uniformity in the application of these principles." The

      Working Group noted the above suggestions as possible items to be considered in the preparation of a

      revised draft of the model statutory provisions.

      Article 4. [Deleted]

      [Article 5. Variation by agreement]

      74. There was general support for the principle of party autonomy, on which draft article 5 was based.

      Differing views were expressed, however, as to how the principle should be implemented in the model

      statutory provisions. Under one view, which supported the wording of the draft article, the emphasis

      should be placed on the general principle of party autonomy, which should prevail unless otherwise


      expressly stated by the model statutory provisions. In the same vein, it was suggested that, with a view to

      simplifying and clarifying the expression of the general principle, the text should be replaced by a provision

      along the following lines: "These Rules may be varied by agreement."

      75. According to another view, certain difficulties might arise if the principle of party autonomy was

      broadly stated along the lines of draft article 5. It was stated that, as had already been pointed out at the

      previous session of the Working Group (A/CN.9/387, para. 64), the model statutory provisions might, to

      some extent, be regarded as a collection of exceptions to well-established rules regarding the form of legal

      transactions. It was recalled that such well-established rules were normally of a mandatory nature since

      they generally reflected decisions of public policy. A concern was thus expressed that an unqualified

      statement regarding the freedom of parties to derogate from the model statutory provisions might be

      misinterpreted as allowing parties, through a derogation to the model statutory provisions, to derogate from

      mandatory rules adopted for public policy reasons. It was thus suggested that, at least in respect of the

      provisions contained in chapter II and in draft article 14, the model statutory provisions should be regarded

      as stating the minimum acceptable form requirement and should, for that reason, be regarded as

      mandatory, unless they expressly stated otherwise.

      76. Another suggestion, which received considerable support, was that draft article 5 should be moved

      to chapter III. There was general agreement that chapter III dealt mostly with rights and obligations that

      should be maintained within the sphere of party autonomy. With respect to chapter II, it was stated that a

      general reference to party autonomy might not be needed, since draft articles 6, 7 and 8 expressly dealt

      with situations where agreements were concluded between parties. However, the view was expressed

      that, in the context of draft article 9, a provision on party autonomy might be needed to validate A/CN.9/390

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      agreements by parties on the means of evidence that they would use for the purposes of their contractual

      relationships.

      77. Several suggestions were made with respect to the formulation of draft article 5. It was suggested

      that party autonomy should apply not only in the context of relationships between originators and

      addressees of data records but also in the context of relationships involving intermediaries. Another

      suggestion was that the text should expressly limit party autonomy to rights and obligations arising "as

      between the contracting parties" so as not to suggest any implication as to the rights and obligations of third

      parties.

      78. After discussion, the Working Group decided that the current text of draft article 5 should be

      retained, subject to drafting improvements, and that each article of the model statutory provisions should

      be discussed with a view to determining whether parties should be allowed to derogate from its provisions.

      It was agreed that, once the review of the remaining articles of the model statutory provisions had been

      completed, the Working Group would revert to draft article 5 and decide whether it was possible to

      consolidate in a single article dealing with party autonomy all exceptions to the mandatory nature of the

      model statutory provisions. The Working Group also postponed its final decision as to whether draft

      article 5 should be moved to chapter III.

      CHAPTER II. FORM REQUIREMENTS

      Article 5 bis

      79. It was recalled that the Working Group, at its previous session, had agreed that the model statutory

      rules should contain a broad provision stating that trade data records should not be denied legal

      recognition solely as a result of their electronic form (A/CN.9/387, para. 94). It was noted that, in the

      current text of draft article 5 bis, the word "solely" had been omitted in view of concerns that had been

      expressed at the previous session of the Working Group that the use of such words as "solely" or "on the

      sole grounds" might raise uncertainty as to whether an objection to a trade data message could be

      characterized as being made on the grounds that the message was in electronic form and not on other

      grounds (see A/CN.9/387, paras. 102 and 148).

      80. Various concerns were expressed with regard to draft article 5 bis. One concern was that the draft

      article was too broadly worded and that it might produce the unintended effect that information in the form

      of a data record would have to be recognized as having legal validity irrespective of whether a contract

      stipulated that written documents should be used. Another such unintended effect might be to validate the

      use of electronic means of recording information in cases where a statutory regime prescribed the use of a

      writing, for example, in the case of cheques, bills of exchange and various kinds of documents that would

      embody title to goods or other proprietary rights.

      81. Another concern was that draft article 5 bis might contradict draft articles 6, 7 and 8. It was stated

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      under strictly controlled conditions, draft article 5 bis might be interpreted as doing away with such

      requirements without establishing any condition regarding the use of data records.


      82. Various suggestions were made to narrow the scope of draft article 5 bis. One suggestion was to

      limit the scope of the draft article to the contractual sphere and to provide expressly that parties could

      deviate from its provisions. Another suggestion was to limit the scope of draft article 5 bis to the areas

      covered by draft articles 6, 7 and 8 and to provide express reference to the conditions set forth in those

      articles. In that connection, several changes in drafting or structure were proposed. One proposal was

      that draft article 5 bis should be drafted in the form of a positive rule as an introduction to draft articles 6, 7

      and 8. Another proposal was that draft article 5 bis should be combined with draft articles 6 and 8 in a

      single provision establishing the legal validity of data records if certain conditions were met regarding the

      quality and security of the recording process. Yet another proposal was that article 5 bis should be

      redrafted along the following lines: "A data record may only be denied legal effectiveness, validity or

      enforceability on the grounds that the information it contains is required to be recorded in writing or

      presented in its original form if the conditions in article 6 or article 8 (as the case may be) are not satisfied."

      83. Further suggestions were made regarding the scope of draft article 5 bis. One suggestion was to

      exclude expressly certain instruments, such as cheques and documents of title. Another suggestion was

      that the scope of the draft article should be limited to the sphere of admissibility of evidence. In that

      connection, it was proposed that draft article 5 bis should be combined with draft article 9 to indicate that,

      for evidence purposes, the reliability of a data record should not be in question unless the party that

      objected to the admissibility of a data record established that there were reasonable grounds to consider

      that the data record might not be reliable.

      84. In response to the above-mentioned concerns and suggestions, it was recalled that the purpose of

      the draft article was only to reflect the general principle agreed upon by the Working Group at its previous

      session (see above, para.79). It was stated that the effect of the draft article should not be to solve any

      evidentiary issue or to establish the legal validity of any data record but merely to ensure that such validity

      could not be denied for the only reason that the data record was in electronic form. It was also stated that

      the effect of draft article 5 bis should not be to allow the substitution of a data record for any formal

      element that might be required under a specific legal regime. There was general agreement that, for

      example, cheques in an electronic form could not be validly presented for payment.

      85. After discussion, the Working Group reaffirmed its decision that the model statutory provisions

      should establish as a principle that data records should not be rejected simply because of their form. It

      was widely felt that such a principle should apply generally. The scope of the draft article should therefore

      not be limited to the area of evidence or to other issues dealt with under draft articles 6 to 9.

      86. It was generally felt, however, that article 5 bis needed to be redrafted to express more clearly the

      principle on which it was based. In that connection, it was suggested that the draft article should contain

      the opening words "For the purpose of any rule of law" and that a reference to the "sole grounds" should

      be introduced in the current text. Another suggestion was that the draft article should read as follows: "A

      data record shall not be denied legal effectiveness, validity or enforceability on the sole grounds that it is

      recorded in electronic form." Further suggestions were made to replace the words "on the grounds that A/CN.9/390

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      the information it contains must be recorded in [written] [documentary] form or presented in its original

      form" by the words "on the sole grounds that it is in a form covered by these Rules" or "on the sole ground

      that it was not stored or communicated in paper form". Yet another suggestion was that the draft article

      should read as follows: "Information shall not be denied legal effectiveness, validity or enforceability solely

      on the grounds that it is recorded as a data record."

      87. After discussion, the Working Group decided that draft article 5 bis should read along the following

      lines: "Information shall not be denied legal effectiveness, validity or enforceability solely on the grounds

      that it is recorded as a data record."

      Article 6. Functional equivalent of "writing"

      Title

      88. The view was expressed that the meaning of the term "functional equivalent" was not clear, in

      particular since the term was used only in the title, and that a different formulation should be sought.

      Suggestions for reformulation of the title included "form", "functional requirement of writing", and "concept

      of writing", none of which attracted sufficient support. At the same time, the Working Group was urged, in

      formulating the title and content of draft article 6, not to shy away from the use of terms that were widely

      known and understood in the EDI field.

      Paragraph (1)

      89. As to the choice between variants A and B, the Working Group was generally of the view that

      variant A was preferable. A view had been expressed, however, that variant B was preferable because

      the expressions used in variant B, in particular "displayed" and "immediately accessible" were more

      objective and ascertainable than the corresponding terms in variant A, "visible and intelligible". A concern

      had also been expressed as to the appropriateness of the expression "predicated upon the existence of a

      writing" in variant A, since the crux of the matter was the case in which a statute would have consequences

      if information was not in writing.

      90. Having settled on variant A, the Working Group engaged in a discussion of various suggestions for


      developing its content and formulation. As had been the case in the discussion of draft article 6 at the

      previous session (A/CN.9/387, paras. 66-80), the view was expressed that the conditions for the

      acceptability of a data record as a replacement for a writing should include a reference to the integrity or

      reliability of the data record, apart from or instead of the evidential rules set forth in draft article 9. It was

      stated that a data record could not be considered a true "equivalent" of writing and that the additional

      conditions were therefore needed to provide security. It was also stated that, in a number of countries,

      where existing legislation required the presentation of a writing, a data record could only be regarded as

      satisfying such a requirement if: the data record constituted a "record" under the definition suggested in

      article 2(f); there existed assurance as to the integrity of that record; and the data record was intelligible

      and accessible. It was suggested that such an added layer of conditions of acceptability, beyond those

      contained in paragraphs (1)(a) and (b) of variant A, were needed to take account of constraints in the

      infrastructure and technology of EDI and related means, illustrated in particular by cases ranging from A/CN.9/390

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      telecopies to instruments such as securities, cheques, negotiable documents of title, property deeds and

      even simple deposit tickets. A concern was also expressed as to opposability of data records to third

      parties.

      91. Formulations that were suggested for use as additional conditions, in addition to "integrity" or

      "reliability", included: faithfulness of the data record in reflecting what was actually exchanged; authenticity

      and security against falsification; and durability. A structural suggestion in line with this approach was to

      combine article 6 with article 8, in which variant A of paragraph (1)(b) referred to the integrity of

      information presented in the form of a data record. Suggestions designed to soften the impact of the

      additional conditions on the use of EDI included: to establish a rebuttable presumption of the reliability of

      data records; the application of standards such as "commercial reasonableness" or "as appropriate in the

      circumstances"; a reference to "minimal security"; and consistency in tests for reliability in articles 6, 7 and

      8.

      92. In response to the view that reference should be made to the integrity or reliability of the data

      record, it was recalled that the Working Group had discussed the matter extensively at the previous

      session and that it had been recognized that the question of integrity or reliability was a matter that went

      mainly to the evidential value or weight of the data record, a matter dealt with in draft article 9 and beyond

      the scope of draft article 6, which was limited to defining what might be considered the equivalent of a

      writing. The view was stressed that the determination of evidential value was a matter that should be left to

      the trier of fact so as to ensure that evidence that might be necessary would not be prevented from being

      presented. It was also pointed out that the concerns that had been raised with respect to integrity and

      reliability of information in an EDI environment were relevant also to writings but that such additional

      conditions being suggested were not applied to paper-based writing, except in the context of evaluating

      evidential weight. Such an approach, it was warned, would impede rather than facilitate use of EDI and

      other emerging technologies in the conduct of international trade. In particular, it was pointed out that

      additional requirements such as those suggested above (see paras. 90-91) would impede EDI by imposing

      a greater burden on data records than on routine paper writings, which were accepted as presented.

      93. As regards the instances of potential difficulty cited above (see para. 90), it was explained that there

      too questions were being raised that were intended to be dealt with elsewhere in the model statutory

      provisions: telecopies could be considered as copies, which would meet a test for writing, but beyond

      that, would have to meet the requirements for functional equivalency with an original, a matter dealt with in

      draft article 8; the questions raised with respect to securities, cheques and other instruments mentioned

      would also fall under that rule since they were instruments that traditionally had to be presented not only in

      written form, but also as originals. It was also pointed out that enacting States would have the option

      under paragraph (2) to make exclusions from the application of draft article 6. It was further noted that an

      express limitation on the opposability of data records to third parties was not merited, since

      non-opposability to third parties was a general principle of law that applied to writings as well.

      94. Differing views were expressed as to whether to retain the reference in the chapeau of variant A to

      "custom or practice". The Working Group was urged to delete that reference so as to exclude from the

      scope of the rule in draft article 6 writing requirements derived from rules of custom or practice. It was

      stated that such requirements would, in most instances, be regarded as contractual in nature and be subject A/CN.9/390

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      to contrary agreement of the parties. It was also stated that exclusion of such requirements would not

      preclude enacting States from taking account of the particular needs of practice, as well as of differences in

      circumstances and understanding in different countries. Support for retention of the reference was

      expressed on the ground that the application of draft article 6 to statutory writing requirements rules

      indicated that it would be appropriate to apply the draft article also to writing requirements derived from

      rules of custom or practice. After deliberation, it was decided to delete the reference to rules of custom or

      practice. Concerns were also expressed as to the words "any rule of law", which might, for example, have

      the effect of application of draft article 6 to administrative requirements. Suggestions to meet that concern


      included to use an expression along the lines of "the law requires", or to limit the reference to rules of trade

      law.

      95. Upon concluding its deliberations on draft article 6, and pending possible further deliberations at a

      later stage, following the review in particular of draft article 9, the Working Group agreed that the next

      draft of paragraph (1) would be based on variant A, subject to the deletion of the reference to rules of

      custom or practice. It was also agreed that, to address concerns that had been raised, the words "visible

      and intelligible" would be replaced by the word "durable", in square brackets.

      Paragraph (2)

      96. The Working Group decided to postpone its consideration of paragraph (2) of draft articles 6, 7

      and 8 until it had completed its review of the other provisions of those articles (see below, paras. 128-

      133).

      Article 7. Functional equivalent of "signature"

      Paragraph (1)

      Chapeau

      97. There was general agreement with the thrust of the chapeau. A proposal was made to delete the

      words "custom or practice". In support of deletion, it was stated that the reference to "custom or practice"

      was superfluous since custom and practice were sources of law and, as such, were implicit in the words

      "any rule of law". It was added that to the extent that "custom or practice" were not recognized as sources

      of law, they would be beyond the scope of application of the model statutory rules. After discussion, the

      Working Group decided that the reference to "custom or practice" in the chapeau should be deleted.

      98. With respect to the use of the words "expressly or impliedly", it was stated that, while requirements

      for signatures would most often be express, there existed a need to cover more explicitly the situation

      where a rule of law, while not expressly requiring a signature, provided for certain consequences if a

      signature was not presented. There was general agreement that the text should be made clearer in that

      respect.

      99. As a matter of drafting, a few suggestions were made. One suggestion was to replace the words

      "requires information to be signed" by words such as "requires a signature" or "requires a document to be A/CN.9/390

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      signed". Another suggestion was to insert after the word "satisfied" the words "in relation to a data

      record".

      Subparagraph (a)

      100. Differing views were expressed as to whether subparagraph (a) should be retained or deleted. In

      support of deletion, it was stated that requirements for signature, which were usually set by national

      mandatory rules of law, should not be made subject to alteration by agreement of the parties. In

      accordance with that view, draft article 5, recognizing party autonomy should be moved from chapter I to

      chapter III, so that it would not apply to chapter II (see above, paras. 76 and 78).

      101. In support of subparagraph (a), it was stated that, from the standpoint of practice in high-speed,

      high-volume transactions, it would be important to recognize the freedom of parties to agree on the level

      and type of authentication method. In addition, it was pointed out that subparagraph (a) was not intended

      to alter requirements set by mandatory rules of law but merely to permit parties to agree on a particular

      authentication method in cases in which the law required a "signature" without mandating a specific

      authentication method. In that regard, it was stated that, even if subparagraph (a) had the unintended

      effect of altering statutory requirements for signature, it could not affect third parties. Moreover, it was

      said that, in cases where the rule contained in subparagraph (a) might conflict with a national mandatory

      rule of law, its application could be excluded by virtue of paragraph (2). Apart from retention of

      subparagraph (a), proposed methods of implementing in the model statutory provisions a rule recognizing

      party autonomy with respect to signature included: keeping draft article 5 in chapter I or recognizing party

      autonomy in subparagraphs (b) or (c), or devising a default rule that would cover cases where there was

      no rule of law and no agreement of the parties requiring signature. After discussion, the Working Group

      decided to retain subparagraph (a) within brackets.

      102. A related question was raised that subparagraph (a) in its current formulation might not sufficiently

      cover system rules, i.e., rules that were implemented in third-party service agreements. In that regard it

      was suggested that system rules should be dealt with in the context of draft article 5 dealing with party

      autonomy in general. Another suggestion was that the issues of system rules as well as trading partner

      agreements might be usefully explained in a guide to enactment of the model statutory provisions.

      Subparagraphs (b) and (c)

      103. There was general agreement in the Working Group on the principles embodied in subparagraphs

      (b) and (c). It was noted that subparagraphs (b) and (c) recognized the dual function of a signature to

      identify the originator and to confirm that the originator approved the content of a data record. The

      Working Group then turned to the question of the formulation of subparagraphs (b) and (c).

      "method [of authentication]"

      104. The Working Group discussed whether the words "of authentication" that appeared within brackets

      in subparagraph (b) should be retained or deleted. In support of deletion, it was stated that the term A/CN.9/390

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      "authentication" was inappropriate, since it might be misinterpreted as suggesting a reference to notarization

      of documents. Another objection to the notion of authentication was that, while it might be a term of art in

      the context of certain EDI techniques, it might be meaningless or unclear in the context of other techniques.


      Moreover, it was stated that "authentication" meant nothing more than a method of identifying the originator

      of a data record and of establishing the originator's approval of the contents of the data record. For that

      reason, it was stated that use of the term would add nothing to the existing language of

      subparagraph (b). It was suggested that the words "method of authentication" should be replaced by the

      word "procedure".

      105. In support of retention of the words "method of authentication", it was stated that the notion of

      "authentication" was used in EDI as well as in non-EDI communications and that its meaning was well

      established in both types of situations. It was recognized, however, that it might be useful to include in the

      model statutory provisions a definition of authentication. In that regard, a definition along the following

      lines was suggested: "authentication means a process providing certainty on the identity of the originator of

      a data record". Another suggestion was to use the following wording: "authentication is proof of

      identification or the process by which claimed identity is verified". With respect to the suggested wording,

      it was stated that, at least in the context of EDI, the notion of authentication might be used to refer both to

      the identification of the sender and to the integrity of the content of a data record. After discussion, the

      Working Group decided to retain the reference to authentication within brackets.

      "created or communicated"

      106. The suggestion was made that, in view of the decision that the model statutory provisions should

      apply to "data records", irrespective of whether such "records" were intended or not to be communicated,

      the formulation of subparagraph (b) might need to be reconsidered. A suggestion was made to replace the

      words "the data [record] was created or communicated" by the words "a data statement is made".

      Another suggestion was to refer to the identity of the originator and its intention that the data record be

      transmitted". In addition, the concern was expressed that the word "person", following the words "created

      or communicated", was not clear. The Working Group requested the Secretariat to redraft that part of

      subparagraph (b) taking into account the suggestions made.

      "technically appropriate"

      107. The Working Group considered the question whether the term "technically" that appeared within

      brackets in subparagraph (c) should be deleted or whether the term "technically appropriate" should be

      replaced by the term "commercially reasonable". In support of deletion, it was stated that the term was

      unnecessary, in the light of the reference to a method as reliable as appropriate in view of all

      circumstances. In addition, it was pointed out that use of that term had the effect of overemphasizing

      technical considerations at the expense of other substantive considerations, such as the economic value of

      the transaction involved. On the other hand, it was stated that it might be more appropriate to require that

      the method of authentication should be "commercially reasonable". It was added that the words

      "commercially reasonable", used also in the context of the UNCITRAL Model Law on International Credit

      Transfers, introduced a well-known objective criterion on the basis of which the reliability of an

      authentication method could be assessed. While interest was expressed in the addition of the term A/CN.9/390

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      "commercially reasonable", the use of the term was objected to on the ground of considerations raised at

      the previous session of the Working Group (see A/CN.9/387, para. 85). After discussion, the Working

      Group decided to delete the term "technically", without reaching a final resolution of whether to include a

      reference to commercial reasonableness.

      "including [any agreement between the [sender] [originator] and the addressee of the data [record]

      [message] and any relevant commercial usage]"

      108. It was stated that it was inappropriate to list factors on the basis of which the reliability of a method

      of authentication could be assessed. In support of deletion of the corresponding wording at the end of

      subparagraph (b), it was pointed out that such listing of factors might appear to be exhaustive, while other

      factors might be relevant in assessing the reliability of an authentication method, e.g., availability of

      alternative methods of authentication, or the value and the importance of the transaction involved. The

      view was expressed, however, that the reference to any agreement between the parties should be retained

      in draft article 7 or, if that reference were deleted from draft article 7, that draft article 5 should remain in

      chapter I so that the model statutory provisions would recognize the freedom of the parties to choose an

      authentication method (see above, paras. 76 and 78). After discussion, the Working Group decided that

      the reference to agreement of the parties should be maintained within brackets for further consideration at

      a later stage and that the words "and any relevant commercial usage" should be deleted.

      Paragraph (2)

      109. The Working Group decided to postpone its consideration of paragraph (2) of draft articles 6, 7

      and 8 until it had completed its review of the other provisions of those articles (see below, paras. 128-

      133).

      Article 8. Functional equivalent of "original"

      General remarks

      110. Differing views were expressed as to whether draft article 8 should be retained. In support of

      deletion, it was stated that it was impossible to speak of "original" data records, since if "original" were

      defined as a medium on which information was fixed for the first time, the addressee of a data record

      would always receive a copy thereof. Another view was that a rule along the lines of draft article 8 was

      useful but that it should be put in a different context. In support of that view, it was pointed out that the

      notion of "original" should be dealt with in draft article 6, since usually an "original" was meant whenever


      the law required a writing (see above, para. 90). Moreover, it was stated that the notion of "original"

      could be dealt with in draft article 9, since it was useful for purposes of admissibility of evidence and

      evidential weight, which were dealt with in that draft article.

      111. The prevailing view, however, was that draft article 8 should be retained. A number of reasons

      were given in support of its retention. One reason was that the draft article was essential since in practice

      many disputes related to the question of originality of documents and in electronic commerce the

      requirement for presentation of originals constituted one of the main obstacles that the model statutory rules A/CN.9/390

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      should try to remove. Another reason was that a rule along the lines of draft article 8 could be useful in

      granting the legal recognition of original documents to certain data records, such as invoices which were in

      the form of printouts and could not have the appearance of originality that, for example, bills of lading had.

      Yet another reason was that draft article 8 was necessary since, although in some jurisdictions an "original"

      was meant whenever a "writing" was required, the model statutory provisions dealt with "writing",

      "signature" and "original" in draft articles 6, 7 and 8 respectively as separate concepts. Yet another reason

      was that draft article 8 was useful in clarifying the notions of "writing" and "original", in particular in view of

      their importance for purposes of evidence.

      112. The Working Group recalled that, at its previous session, it had been felt that draft

      article 8 might be pertinent to documents of title and negotiable instruments, in which the notion of

      uniqueness of an original was particularly relevant (see A/CN.9/387, paras. 91-97). In line with the

      decision taken by the Working Group in the consideration of draft article 1, it was clarified that the model

      statutory provisions were not intended to apply to documents of title and negotiable instruments, or to such

      areas of law where special requirements existed with respect to registration or notarization of writings, e.g.,

      family matters or the sale of real estate. In that regard, a note of caution was struck that draft article 8

      could provide guidance as to the meaning of "original" in the context of party autonomy but should avoid

      defining "original" for the purposes of national mandatory law, in the context of which an original could be

      required for a number of considerations that went beyond the scope of application of the model statutory

      rules.

      Paragraph (1)

      Opening words

      "any rule of law"

      113. At the outset, the Working Group recalled that the focus of the draft article should be on providing a

      substitute for requirements that stemmed from existing rules of law regarding the use of originals. The

      focus of the draft article should not be on contractual requirements or on requirements that were rooted in

      custom or practice.

      114. A concern was expressed that the words "any rule of law" might be interpreted as making draft

      article 8 applicable to administrative requirements. Suggestions to meet that concern included: to use an

      expression such as "the law requires", or to limit the scope of the draft article to the area of trade law. It

      was recalled, however, that the Working Group, under draft article 1, had decided that administrative

      requirements, while not constituting the focus of the model statutory provisions, should not be excluded

      from their scope. After discussion, the Working Group adopted the words "a rule of law".

      "custom or practice"

      115. The view was expressed that, in line with the decision made in the context of draft articles 6 and 7,

      the reference to custom or practice should be deleted. It was stated that, in many countries, requirements

      of custom or practice would be considered either as contractual in nature, e.g., where rules of custom or A/CN.9/390

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      practice were incorporated expressly or impliedly by parties in their trading terms and conditions, or as a

      rule of law, e.g., where certain usages would be recognized as sources of law by regulatory authorities or

      by case-law.

      116. In response, it was pointed out that often it was not only rules of law but also practice or custom

      that required information to be presented in original form. For example, it was stated that, in certain

      countries, customs and practices of port authorities would have a legal value of their own, in the absence of

      contractual or statutory rules, and that such rules of custom might constitute considerable obstacles to the

      use of EDI, which the model statutory provisions should attempt to overcome.

      117. After discussion, the Working Group decided, in line with its decision to focus on statutory

      requirements in the context of draft article 8, to delete the reference to custom or practice from the

      paragraph. However, it was felt that the situations where obstacles to EDI arose from rules of custom or

      practice regarding the use of originals might need to be reconsidered after the entire draft article had been

      reviewed. The Working Group took note of a suggestion that a separate rule might need to be devised in

      the context of a separate article or in the context of article 9 (see below, paras. 134-138).

      "expressly or impliedly"

      118. It was stated that, while requirements for originals would most often be express, there existed a

      need to cover more explicitly the situation where a rule of law, while not expressly requiring the use of an


      original, provided for certain consequences if an original was not presented. There was general agreement

      that the text should be made clearer in that respect.

      "in its original form"

      119. It was suggested that the words "in its original form" should be replaced by the words "with its

      original contents". That suggestion was objected to on the ground that, in practice, disputes arose with

      regard to both the form and the content of information.

      Subparagraph (a)

      120. The view was expressed that subparagraph (a) was needed to establish the principle of party

      autonomy with respect to original requirements. The prevailing view, however, was that there existed no

      need for an express provision validating private agreements in the absence of mandatory requirements of

      law, i.e., in the absence of legal obstacles to the use of EDI. It was also recalled that the appropriate focus

      for draft article 8, and for chapter II in general, was on mandatory requirements of law, not on contractual

      matters, which should be dealt with separately, under draft article 5 or in the context of chapter III (see

      above, paras. 76 and 78).

      121. Divergent views were expressed as to how the statutory rule established in draft article 8 would

      interplay with the principle of party autonomy. Under one view, draft article 8 should be regarded as

      stating the minimum acceptable form requirement to be met by a data record for it to be regarded as the

      functional equivalent of an original. It was stated that parties should not be free to derogate from the A/CN.9/390

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      provisions of draft article 8, for the same reasons that they would not be free to derogate from existing

      mandatory rules which would be replaced by draft article 8 (see above, para. 75). It was thus suggested that subparagraph (a) should be deleted. Another view was that the statutory provisions contained in draft article 8, and in chapter II in general, should be

      used to promote the use of agreed procedures between parties. It was thus suggested that the agreement

      of the parties should be the foremost element in the definition of a functional equivalent of "original" and that

      subparagraph (a) should be maintained. It was generally recognized, however, that, even if contractual

      stipulations were to be regarded under subparagraph (a) as an element of the statutory definition of the

      functional equivalent of "original", the principle of privity of contract would limit the ambit of such

      stipulations, which could not affect the rights and obligations of third parties. It was thus recognized that, in

      all likelihood, retention or deletion of subparagraph (a) would not result in significantly different situations in

      practice. After discussion, the Working Group decided to delete subparagraph (a).

      Variants A and B

      122. Support was expressed in favour of both variants. In favour of variant A, it was said that it

      established a clearer and simpler test. It was stated that variant A had the advantage of emphasizing the

      importance of the integrity of the information for its originality. However, it was suggested that the notion

      of "integrity" might need to be further clarified in the provision. It was suggested that the following

      references should be built into the text of variant A as elements to be considered when assessing integrity:

      systematic recording of the information, assurance that the information was recorded without lacunae and

      protection of the data against alteration. Another suggestion was that the notion of integrity should be

      clarified by including a reference to the notion of "record", which had been considered under draft article 1.

      123. In favour of variant B, it was said that it had the advantage of linking the concept of originality to a

      method of authentication and that it appropriately put the focus on the method of authentication to be

      followed in order to meet the requirement. It also was said to provide appropriate flexibility by

      establishing that, in each given case, the reliability of the method of authentication would be assessed with

      regard to circumstances. In was stated that a reference to non-alteration might be more explicit than the

      notion of integrity, which was said to be unclear, in particular as to whether it related to integrity of the data

      or integrity of the support on which the data were affixed. However, the reference to the notion of

      "authentication" in variant B was objected to for reasons already expressed in the context of the discussion

      on draft article 7 (see above, paras. 104-105).

      124. It was widely felt that variants A and B should be combined and that the resulting text should

      contain the following elements: a simple criterion such as integrity; a description of the elements to be

      taken into account in assessing the integrity; and an element of flexibility, e.g., a reference to circumstances.

      125. A suggestion was made that, rather than trying to define originality of data records on the basis of

      paper-based considerations, draft article 8 should focus on how to satisfy requirements for originals, since

      data records in fact would never be the equivalent of paper documents. In that connection, the suggestion

      was made that language along the following lines could be used: A/CN.9/390

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      "Where a rule of law requires an original, a data record shall be considered as satisfying that

      requirement when:

      "(a) the data record constitutes a 'record' under article 2 (f); and

      "(b) the integrity of the record has been preserved."

      It was stated that consideration might be given to adding two other optional requirements to the notion of

      originality of data records, i.e., uniqueness of the data record, and authentication along the lines of variant


      B.

      126. Another suggestion was that the notion of originality should be linked with the possibility for the data

      record to be displayed. It was also suggested that the provision should contain a reference to the notion

      that original information should have remained unaltered between the time of its original recording and the

      time when it was displayed. A wording along the following lines was suggested:

      "Where law requires information to be presented in the form of an original record or provides for

      certain consequences if it is not, that requirement shall be satisfied in relation to information

      contained in a data record if:

      "(a) that information is displayed to the person to whom it is to be presented; and

      "(b) there exists a reliable assurance as to the integrity of the information between the time it was

      recorded and the time it is displayed."

      The reference to the information being "displayed" was objected to on the ground that it might establish a

      subjective criterion, which might be met or not, depending upon the will of the addressee. In response to

      that concern, it was suggested that the word "displayed" could be replaced by the following: "displayed in a

      form which enables it to be accessible for the purpose of reference as it would have been if it had been

      recorded in an original record".

      127. After discussion, the Working Group agreed that paragraph (1) should be revised along the

      following lines:

      "(1) Where a rule of law requires information to be presented in the form of an original record, or

      provides for certain consequences if it is not, that requirement shall be satisfied in relation to a data

      [record] containing the requisite information if:

      "(a) that information is displayed to the person to whom it is to be presented; and

      "(b) there exists a reliable assurance as to the integrity of the information between the time the

      originator first composed the information in its final form, as a data [record] or as a record of any

      other kind, and the time that the information is displayed.

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      "(2) Where any question is raised as to whether paragraph (1)(b) is satisfied:

      "(a) the criteria for assessing integrity are whether the information has remained complete and,

      apart from the addition of any endorsement, unaltered; and

      "(b) the standard of reliability required is to be assessed in the light of the purpose for which

      the relevant record was made and all the circumstances."

      Paragraph (2)

      128. Various views were expressed as to paragraph (2), which provided that an enacting State might

      wish to exclude the application of draft article 8 from situations to be specified by it. Many remarks were

      made in the discussion directed not only at draft article 8(2), but also at the analogous provisions found in

      draft articles 6(2) and 7(2) (see above, paras. 96 and 109).

      129. One category of views was that paragraph (2) should specifically exclude certain types of situations,

      depending in particular on the purpose of the formal requirement in question. One such type of situation

      was said to be the case of writing requirements intended to provide notice or warning of specific factual or

      legal risks, for example, requirements for warnings to be placed on certain types of products. A

      formulation along the following lines was proposed to embody that approach: "The provisions of this

      article do not apply if 'writing' is required by law in order to give notice to the sender or the addressee in

      regard to factual or legal risks."

      130. Other cases suggested for specific exclusion were negotiable instruments, documents of title and

      formalities required pursuant to international treaty obligations of the enacting State (e.g., the requirement

      that a cheque be in writing pursuant to the Convention providing a Uniform Law for Cheques,

      Geneva, 1931). It was suggested in the light of those cases that the current formulation was unclear since

      it might suggest a choice for the enacting State with respect to requirements that in fact had to be applied

      pursuant to existing international obligations of the enacting State.

      131. A differing view was that, on a variety of grounds and notwithstanding the concerns that had been

      raised, it was not necessary or appropriate to provide for exclusions as in

      paragraph (2) and its sister provisions in draft articles 6 and 7. As to the proposal to specifically exclude

      requirements with a warning purpose, it was suggested that the purpose of statutory requirements would

      often be unclear, thereby enhancing the possibility that a purpose-related test could be used to circumvent

      the model statutory provisions. It was also suggested that the provisions dealing with matters such as

      warning requirements were a distinct area of the law not likely to be confused with the limited purpose and

      subject-matter of the model statutory provisions.

      132. Opposition was also expressed to exclusion in paragraph (2) of negotiable instruments and

      documents of title. It was said that this would raise needless obstacles to the development of EDI, since

      what the model statutory provisions contained were very fundamental principles and approaches that were

      likely, to one degree or another, to find application in those cases. It was suggested that the concern with

      negotiable instruments, securities and the like should not be exaggerated since it would be obvious that the A/CN.9/390

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      model statutory provisions were not meant to be a full set of structured, operational rules of the type

      required for such instruments. The concern was also raised that a blanket exclusion would not only


      needlessly prejudge questions that the Working Group was likely to take up in the near future, but also fail

      to take account of developments in practice. In that connection, it was reported that EDI was being used,

      for example, for certain types of negotiable warehouse receipts. It was stated that, should the Working

      Group wish to exclude any kind of situation or any area of law from the scope of draft articles 6, 7 and 8,

      it should focus on those kinds of situations and areas of law that were beyond the power of the enacting

      State to change by means of a statute.

      133. The prevailing view was that paragraph (2), as its sister provisions in draft articles 6

      and 7, should remain essentially in its current form, which did not recommend any specific exclusions, but

      merely indicated that there was a choice for enacting States to make. Such an approach, it was said,

      would recognize that the matter of specifying exclusions should be left to enacting States, an approach that

      would take better account of differences in national circumstances. It would also avoid the risk that a

      listing of exclusions in the model statutory provisions might err, on the side either of inclusion or exclusion.

      In response to a suggestion that it might be appropriate to introduce a footnote drawing the attention of

      legislators to certain areas of the law or certain types of situations that might be excluded from the scope of

      the model statutory provisions, it was widely felt that the matter would more appropriately be dealt with in

      a guide to enactment of the model statutory provisions, which might be prepared at a later stage.

      Suggested "default rule"

      134. At the close of the discussion on draft article 8, it was suggested that a rule might be considered for

      inclusion in the model statutory provisions establishing the functional equivalent of "original" in the case

      where no requirement of either contract or statutory law was applicable in that respect. It was stated that,

      in addition to dealing with custom and practice (see above, paras. 115-117), such a rule would have the

      advantage of providing a default rule to supplement the terms of agreements in cases of gaps or omissions

      in contractual stipulations, e.g., interchange agreements or "system rules". Doubts were expressed as to

      whether it would be appropriate to attempt to regulate custom or practice by way of a statutory

      instrument. However, considerable interest was expressed in the possibility of preparing a default rule to

      supplement contracts.

      135. The following formulation was suggested for possible inclusion as a separate paragraph of draft

      article 8 or as a separate article:

      "In the absence of any express or implied agreement and any rule of law requiring the information

      to be in the form of an original document, information in the form of a data [record] shall be

      accorded equal weight to information of article 8(1)(b)."

      136. Another formulation was proposed, based on a negative wording, which was proposed for inclusion

      in draft article 9:

      "In the absence of any express or implied agreement and any rule of law requiring the information

      to be in the form of an original document, in any legal proceedings, information in the form of a data A/CN.9/390

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      [record] shall not be accorded any less weight [solely] on the grounds that it is not contained in an

      original document if article 8(1)(b) is satisfied."

      137. Both proposals were objected to on the grounds that they provided rules to assess the evidential

      weight of data records. It was stated that nothing in the model statutory provisions should limit the

      authority of courts to decide on the evidential weight to be given to information presented in paperless

      form. In response, it was stated that one of the purposes of the model statutory provisions was to enhance

      certainty, which might include providing guidance to the trier of facts. It was noted that the effect of the

      suggested wordings would not be to modify the principle embodied in draft article 9(2) that information

      provided in the form of a data [record] would be given "due evidential weight".

      138. After discussion, the Working Group agreed that the possible preparation of a "default rule" needed

      further consideration. The Secretariat was requested to consider the preparation of a draft provision

      reflecting the above discussion.

      Article 9. Admissibility and evidential value of data records

      139. There was general agreement in the Working Group on the principles stated in draft article 9.

      However, differing opinions were expressed as to the best manner in which those principles could be

      formulated.

      140. One view was that the draft article should be deleted and the basic criteria for the admissibility of

      data records should instead be included in draft article 6. It was stated that draft articles 9 and 6 dealt

      with the same issue, i.e., the basic criteria to be met for data records to be treated in the same manner as

      writings. As to other elements of draft article 9, the suggestion was made that they should be deleted:

      subparagraph (a) of paragraph (1) because it duplicated the principle expressed in draft article 5 bis that

      data records should not be denied legal value on the sole ground that they were in electronic form; the term

      "best evidence" in subparagraph (b) of paragraph (1) because it was, in some jurisdictions, meaningless;

      paragraph (2) because stating that data records would be given due evidential weight would be stating the

      obvious. It was suggested that the various factors listed in the second sentence of paragraph (2) would be

      more appropriate in a commentary than in the text of the model statutory provisions.


      141. The prevailing view, however, was that draft article 9 should be retained. It was stated that

      paragraph (1), establishing that data records should not be denied admissibility as evidence in legal

      proceedings on the sole ground that they were in electronic form, put appropriate emphasis on the general

      principle stated in draft article 5 bis and was needed to make it expressly applicable to admissibility of

      evidence, an area in which particularly complex issues might arise in certain jurisdictions. In addition, it

      was generally felt that paragraph (2), which provided useful guidance as to how the evidential value of data

      records should be assessed (e.g., depending on whether they were created, stored or communicated in a

      reliable manner) might be seen as introducing an appropriate qualification of the principle enshrined in

      paragraph (1).

      142. As to the precise formulation of draft article 9, a number of suggestions were made. One suggestion

      was that paragraph (1) should be recast in a positive way. It was stated that the purpose of that paragraph A/CN.9/390

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      was to eliminate barriers to the admissibility of data records in legal proceedings and that that purpose

      might be better served if the principle were expressed through a positive formulation. Another suggestion

      was that the term "solely" in subparagraphs (a)

      and (b) should be deleted, since in the case of an objection to admission of data records it might be

      difficult to determine whether the objection was on the ground that the record was in electronic form or

      whether other grounds were involved. Yet another suggestion was that appropriate language should be

      added at the end of the second sentence of paragraph (2) so as to make it clearer that the assessment of

      the evidential weight of data records could be based on any other factor not listed in paragraph (2). As to

      the suggestion to delete the reference to the "best evidence" rule, the Working Group agreed that the

      reference should be maintained. It was recognized that the term "best evidence" was a term understood in

      and necessary for common law jurisdictions. In addition, it was pointed out that States in which the term

      was meaningless could adopt the model statutory rules without the reference to the "best evidence" rule.

      143. After discussion, the Working Group adopted the text of draft article 9, subject to drafting

      improvements. It was agreed that words along the lines of "and any other relevant factor" should be added

      at the end of paragraph (2). It was also agreed that the word "solely" should be deleted from

      subparagraphs (a) and (b) of paragraph (1).

      CHAPTER III. COMMUNICATION OF DATA [RECORDS] [MESSAGES]

      Article 10. Effectiveness of data [records] [messages]

      144. In view of the fact that only a limited time remained at the current session, the Working Group

      engaged only in a general review of the draft of article 10, which implemented the decisions taken at the

      twenty-seventh session (A/CN.9/387, paras. 110-132).

      145. It was noted that draft article 10, in line with the intended scope of chapter III, dealt with the effects

      of the communication of data records and that it did not focus on the creation or maintenance of data

      records. It was suggested that the title of draft article 10 should reflect this by referring to communication

      of data records. Other suggestions that were made with respect to the title of draft article 10 included:

      "obligations binding on the originator of a trade data record" and "right to repudiate data records".

      146. With regard to paragraph (1), a number of suggestions were made. One suggestion was that the

      word "issued" should be replaced by the word "transmitted" since it was not clear whether a data record

      was "issued" at the time it was created or at the time it was communicated. Another suggestion was that

      the opening words of paragraph (2), "As between the [sender] [originator] and the addressee," should be

      inserted at the beginning of paragraph (1), since the communication of a data record should produce

      effects only between the sender and the recipient and not against third parties. Yet another suggestion was

      that the reference to amendment or revocation should be deleted. In support of that suggestion, it was

      stated that, while such reference was meaningful in article 5 of the UNCITRAL Model Law on

      International Credit Transfers dealing with payment orders and their revocation or amendment, on which

      draft article 10 had been modelled, it was unnecessary in draft article 10. It was explained that a

      revocation or amendment of a data record made by electronic means would be a data record covered by A/CN.9/390

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      the model statutory provisions, while a revocation or amendment of a data record made by other means

      should fall outside the scope of the model statutory provisions.

      147. A concern was expressed that the words "is deemed to have approved the content" in paragraphs

      (1), (3) and (5) might overly burden the originator. It was stated that, if a data record was issued by the

      originator, or on its behalf, those words created an irrebuttable presumption that the originator approved

      the content of the record as received. In order to avoid that unfair result, the suggestion was made that the

      words "is deemed to have approved" should be replaced by the words "is presumed to have approved".

      Moreover, it was felt that the presumption should not refer to approval of the "content" of a data record

      but to approval of its "sending" by the originator.

      148. The suggestion was objected to on the ground that such an irrebuttable presumption was consistent


      with the purpose of the model statutory rules, since trading partners could be discouraged from using

      electronic means of communications if the recipient could not rely on the data record as received. In

      addition, the suggestion was objected to on the ground that an irrebuttable presumption would cause no

      problems since, if there was an error in the data record as received, it would be covered by paragraph (5)

      or the national applicable law of mistake. Moreover, it was recalled that the words "is deemed to have

      approved" originated from the UNCITRAL Model Law on International Credit Transfers and that at its

      previous session the Working Group agreed that the model statutory provisions should use, to the extent

      appropriate, language that was consistent with the language of the Model Law. However, a view was that

      the words "is deemed to have approved" should not be interpreted as establishing an irrebuttable

      presumption, since paragraph (5) provided that the presumption would not apply in case of error.

      149. With a view to addressing the various views and concerns that had been expressed, a proposal was

      made that paragraph (1) should be reformulated so as to create an irrebuttable presumption as to whether

      the sender who had signed the data record would be deemed as having approved the sending of the data

      record, and a rebuttable presumption as to whether the sender would be deemed as having approved the

      content of the data record. Some support was expressed in favour of that proposal.

      150. Although it was generally agreed that paragraphs (1), (2) and (3) were useful, it was suggested that

      they needed to be simplified. It was stated that those paragraphs should focus on the attribution of a data

      record to the originator, in the case where the data record was actually transmitted by the originator itself,

      or through an agent, or in the case where the addressee properly applied a reasonable method of

      authentication that had previously been agreed upon with the originator. With regard to paragraphs (2)

      and (3)(b), the concern was expressed that the meaning of the "verification" referred to therein was not

      clear. With regard to

      paragraph (3)(b), the concern was expressed that, in the current formulation, the originator could be bound

      merely because the addressee verified the authentication by a reasonable method, even in the absence of

      any previous relationship with the addressee. As to

      paragraph (4), a concern was expressed that it might allow the party with the stronger bargaining power to

      impose on the weaker party an unreasonable authentication method. It was suggested that paragraph (4)

      should be deleted.

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      151. Differing views were expressed as to whether paragraph (5) should be retained. In support of

      retention, it was stated that the paragraph was useful in providing some protection to the originator in case

      of errors in the transmission of a data record. In support of deletion, it was suggested that paragraph (5)

      was unnecessary since it essentially dealt with the issue of mistake, which should be dealt with under other

      applicable law. It was also suggested that paragraph (5) should be redrafted in terms of a presumption.

      152. As to paragraph (6), a number of concerns were raised. One concern was that

      paragraph (6) could give the mistaken impression that data records might have no legal effect in

      themselves. Another concern was that paragraph (6) did not make it clear whether the legal effects related

      to the creation or the communication of a data record. It was suggested that paragraph (6) should be

      deleted, or if retained, that it should be modified.

      153. After discussion, the Working Group requested the Secretariat to prepare a revised draft of article

      10, taking into account the various views and concerns that had been expressed.

    3. FUTURE WORK

154. The Working Group engaged in a preliminary exchange of views as to whether further legal issues

relevant to the increased use of EDI and related means of data communication should be drawn to the

attention of the Commission and considered for future work upon completion of the model statutory

provisions.

155. The view was expressed that the legal aspects of negotiability or transferability of rights in goods in a

computer-based environment were important issues to be considered in developing rules to facilitate the

growth of world trade through electronic commerce. It was stated that such rules should focus on the

following topics: the means to achieve legal recognition of agreements involving negotiability or

transferability; the need for default standards for allocation of risks among the parties; the need for

designated registries to maintain the integrity of the transfers. It was suggested that this project could focus

on the preparation of a functional equivalent to a negotiable bill of lading or that it might explore the

establishment of a new kind of document of title. Wide support was expressed in favour of that proposal.

156. Another view was expressed that it would be particularly appropriate to adopt a broader approach

to the issues of transferability, with a view to involving not only transfer of rights in goods but also transfer


of rights in securities such as stocks and shares. Some support was expressed in favour of that proposal.

It was stated that many of the legal issues arising in the area of transferability of rights would in all

likelihood be identical, irrespective of whether the rights transferred were in goods or in securities. It was

pointed out, however, that securities markets were highly regulated at the national level. Moreover, it was

stated that national systems for the exchange of dematerialized securities had been recently developed in

many countries, or were currently being developed. It was stated that, for those reasons, it might be

particularly difficult to achieve uniformity in that area.

157. The prevailing view was that it would be appropriate for the Commission to undertake the

preparation of uniform law on the issue of negotiability in a computer-based environment. It was generally A/CN.9/390

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felt that such uniform law should not be limited in scope to transfer of rights in goods and that certain issues

relevant to dematerialized securities might need to be taken into account. It was also felt that no attempt

should be made, at the current stage, to develop a uniform regime for the exchange of securities at an

international level. There was general agreement that the future project should give particular consideration

to the use of registries and to the possibility of performing such functions as registration and transfer of

rights at an international level.

158. After discussion, the Working Group adopted a recommendation to the Commission that it should

authorize the Working Group to undertake preliminary work on this project as soon as it had completed

the preparation of the model statutory provisions.

159. Another suggestion was that the Commission should consider the issue of liability of networks and,

more generally, the legal issues arising in the context of the relationships between EDI users and service

providers as possible work items. While some support was expressed in favour of the suggestion, it was

felt that it might be premature to engage in work on such a topic at this stage.

160. Yet another suggestion was that the Commission should engage in the preparation of a model

communication agreement for optional use between EDI users. It was recalled, however, that such

standard communication agreements were currently being prepared by other organizations, particularly the

European Communities and the Economic Commission for Europe. It was also recalled that the

Commission, at its twenty-sixth session, had reaffirmed its earlier decision to postpone its consideration of

the matter until the texts of model interchange agreements currently being prepared within those

organizations were available for review by the Commission.

161. The Working Group decided, subject to approval by the Commission, that its twenty-eighth session

would be held at Vienna, from 3 to 14 October 1994.

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1/ Official Records of the General Assembly, Forty-sixth Session, Supplement No. 17 (A/46/17),

paras. 314-317.

2/ Ibid., Forty-seventh Session, Supplement No. 17 (A/47/17), paras. 140-148.

3/ Ibid., Forty-eighth Session, Supplement No. 17 (A/48/17), paras. 265-267.

NOTES

 


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