Electronic Communications Convention

Canadian implementation

Some themes and questions

John D. Gregory

The Uniform Law Conference has asked for model legislation to implement the UNCITRAL Convention on the use of Electronic Communications in International Contracts (the E-Communications Convention, or the ECC). In order to prepare this legislation, one needs to answer a number of policy questions – and then some drafting questions.

This document aims to set out those questions and indicate what would be involved in answering them. As it evolves, it may propose answers as well. If you have thoughts on any of the questions or proposed answers, please feel free to send them to me at john.d.gregory [at] ontario (dot) ca . I am hoping to have a draft statute ready by the beginning of June 2010 for translation then presentation to the annual meeting of the Conference in late August. The sooner I have your comments, the more likely they are to influence the result.

My principal sources are listed at the end of this paper.

For ease of discussion I have numbered the main questions that occur to me. Feel free to raise other questions and to make comments that may apply to several questions at once.

  1. Should Canada accede to the Convention?

The main reason to accede to the Convention is to help build consistent rules around the world for using e-communications in international contracts. (Countries that signed the Convention while it was open for signature may ratify it; others may accede. The legal effect is the same.) For our internal purposes, we do not need the Convention's rules; our own laws allow for e-communications in negotiating, making and performing contracts. Likewise the laws of many of our major trading partners, notably the United States, Europe and Japan, accommodate e-communications, though not always on identical terms.

However, many countries do not specify that e-communications can be used with legal effect in their systems, and those that do so specify may do so in different language or use different concepts. It is not always possible in negotiating a contract to agree that Canadian law, or the law of a particular Canadian jurisdiction, will apply. It would therefore be an advantage to have an accepted international standard on the point.

It makes sense for countries that are already familiar with e-commerce laws, and especially those whose e-commerce laws are inspired by the UNCITRAL Model Law on Electronic Commerce, a fore-runner of the Convention, to become a party to the Convention. By doing so they declare to the international community that they consider the Convention's rules to be acceptable, based on their experience.

The Convention's rules apply to the medium for making international contracts. It is a separate question, discussed below, whether its rules should be adopted domestically at the same time. Someone who thinks that its rules are not ideal, or even undesirable, may wish to oppose their adoption at home. However, this view need not stand in the way of accession for international uses. As noted, there is no guarantee that the law applicable to an international contract will be our own domestic law, and the Convention may well be preferable either to uncertainty about the use of the electronic medium or to the application of even less desirable rules found in the domestic law of the other party.

Conclusion: For the purposes of the following discussion I will assume that it is desirable that Canada should accede to the Convention, at least for international contracts. Jurisdictions that disagree are not obliged to enact the Uniform Act to be developed from the current project. Article 18 of the Convention allows the Convention to be brought into force only in the jurisdictions that ask the federal government to be designated for that purpose.

  1. Application of the Convention: how is it triggered?

On its face, the Convention applies to communications about contracts when the parties are in different countries. What makes the Convention apply to those circumstances? The law applicable to those communications may be the Convention because it is the law of both parties' countries, or because it is the law of one of the parties' countries and that law applies by choice or operation of law; or because the rules of private international law may apply the law of another Contracting State to them.

Article 19(1) allows any Contracting States to declare that it will apply the Convention only when the states of both parties are Contracting States, or when the parties have agreed that the Convention will apply.

Article 3 allows parties to opt out of the Convention, so if they do not want it to apply, they can avoid it. Similar rules apply to the application of the Convention on the International Sale of Goods (CISG), and we have experienced no problems with its application in the twenty years or so that it has been in force in Canada.

Conclusion: My view is that Canada should not make a declaration under article 19(1). The general language of application is satisfactory, and leads to a broader application of the Convention.

  1. Application of the Convention: what other conventions?

The Convention applies to communications about international contracts subject to the general law of contracts of one of the parties' states. It also extends its rules to communications about international contracts governed by other conventions. Article 20 spells out six United Nations Convention that fall into that category: two to which Canada is a party – the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the CISG – and four to which it is not yet a party – conventions on limitations periods, the liability of operators of transport terminals, independent guarantees and stand-by letters of credit, and the assignment of receivables.

This does not amount to amending these conventions; amending them would be a cumbersome process. It merely says that the use of electronic communications in association with contracts that they govern will be understood as in the ECC. This is a very useful means of encouraging the legally effective use of e-communications. UNCITRAL believed that there was little if any risk in allowing for e-communications under these conventions, for a country that was prepared to accept the ECC itself.

The ECC goes further to apply similarly to international contracts governed by any other international convention to which a Contracting State to the ECC is now or later becomes a party. (Article 20(2)).

However, Contracting States are allowed to tailor this application with respect of other conventions by a series of opting out and opting in. Without getting into the mechanics here, the result is that Contracting States may have a general rule accepting the ECC's rules for other conventions except as specified, or a general rule rejecting the ECC's rules for other conventions except as specified. The 'other specifications' can exclude any of the six listed conventions as well as others not named. So a Contracting State may apply the ECC to whatever other conventions it chooses.

What should Canada do? Does somebody need to review the terms of every convention to which Canada is a party, to see if any rules applicable to international contracts that might be affected by the convention are consistent with those of the ECC? Or should we take a chance on acceding without declaring any exclusions? The ECC allows a Contracting State to make a declaration or a revised declaration at any time, so if we discover a problem in the future we can exempt contracts governed by the problematic convention at that time.

The Singapore consultation paper from 2009 concluded on this point that there was no reason to prevent the ECC from applying to all conventions to which Singapore was a party, for three reasons.

(a) The domestic e-commerce statutes already applied to contracts under those additional conventions, to the extent that the contracts were governed by Singapore law.

(b) Matters in which the use of electronic communications may be a cause for concern are excluded from the domestic law and can be excluded from the Convention through the use of article 19(2). See the discussion below.

(c) The extension of the ECC to other conventions has a narrow effect. It merely achieves functional equivalence for electronic communications in connection with the formation or performance of a contract to which the other conventions apply. It does not affect the substantive legal questions governed by those conventions.

Conclusion: Accede to the Convention without any declarations of exclusion or special inclusion under Article 20.

  1. Application of the Convention: international and domestic contracts?

UNCITRAL's mandate is international trade law, so the ECC is drafted to apply to international contracts. However, it is also drafted to work as a domestic law on contractual communications where the Contracting State has no existing law on that topic.

What should happen when, as in Canada, the Contracting State already has good law on that topic? Should we have a 'dual system', one law for communications about international contracts and one about communications for domestic contracts? Or should we bring our domestic law into conformity with the international rules so we can apply the same law to all?

It is important in this context to note that the ECC is almost the same as our domestic law, and in particular with the Uniform Electronic Commerce Act (UECA). This similarity arises from the common ancestry of the ECC and the UECA, namely the UN Model Law on Electronic Commerce of 1996. In addition, the ECC has added a couple of provisions inspired by domestic legislation that the UECA already has, so the ECC in this respect is 'catching up' to the UECA.

That said, some of the terminology of the ECC is a bit different from that in the UECA. Acceding to a convention means applying its terms as written; a Contracting State may not change them. If we object to any of the rules or wording of the ECC, then perhaps we should not try to implement them for our domestic law as well.

The main provision in the ECC that is not in our domestic law is that a proposal to conclude a contract not addressed to specific parties, including those that can be engaged by interactive communications, are not offers but invitations to receive offers – what the common law would call invitations to treat. This is probably our current law, but it is not codified. (The CISG has the same rule.) It is safe to conclude that this Convention rule would be acceptable in Canadian law.

Studies in Singapore, a unitary state, and Australia, a federal state, have recommended that domestic law be amended to conform with the ECC, in order to avoid a dual legal regime. In Australia, that would mean amending legislation in all states and the Capital Territory. (Both the Singaporean and Australian e-commerce statutes vary more from the ECC than does the UECA, because they were enacted a bit earlier, and the ECC adopted a couple of provisions that the United States and Canada added to the Model Law.)

The Drafting Committee of the American Uniform Law Commission has recommended, on the other hand, that the ECC be implemented to apply only to international contracts. The concern about proceeding the other way was the risk of non-uniform state implementing laws, and amendment of state laws at different times, leading to a patchwork that could be very confusing for foreign parties trying to understand the law applicable to a contract to be negotiated. The Executive Committee of the ULC has on the other hand prefers to proceed by a federal implementing statute that would be pre-empted by the appropriate uniform state law. In doing this, it would be necessary to ensure that the broad party autonomy of the Convention was not reduced by the limits on party autonomy in the current version of the Uniform Electronic Transactions Act.

The Canadian situation can be summarized in this way:

In favour of having a single law (i.e. amending the domestic law to conform with the ECC)

In favour of having a dual regime (i.e. the ECC for international contracts and the UECA for domestic)

There may be a third option: revise the UECA to make it more consistent with the Convention, but insert an “international application” part that would accommodate those few differences where we want to maintain our domestic rules as they are.

Conclusion: What do you think?

  1. Attach the Convention or rewrite the UECA?

The Uniform Law Conference commonly prepares statutes to implement conventions with a short active part, saying 'the Convention is in force in the enacting jurisdiction' and giving local meaning to terms in the convention, like naming the appropriate courts, then annexing the convention to the Act.

If the answer to Question 4 is to restrict the ECC to international contracts, then that is probably the best process: it is quick and easy to understand and it ensures that the language of Canadian law is exactly that of the Convention – which, as noted earlier, no Contracting State has the right to change.

If the answer to Question 4 is to apply the ECC's rules to domestic law as well, then it is probably preferable to rewrite the domestic law statute, i.e. the UECA, to conform with the Convention. The UECA covers a number of topics not in the ECC and the integration of the ECC may need more direction than a simple annex could achieve. Experts in Australia and Singapore have recommended doing that in those countries. (The only issue becomes the exclusions, and they can be harmonized through article 19. See more detailed discussion of Canadian exceptions below.)

Conclusion: Depends on answer to Question 4.

  1. Application of the Convention: exclusions and permissions

A. Harmonizing exclusions from the Convention and from domestic law

The ECC excludes from its scope consumer contracts (contracts for personal, family or household purposes), transactions “on a regulated exchange” (essentially sophisticated financial transactions among institutions that already have their legal rights in electronic communications spelled out satisfactorily among themselves), and bills of exchange, promissory notes, and other transferable documents of title.

The UECA excludes a somewhat different, though overlapping, group of documents or transactions: documents of title, wills and trusts created by wills, most transfers of land, and powers of attorney respecting individuals. A few provincial implementing statutes have slightly different exclusions.

Through the use of article 19(2) of the Convention, we can exclude from its application any of our domestic exceptions, either because we think the exceptions are right in principle for international as well as for domestic transactions, or just to keep the domestic and international laws consistent. Singapore's consultation paper on the ECC recommends the use of article 19 for this purpose.

Note that wills, trusts created by wills, and powers of attorney are not contracts so would not be covered by the Convention, without need for an express exclusion. Thus the UECA's exclusions are pretty accurately covered by the ECC's exclusions. Probably we would want to use article 19(2) to exclude transactions in land that require registration to be effective against third parties, the formula in the UECA.

The question remains what to do domestically with the Convention's exclusions of the financial transaction group. If the UECA and its implementing statutes are to be amended to accommodate the Convention, probably their exemption clauses can be rewritten to exclude only the international aspects of those transactions – if any of such transactions rely on the UECA statutes for the domestic validity of their electronic communications in any event. (Singapore will probably amend its statute to apply this exclusion to domestic and international applications.)

Some provisions of the UECA apply differently – with more restrictions – to electronic communications to which “government” is a party. The Convention applies to contracts without regard to the “civil or commercial character of the parties”, which suggests that it does not allow a distinction based on whether a party is a government entity. It may be that the special governmental rules in the UECA can be revisited, more than a decade after its adoption. Governments may be more comfortable with the general rules than they were in 1999. Otherwise some adaptation to international transactions will be needed, or an exception stated under article 19(2).

The Convention does not say expressly that each territorial unit (in our case province or territory) that comes into the Convention by a declaration of Canada under article 18 can make its own declarations under article 19. However, there is a precedent for such a jurisdiction-specific declaration. When the CISG was extended to British Columbia by declaration, Canada declared that the provision on applicable law would operate differently in BC than elsewhere, in a manner contemplated by the CISG. In other words, the declaration of extension to BC also made for BC one of the other declarations under that Convention. There is no reason to believe that the ECC works any differently. (BC later removed its additional declaration and the CISG now works the same way across Canada.)

Thus a province that wants to maintain its own exclusion list for international contracts can do so. Whether that is a good idea is a different question. Each province or territory with non-uniform exclusions will have to consider this question. Of course if the decision is made to implement the Convention only for international contracts, the decision may be easier. We may not wish to export our domestic exclusions to international contracts.

B. Harmonizing permissions in domestic law and the Convention

It may be harder to decide what to do when our domestic law is more open to e-communications than the Convention. There are several examples:

(The Australian Information Industry Association wondered how one would apply a test depending on the sender's control of the system, when the sender may be using 'software as a service' or cloud computing, and not technically ever have control of the system it uses – since it is by definition someone else's system. One suspects that systems subject to 'control' would be read to include systems that are obliged by contract to follow the sender's instructions.)

Is a Contracting State allowed to permit the use of e-communications more broadly in international contracts than the Convention requires? The parties to such contracts can expand on the Convention, though not so as to undermine protections for integrity of the communications (so parties could not validate e-signatures that did not meet the tests of article 9 of the Convention, though the Convention takes such agreements into consideration in applying its tests.) See paragraphs 14, 85, 86 and 137 of UNCITRAL's Explanatory Notes on the Convention.

It is arguable that parties to international contracts would want to rely on the limits to the Convention, and not just to its permissions, so finding themselves subject to e-signatures that do not meet the Convention's standards, or finding their contracts voidable for unilateral error more broadly than the Convention requires, may be unwelcome to them.

Would such parties be surprised to find international consumer contracts covered by the Convention's rules, or should we treat the ECC's exclusion of consumers only as a limit inherent in UNCITRAL's mandate, not affecting the desirability of the rules on the international level? It is likely that Canadian law implementing the Convention must disclaim any application of the Convention itself to consumer communications. If the general Canadian law (provincial or territorial law) on electronic communications applies to those communications, then the parties will be able to rely on that law – and the consumer protection measures that are also part of the applicable law.

Probably implementing legislation would have to either make domestic law conform to the Convention or distinguish between domestic and international contracts for these few purposes. The examples of differences are so few that this prospect should probably not influence the decision on Question 4 above (whether to harmonize domestic and international law or to have two parallel regimes).

However, it is not relevant to this discussion that the UECA applies to more uses of electronic communications than just to contracts. So long as Canadian law reflects the Convention with respect to contracts, nothing in the Convention requires that Canadian law should not apply to non-contractual communications, domestic or international.

Conclusion: Tailor the application of the UECA to international communications to be harmonized with the ECC. Such tailoring will be minor and raise no substantive policy questions.

But: Is it right to conclude that the UECA may apply to communications about international consumer contracts, to the extent that domestic law applies to those communications anyway? Or would that violate our obligations under the Convention, once we accede to it? Must we expressly exclude any notion that we purport to apply the Convention to such communications? Generally speaking, if we choose the first option under Question 4, we are not going to be applying the Convention expressly to international contracts, we are just going to tailor how the UECA applies to them.

  1. Compatibility with existing Canadian law

The Uniform Law Conference commissioned two papers on the compatibility of the Convention with Canadian law, one from Professor Deturbide of Dalhousie on the common law provinces and territories, and one from Professor Gautrais of Montreal on the law of Quebec.

Professor Deturbide found that the Convention was very compatible with the law of the common law jurisdictions. He recommended small amendments in order to harmonize the law for domestic and international transactions, but said that “the benefits gained from a uniform international scheme outweigh concerns over perfect harmonization with domestic legislation.” (para 60) He found that “no particular provision in the legislation of provincial or territorial common law jurisdictions has been identified that is contrary to the tenets of the Convention or would impede its implementation. Consequently, no amendment would have to be made to such legislation.” (para 64)

Professor Gautrais found that the law of Quebec on the use of electronic communications, mainly found in the Act to establish a legal framework for information technology and in the Civil Code of Quebec as recently amended, was also largely compatible with the Convention. Differences in terminology or perspective did not concern him. Both bodies of law rested on the principles of technology neutrality and the determination of functional equivalents to the rules that traditionally required paper media for legal effect.

However, Professor Gautrais did find one major difference, one that he concluded was fatal to the adoption of the Convention in Quebec. That was in the treatment of writing requirements. Article 9 of the Convention says that an electronic communication satisfied a legal requirement that information be in writing, “if the information contained therein is accessible so as to be usable for subsequent reference.”

The Quebec rule is found in the Legal Framework statute, section 5, which says that “where the law requires the use of a document, the requirement may be met by a technology-based document whose integrity is ensured.” Professor Gautrais refers to in the evidence part of the Civil Code of Quebec, which says that the integrity of various kinds of document must be assured for it to be used to adduce proof in the same way as a paper-based document of the same kinds (article 2838).

Professor Gautrais sets out (paras 56 – 62) several criticisms of the “subsequent reference” test and several advantages of the “integrity” test, find them incompatible and prefers the latter, both in principle and as better fitted in the context of Quebec law.

It is beyond the scope of this note to analyze that discussion in detail. However, I submit that the difference is much less than it is said to be. The Convention's test requires that “the information” be usable for subsequent reference. That does not mean part of the information, or amended information. It means the information that the law requires to be in writing. If what is usable for subsequent reference is something different, then it does not meet the Convention's test. As Professor Gautrais said about elements of article 14 of the Convention (para 51), “I am not certain they are lacking [in Quebec law], in that they are self-evident.” Likewise the integrity requirement in the Convention is self-evident. It goes without saying, or should be able to do so.

Professor Gautrais (paras 27 and 59) says that the subsequent reference test for an electronic equivalent of writing serves only to fulfill the evidence function but not the “formality ad validitatem”, making the party aware of the nature of the transaction with which the information is associated. While this may be true, the “integrity” test is no better for this purpose so does not provide a ground for preferring the Quebec formulation to the Convention's.

Finally, Professor Gautrais says (para 60) that the “subsequent reference” test was new at the time of the Model Law, and thus is not sufficiently tested. While that test was new, it was influenced by the American uniform formulation found in all revisions to the Uniform Commercial Code, and other uniform statutes, since the early 1990s. Those statutes define “record” as “information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.” These statutes have been in force in many states for several years and that definition has not caused difficulties.

The Convention provides in article 18 an option by which Canada could accede to the Convention and bring it into force in the provinces and territories that implement it. If Quebec chooses not to implement it, in order to protect its concepts or principled framework, it is free to do so, without preventing the common law jurisdictions from benefiting from the Convention if they agree with Professor Deturbide that it will be a benefit.

  1. Conclusion

Canada appears to be able to benefit from more certainty in the use of electronic communications in its international trade by acceding to the Electronic Communications Convention. The Convention is very largely compatible with existing Canadian law. However, existing Canadian law does not support the Convention without some amendments. Choosing the approach to take to those amendments raises several questions discussed in this paper.

Likewise, the Convention itself provides options for some matters of application, and a country that accedes to it must choose among them. The basic choices have been set out here, with recommendations.

Your views on these questions and these recommendations would be very helpful to the Uniform Law Conference in adopting a uniform statute by which Canadian jurisdictions may implement the Convention.



UNCITRAL E-Communications Convention and Commentary, 2005: http://www.uncitral.org/pdf/english/texts/electcom/06-57452_Ebook.pdf

Michael Deturbide, “Pre-Implementation Report on the Convention on the Use of Electronic Communications in International Contracts”, Uniform Law Conference, 2008: http://www.ulcc.ca/en/poam2/FINAL%20deturbide%20ELECTRONIC%20COMMERCE%20en%20(3).pdf OR http://bit.ly/cAXShM.

Vincent Gautrais, “Comparative Analysis of the United Nations Convention on the Use of Electronic Communications in International Contracts and the Civil Law of Quebec”, Uniform Law Conference, 2008: http://www.ulcc.ca/en/poam2/FINAL%20gautrais%20ELECTRONIC%20COMMERCE%20en%20(2).pdf OR http://bit.ly/detkso.

Australian Attorney General's Department, “Australia's Accession to the UN Convention on the Use of Electronic Communications in International Contracts 2005: Proposed amendments to Australia's electronic transactions laws, 2008: URL

http://www.ag.gov.au/www/agd/rwpattach.nsf/VAP/(CFD7369FCAE9B8F32F341DBE097801FF)~l_UN+Convention+on+e-commerce.pdf/$file/l_UN+Convention+on+e-commerce.pdf OR


Chong Kah Wei and Joyce Chao Suling, “United Nations Convention on the Use of Electronic Communications in International Contracts – A New Global Standard”, [2006] 18 Singapore Academy of Law Journal 116: http://www.sal.org.sg/digitallibrary/Lists/SAL%20Journal/Attachments/390/2006-18-SAcLJ-116-Chong.pdf OR http://bit.ly/aXimkm

Singapore (Info-communications Development Authority and Attorney General’s Chambers), Joint IDA-AGC Review of Electronic Transactions Act Proposed Amendments 2009, http://www.agc.gov.sg/publications/docs/ETAReport_LRRD1of2009.pdf (notably chapter 2. This document is over 120 pages long, but the discussion relevant to the Convention takes only about 30 pages. Then there is a model amended statute, draft certification authority regulations and a compliance audit guide.)

Uniform Law Commission, Committee to implement the UN E-Commerce Convention, recommendations, 2009: http://www.law.upenn.edu/bll/archives/ulc/ecom/2009oct23_report.pdf

A. Boss and W. Kilian, The UN Convention on the Use of Electronic Communications in International Contracts (Kluwer, 2008).


Last updated March 14, 2010 11