ELECTRONIC CONTRACTING PART 5:
ELECTRONIC CONTRACTS AND EVIDENCE

by Rob Horne LLB LLM MCIArb FSALS

A Solicitor with the City law firm Addleshaw Goddard, Rob specialises in resolving disputes on construction projects and frequently conducts adjudications, mediations, arbitrations, court actions and other processes. In addition, Rob is also involved in the E-Commerce group at the firm and has advised and lectured upon E-Commerce issues relating to construction projects. He is the current editor of the disputes and dispute resolution section of Law for Construction Professionals and can be contacted on robert.horneataddleshawgoddard.com

Introduction

If you have been following this series of articles, you may be forgiven for thinking that while very interesting it does not really have much practical application. This article will concentrate on the implications of electronic contracting and the use of electronic documents generally.

Using electronic contracts

In English law there is a clear distinction between an agreement and a contract. The distinction is based on the fact that a contract can be enforced by way of litigation or arbitration whereas a bare agreement cannot. A bare agreement is often referred to as being binding in honour only. Therefore, in this series of articles I have concentrated on demonstrating how an electronic contract does in fact meet all the requirements for being legally enforceable.

Now, imagine you have such a contract and some issue or dispute arises out of it. Perhaps you have ordered some goods at a certain price, in good faith, and the seller refuses to deliver despite having accepted your order. What is the first thing you need to do? Check the contract. How do you do that? Where is the contract you entered into? What does it actually consist of and how can you review it? All of these questions are relatively straightforward. With a traditional contract there will be a pile of paper, some of which contains the contract and some of which does not. When dealing with electronic contracts, one does not start with a pile of paper; indeed there is no paper at all. So where do you start?

Perhaps rather obviously you need to start in front of the computer. Rather than a pile of paper you will have a number of electronic files. However, in essence the procedure is the same; some files will be relevant, others will not. Therefore the process of ascertaining and reviewing the contract remains the same, even if the medium being used is different. The next stage is of course proving the content of the electronic contract.

Electronic documents as evidence

There is no longer a strict "best evidence" rule in English law. This means that, where it is impractical or otherwise not proportionate, to produce an original document for the purpose of proving its content, a copy will be sufficient. The question when looking at electronic contracts and electronic documents generally is "what and where is the original?".

An electronic contract or document is the "original" only in the form in which it was created. A print-out will not be an original but a copy. The original is the electronic version. Therefore, if the original is needed, the electronic version must be considered.

Although there is no strict "best evidence" rule which requires the production of the original, in the context of electronic contracts and documents the original will often be needed. It is easy to edit or otherwise amend an electronic contract or document such that, once printed out, the amendment is impossible to detect except by reference to the original. In addition, the referencing and dating of the electronic original may itself become important evidence. The availability of this type of evidence is a significant development when one considers typical contractual disputes which almost inevitably have timing at their centre.

Knowing that the electronic document may be useful and actually seeing it are of course two different things. Under the Civil Procedure Rules an electronic document is subject to disclosure and inspection in the same way as any other document. Therefore, where such an electronic document is held on a hard disk, the other party will be entitled to access that hard disk to inspect the original document.

Once you have seen the document you still need to present it to the court or arbitrator. How do you do that? The difficulties associated with bringing such evidence before a court or arbitrator are entirely practical. The court or arbitrator will need to have suitable equipment to physically view the data. Additionally, expert evidence maybe required to demonstrate exactly what the court is being shown.

Summary of electronic contracts

Over the course of these five articles I have shown the problems and benefits associated with electronic offers and electronic acceptance. I have described how the postal rule might apply. I have considered in detail the consequences of electronic signatures and the additional legislative rules governing electronic contracts. Finally, I have briefly looked at how electronic contracts can be used to enforce the contractual rights contained in them.

This area of law is developing rapidly. The resolution of disputes arising out of electronic contracts is unfortunately not developing as quickly. The technology is in place, but are you in a position to understand it and use it? I hope that in reading these articles you are at least more aware of the issues which might arise.

Robert Horne