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Nations conference was first enacted in 1999 and has ratified, in various versions, by all fifty US States, define, Does E-mail Have the Same
“that a record or signature may not be denied legal effect Evidentiary Foundation as
or enforceability solely because it is in electronic form.” Paper-and-Post Mail?
UETA goes further, affirmatively stating that “if a law requires a record to be in writing, an electronic record RPost was invited to speak to the Computer Law Committee
satisfies the law,” and both statutes make reference that of the IP Section of the California State Bar and
“if a law requires a signature, an electronic signature satisfies the law.” Therefore, the ESIGN and UETA Southwestern University School of Law on August 8. The
guarantee e-mail messages the same legal weight and topic was about e-mail having the same evidentiary foundation value, in a court of law, as paper records. as paper-and-post mail, some of the legal risks of standard e-mail, misconceptions of various e-mail security solutions in the Further, the courts have recently ruled that proposals market, and the evidentiary value of RPost Registered tendered by e-mail can have the same force as written Receipt™ e-mail. A copy of the presentation made by Zafar contracts [Plymouth Superior Court, Shattuck v. Khan, CEO of RPost, is available at www.rpost.com/ipsection
Klotzbach]; and that documents can be legally served by e-mail [9th Circuit court of Appeals, Rio Properties Inc. v. This report on that session, prepared by Thomas Palamides,
Canadian Consulate General, Los Angeles, was released to
business and government executives on August 10, 2005.

Consistent with ESIGN and UETA, one should be aware of the fact that both provide that a contract, or a signature Thomas Palamides, Trade Commissioner, Canadian Consulate relating to a commercial transaction, may not be General, 550 S. Hope Street, 9th Floor, Los Angeles, CA 90071 invalidated solely because it is in electronic form. (Thomas.Palamides@international.gc.ca) THE FALSEHOODS OF STANDARD E-MAIL
INTRODUCTION
Because of the ease with which a text message can be It was supposedly an open-and-shut case. The plaintiff modified (i.e. often with only two clicks of the mouse), a presented six printed e-mail messages that were sent to standard e-mail that is sent or received, archived the defendant over the course of several weeks. The e- electronically, or stored in printed form, has limited mails detailed fully a story of breach of contract. The “evidentiary value” in a court of law. The usefulness of defendant affirmed receipt of e-mail message numbers such documenting is very misleading. With e-mail, the one, two and six, but not the others. The judge ruled that burden of proof is currently on the sender. It has to be all the e-mails were inadmissible. What went wrong? proven that it was sent. Moreover, it has to be proven that it was received. There is a misconception by the A monumental shift has begun within our transactional- public that if one looks in the “Sent Folder” that the e-mail focused contract-based electronic society. E-mail was actually delivered to the recipient. correspondence on the Internet is very complex due to the wide variety of computer servers and systems. There is also a “Time Stamp” that appears on a standard Therefore, it is NOT safe to assume that a recipient e-mail in the receiver’s message window. The accuracy receives an e-mail when a sender sends a standard text of this time, however, depends on the user’s computer message. Intranet e-mail, however, occurs within a time setting, and has little “evidentiary value” in a court of controlled environment, so the issues of who sent what, law. Discussed later in this report is the fact that the and when, are less scrutinized. Should an e-mail recipient’s authorized mail server does provide a level of communication end up in court, for any reason, its time accuracy, which provides an increased level of “evidentiary value” may be questioned unless precautions So what do the courts deem “delivered” in reference to e- Learn why agencies such as the US Congress’ mail? Government Accountability Office, Attorneys and Law While the US Postal Service deems First Class mail firms nationwide, AT&T, Sprint, Qwest have taken steps delivered if sent, this is not true of electronic mail. UETA to ensure validity of Internet e-mail correspondence. stipulates that electronic messages can be judged “delivered” only if they can be shown to have arrived at the recipient’s mail system. There are four e-mail confirmations messages, which mirror First Class postal The Electronic Signatures in Global and National delivery. They are: Opened (Recipient signed); Mailbox Commerce Act (ESIGN), a Federal Law enacted by the (assistant or colleague signed and put it on your desk); US Congress in 2000, and the Uniform Electronic Mail Server (mail room acknowledged delivery by signing) Transaction Act (UETA) which stems from a United and Failure (no one signed for it). The four REGISTERED E-MAIL (RPOST):
aforementioned analogous levels of delivery have been confirmed by case law under the UETA. Software developed by RPost brings a new level of understanding to the issue. The sophisticated software provides legally valid proof of time and content sent and GRAY AREAS OF E-MAIL “DELIVERY”
received, for any Internet address, without storing Estimates of two-percent of Internet e-mails never reach information or requiring compliant action by the receiver, their intended destination. This may be due to reasons and able to reconstruct the original e-mail. An e-mail such as lost data packets, a mistyped e-mail address, or message is generated and returned to the sender that an aggressive use of Spam filters on a recipient’s system. provides evidence of the entire e-mail transaction, which Just because a sender does not receive a “bounce” reply is admissible in court. The RPost software actually notice, does NOT mean that the e-mail was delivered. aggregates the transmission information from the The reason for this is that many e-mail services are set sender’s and receiver’s mail servers, interprets it, and such that a no “delivery status notifications” or “bounce” produces an easy to read report. The information that is notice occurs so as limit an e-mail spammers’ ability to provided is returned to the sender within one business day and contains: proof of sending and receipt; proof of official time sent and received; proof of content (including attachments; re-constructs original content, delivery, and TRACKING SYSTEMS
There are today certain services that provide a notice of
“opening” of an e-mail message some of the time. WHAT’S IT MEAN TO CANADA?
Simple Web-tracking (i.e. Web bugs) provide a low level of confirmation, but are limited. Typical software provides The Ontario Provincial government is currently evaluating a text, or HTML, web receipt that cannot be easily RPost to validate e-mail communications. Expect other authenticated. It also does not list the contents Canadian government agencies to evaluate the associated with the e-mail. Therefore, the challenge becomes to capture the dialog from the sender, associate it with the precise content and times of transmission, and CONCLUSION
interpret the server dialog so as to present a timely and easy-to-understand text for the sender. More than twenty years ago Andrew S. Grove, Former Chairman of Intel Corporation, and one of the business Even though it is very difficult to intercept standard e-mail world’s best visionary from the later part of the last in transit, some look at using encrypted e-mail for century, wrote a slim book on the revolutionary change additional privacy. However, encrypted e-mail is which e-mail brought to corporate America. E-mail generally cumbersome and requires passing passwords improved delivery of information within an organization, or keys back and forth, which could also be intercepted if and provided a means by which external communication such is the concern. Further, with encrypted line could be carried out effectively throughout the value connections, the e-mail is in plain text inside the sender supply chain. This was a major process shift in or recipient’s organization leaving it vulnerable to productivity. With “evidentiary value” being added to e- mail, one may expect to see yet another step in the Standard digital signatures require the purchase, evolutionary process of productive business. Practicable installation, and management of a digital code (certificate) goals are more rapid deal closure, sign-offs as required that is associated with a password, system, or smartcard. by by-laws, contracts, statues, assurances, business To be enforceable under US law, however, an electronic signature must possess THREE elements: A sound, REFERENCES TO E-TRANSACTION LAWS
symbol or process; attached to or logically associated with an electronic record, and; made with the intent to The Uniform Electronic Transaction Act (“UETA”) and the sign the electronic record. Hence, an electronic signature Electronic Signatures in Global and National Commerce can be simple – a typed name, properly associated with Act (“ESIGN”) define, in similar language, “that a record
an e-mail and with explicit intent is the simplest form of or signature may not be denied legal effect or
electronic signature. The challenge then is to provide this enforceability solely because it is in electronic
method “evidentiary value” such that it would conform to form.”1 UETA goes further, affirmatively stating that “if a
law requires a record to be in writing, an electronic
record satisfies the law,”
and both statutes state that “if
1 UETA § 7(a).
a law requires a signature, an electronic signature
that recognizes the existence of a contract.7 There are satisfies the law.”2 These statutes guarantee e-mail
fundamental provisions in E-SIGN, UETA, and the United messages the same legal weight and value as paper Nations Commission on International Trade Law records. Indeed, courts have recently ruled that proposals (UNCITRAL) Model Law on Electronic Commerce that tendered by e-mail can have the same force as written support the validity of electronic contracts. contracts;3 and that documents can be legally served by
e-mail.4 To be enforceable under U.S. law, E-SIGN and
E-SIGN provides that “a contract relating to such UETA require that an electronic signature possess three
transaction may not be denied legal effect, validity, or elements:5 (1) A sound, symbol, or process, (2) attached enforceability solely because an electronic signature or to or logically associated with an electronic record, and electronic record was used in its formation.”8 Similarly, (3) made with the intent to sign the electronic record. UETA provides that “a contract may not be denied legal effect or enforceability solely because an electronic In the case of Shattuck v. Klotzbach,6 the Plymouth record was used in its formation.”9 Finally, the UNCITRAL Superior Court determined that using e-mail, the two
Model Law on Electronic Commerce goes a bit further by parties settled on the price of a house; as the e-mail
providing both that “an offer and the acceptance of an referred to the purchase and sale agreement that would offer may be expressed by means of data messages”, be prepared. All the e-mails exchanged by the two
and “where a data message is used in the formation of a parties ended with the ''typewritten'' names of the
contract, that contract shall not be denied validity or senders. The judge refused to dismiss the case because
enforceability on the sole ground that a data message he believed that the parties’ agreement to terms within an e-mail is in fact binding, even though there was no
physical signature. The Court stated the following: ''Even
An offer may be accepted “in any manner and by any though e-mail is in writing, most people still think of
medium reasonable in the circumstances.”11 Typical e-mail as an informal form of communicating. Now
offline acceptances include written and oral the Court is saying that it is a binding document.''
communications, as well as acceptance by conduct. Their online counterparts include acceptance by e-mail or other The relevance is that e-mail is binding without any special form of electronic message, by electronic agent, and by “digital signature” other than the author of the e-mail conduct such as clicking on a button or downloading typing his or her name logically associated with the Thus, if an offer is made by e-mail, one should be able to While this decision and the enactment of UETA and ESIGN are great news for those who wish to use electronic methods to conduct business, one must be UETA provides that an electronic record is considered able to prove delivery and authenticate the original received only when it enters a computer system “that the content of the e-mail and attachments (i.e. original terms recipient has designated or uses for the purpose of and conditions) in order to protect against a dispute over receiving electronic records of the type sent.”13 Thus, if the terms of a contract sent via e-mail. RPost the parties have regularly corresponded in the past by e-
Registered Receipt™ e-mails provide transaction mail, an e-mail acceptance sent to the offeror’s e-mail
parties with accountability, irrefutable proof of address will presumably be effective.
delivery and receipt, official time stamp and non-
UETA provides that the time at which an electronic record repudiation.
is considered to have been sent is the time that the Requirements for creation of electronic contracts are record “enters an information processing system outside based on the Uniform Electronic Transactions Act the control of the sender” (in the case where a message (UETA), the E-Sign Act, among others. is sent from one computer system to another), or “enters a region of the information processing system designated A contract may be made in any manner sufficient to show or used by the recipient which is under the control of the agreement, including offer and acceptance, or conduct UETA §§ 7(c) and 7(d). ESIGN §101(a)
Nikoletta Banushi, “Can E-Mail Seal A Sales Deal?” Boston Globe, 10 UNCITRAL Model Law on Electronic Commerce, Article 11(1). 4 American Bar Association website (March 29, 2002) 5 E-SIGN, 15 U.S.C. § 7006(5) and UETA § 2(8) (definitions of
12 It is well established that an acceptance may properly be sent by the same means as the offer, unless the offer says otherwise. See Restatement (Second) of Contracts § 65. Nikoletta Banushi, “Can E-Mail Seal A Sales Deal?” Boston Globe, recipient” (in the case where a message is sent from one Directive adopted in 2000. Internationally, model laws person to another on the same system, such as where governing the enforceability of electronic transactions both parties are on AOL). An electronic record will be have also been developed by the United Nations considered to have been sent as of that time, provided Commission on International Trade Law (“UNCITRAL”) that it is addressed properly to an information processing Working Group on Electronic Commerce, which system that the recipient has designated or uses for the completed work on its Model Law on Electronic purpose of receiving electronic records and from which Commerce in 1996, and finalized and approved its Model the recipient is able to retrieve the electronic record, and Law on Electronic Signatures in 2001. These model laws provided further that it is in a form capable of being have served as the basis for legislation enacted in Further, The U.S. National Archives and Records The term “electronic signature” means “an electronic Administration Modern Records Program16 has provided sound, symbol, or process, attached to or logically the following guidelines for electronic records: associated with a contract or other record and executed or adopted by a person with the intent to sign the For a record to remain reliable, authentic, with its integrity record.18 Under the European Union Electronic Signature maintained, and useable for as long as the record is Directive, “electronic signature” means “data in electronic needed, it is necessary to preserve its content, context, form which are attached to or logically associated with and sometimes its structure. A trustworthy record other electronic data and which serve as a method of preserves the actual content of the record itself and information about the record that relates to the context in which it was created and used. Specific contextual The term “transaction” is defined in the E-SIGN Act as information will vary depending upon the business, legal, “an action or set of actions relating to the conduct of and regulatory requirements of the business activity (e.g., business, consumer, or commercial affairs between two issuing land use permits on Federal lands). It also may be or more persons, including any of the following types of necessary to preserve the structure or arrangement of its conduct: (A) the sale, lease, exchange, licensing, or other parts. Failure to preserve the structure of the record will disposition of (i) personal property, including goods and impair its structural integrity. That, in turn, may undermine intangibles, (ii) services, and (iii) any combination thereof; the record’s reliability and authenticity. and (B) the sale, lease, exchange, or other disposition of any interest in real property, or any combination Non-repudiation is one of the essential security services thereof.”20 UETA defines “transaction” as “an action or set in computing environments, being mainly applied in of actions occurring between two or more persons message handling systems and electronic commerce. relating to the conduct of business, commercial, or The non-repudiation services that are being used in e- commerce can also be used in ascertaining the reliability of electronically-signed records. Non-repudiation services provide irrefutable evidence that an action took place. The services protect one party to a transaction (e.g., Each of these legal definitions and statutes support
electronically signing a record) against the denial of the the RPost Registered E-mail® service’s basis of
other party that a particular event or action took place. enabling a legal electronic transaction. Each support
The services also provide safeguards that protect all the use of RPost® Registered E-mail® for electronic
parties from a false claim that a record was tampered signature, service, delivery, time, non-repudiation
and content authentication, for offers, counter-offers,
and acceptance of offers in transactions.

Similarly, the European Union Electronic Signature Directive requires member states to “ensure that an This report is not legal advice, but is an analysis of
electronic signature is not denied legal effectiveness the application of existing legal principles regarding
solely on the grounds that it is in electronic form.17 e-commerce to business communications. If you
have any questions as to how these principles apply

In the European Union, the enforceability of electronic to you or your transactions or business, you should
transactions is governed by the Electronic Signatures consult qualified legal advice.
Directive adopted in 1999, and the Electronic Commerce E-SIGN, 15 U.S.C. § 7006 (5); UETA § 2(8). Electronic Signatures Directive, 1999/93/EC (13 December 1999), The National Archives and Records Administration, Policy and Communications Staff, Office of Records Services, Modern Records Program, Washington, D.C. 17 Electronic Signature Directive, Article 5(2)

Source: http://rpost.ch/pdf/200508_ca_bar_report.pdf

Microsoft word - 05-16-08 4.internet.final.doc

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