Meta- Description UNCITRAL Model Law on E-Commerce was passed by the Commission in December 1996. It was a major breakthrough and initiative to provide a legal mechanism so as to govern the electronic transactions. The article would deal with the in and out of this model law and implications in domestic law. Key- Words Model Law, Electronic Commerce,… Read More »

Meta- Description UNCITRAL Model Law on E-Commerce was passed by the Commission in December 1996. It was a major breakthrough and initiative to provide a legal mechanism so as to govern the electronic transactions. The article would deal with the in and out of this model law and implications in domestic law. Key- Words Model Law, Electronic Commerce, Contract, United Nations. Introduction The increasing transactions over the internet have necessitated legislative vigil. The sole reason...

Meta- Description

UNCITRAL Model Law on E-Commerce was passed by the Commission in December 1996. It was a major breakthrough and initiative to provide a legal mechanism so as to govern the electronic transactions. The article would deal with the in and out of this model law and implications in domestic law.

Key- Words

Model Law, Electronic Commerce, Contract, United Nations.


The increasing transactions over the internet have necessitated legislative vigil. The sole reason being, the ever- encompassing nature of the electronic transactions. The click for the offer can take place in Argentina and the click for acceptance can take place in Mongolia. No limits and no bounds.

The need arises for a coherent and streamlined system for governing these transactions. The United Nations Commission on International Trade Law took the initiative in urging the countries to enact suitable legislation. It, accordingly enacted a Model Law for E-Commerce in 1996, as it did earlier for Arbitration.

In the coming article, the nuances of this Model law with judicial rulings would be examined. The Indian version would also be cooked into for a clearer understanding.


The development of electronic commerce in such a width is preceded with the military establishments. One is reminded of the arms race of the Cold War. Starting from the launch of Sputnik by the Soviet Union, US President Eisenhower established ARPA agency. The latter pursued the idea of a countrywide communications network. ARPANET became first such protocol in 1983.[1]

In the 1990s, NSFNET came and connected the Universities across North America. Similarly, the EU Net-connected the research facilities in Europe. Thus, the Internet became popular in these countries.[2] Today we have an explosion of web pages and spread of electronic commerce like a boom. Contractual issues arose with an alarming length and had no legal recourse to due to no statutory framework in countries.

But, making contracts were going to be the rule of the day in the coming twenty-first century. To move on with the pace of demanding times, countries had to push beyond the traditionalistic notions of contract and had to enact a new regime. The question arises as to who would take the lead for doing the same? The increasing globalization was erasing the national boundaries and creating transnational atmosphere.


United Nations, an international organization created in the aftermath of the Second World War works for cooperation among the countries. Thus, a separate wing in the form of United Nations Commission on International Trade Law [hereinafter “UNCITRAL”] was created in 1966.[3] The primary purpose was the promotion of international trade and the unification in the law governing the same.

Till 1984, UNCITRAL did not focus much on the legal validity of electronic commerce. The emphasis was much upon the Arbitration and Conciliation Rules, Legal Guides for Construction contracts etc. It also took the initiative in framing the model law on International Commercial Arbitration. It also took the lead in the drafting of international conventions like the ones on International Sale of Goods etc.[4]

In 1984, a report[5] was placed before the Commission by the then Secretary-General, on Legal Values on Computer Records. This report was taken over by the 17th session of the UNCITRAL. His report was the result of the Working group on Facilitation of International Trade Procedures. The pressing problem with regard to a lacuna in the international trade law to govern the issue of e-commerce was being highlighted.

In 1985, General Assembly[6] had already endorsed the recommendations made by UNCITRAL made in 1985. In brief, the recommendations were-

  • “To review the legal rules for computer records, whether the written requirement is essential for the validity of the legal document.
  • To review the requirements of a signature and the documents submitted to the government.
  • The international organizations were also recommended to come up with legal texts in line with the recommendations so given. Thus the Model Law was a step in that direction.”

In December 1996, the General Assembly of the United Nations approved the Model Law[7] on a report by UNCITRAL[8]. The long journey of 1984- 1996, saw a series of working group recommendations and study reports.[9] It was felt actually, that despite the recommendations of 1985, the pace of reform was very slow. After all, being the core legal body for the international trade law, it was the duty of UNCITRAL only to come out with such a framework.[10]

The object of the Model Law was clear. It was to remove the unnecessary obstacles in international trade caused by inadequacies and divergences in law affecting trade.[11] The Model Law was adopted as on 30th January 1997[12]. A recommendation was being made by the Assembly to –

“All (the) states (to) give favourable consideration to the UNCITRAL Model Law on Electronic Commerce when they enact or revise their laws, in view of the need for uniformity of the law applicable to alternatives to paper-based forms of communication and storage of information.”[13]

The Model Law

The Model law[14] is being divided into two parts. The first part relates to the General provisions related to E-commerce whereas the second part relates to the Specific provisions for e-commerce in certain areas.

The brief list of the Articles is appended herein below-

Part Chapter Article Contents
One I 1 Sphere of Application
2 Definitions
3 Interpretation
4 Variation by Agreement
II 5 Legal recognition of data messages
5 bis Incorporation by reference
6 Writing
7 Signature
8 Original
9 Admissibility and evidential weight of data messages
10 Retention of data messages
III 11 Formation and validity of contracts
12 Recognition by parties of data messages
13 Attribution of data messages
14 Acknowledgement of receipt
15 Time and place of dispatch and receipt of data messages
Two I 16 Actions related to contracts of carriage of goods
17 Transport documents

This gives a brief overview of the provisions and the proposed recommendations by UNCITRAL. These recommendations find space through the Model Law published along with its Guide. A Model Law doesn’t have a legislative weight as a convention does.[15]

It means that the states have the liberty to legislate their own domestic laws in pursuance of the Model Law. More than 132 states have until now adopted the Model Law[16]. On these lines, the Information Technology Act was being enacted in 2000, by India.

The very significance is gathered from the principles of non- discrimination, functional equivalence, technology neutrality and party autonomy.[17]

Key Provisions

  • General Provisions

The sphere of application is for the information in the form of data messages (Article 1). The context for the same are commercial activities. There are six definitions[18] provided in Article 2, out of which the most important one is that of the data message. The Model Law defines it as-

.. means information generated, sent, received or stored by electronic, optical or similar means including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy”

This provides a very expansive and progressive definition. The usage of the term “similar means” make the application of the law in tune with technological advancements which may happen in future. The striking importance for this definition is the requirement of offer and acceptance in contracts.

Since both of these requirements would be fulfilled by the way of the data message, it becomes extremely important to know what exactly a data message is. This wide definition would, therefore, include the notion of record and even revocation and amendment.

The interpretational tool calls for a standard of international origin and a need for uniformity in the application of general principles of law (Article 3). The communication of data messages can be varied through by the agreement of the parties also (Article 4).

Legal Requirements upon Data Messages

Data message, as defined above, cannot be denied legal validity and effect (Article 5). This general principle prohibits any sort of discrimination against such sort of information.

Even if the information is just referred to in that data message, it will not be denied the legal validity (Article 5 bis).[19] Thus, incorporation by reference would make the application of the law way wider. Especially, in the context of international communications, this has a lot of importance.

The Requirement of writing is successfully met by the accessibility of the data message (Article 6). This is a breakthrough since the national laws usually require documents to be in writing. The crucial aspect is the recognition of electronic signature since that marks an approval to the entire structure of the contract. The provision is vast enough to include a method used to identify that person and is termed relevant for all circumstances including a relevant agreement (Article 7)

The Indian Law on the other hand only recognizes the digital signatures[20]. This definition would be expansive to various kinds of procedures used to approve a person’s presence and approval. Here, develops the concept of functional equivalence (will be discussed later). The key aspect is to separate the notion of signature from the dependency upon the paper.

Even the notion of the original is being defined. With the assurance of the integrity of the information, the data message would suffice the requirement of originality. Also, if the information is to be presented, then the ability of the displaying of information would be enough. (Article 8) Data messages have been accorded the evidentiary value so as to be admitted in the court of law (Article 9).

Even the requirement of retention of the information is met by the retention of data messages. Provided that accessibility, accurate format and identity of the origin is not done away with (Article 10).

Communication of Data Messages

The flow of intention and formation of the contract is crucial to be deciphered from the communication of offer and acceptance. The same can be done through the means of data messages, which would not be denied legal validity (Article 11). When the parties recognize the data message, an example in the form of an acknowledgement is also granted legal validity (Article 12).

The data message is attributed to the Originator if sent by him or someone under his/ her authority (Article 13) Thus, the originator is bound by his/ her action of sending the message effectively. The receipt of the data messages can also be agreed upon by the parties and be acted upon (Article 14). Some believe that this requirement would lead to an endless loop. It is because, for each acknowledgement, there will be the corresponding acknowledgement by another party.[21]

As and when the information goes out of the control of the sender, then the transaction ensues. The time and place of dispatch are important to understand. The place is that of the place of business. The time is when the acceptance enters the computer system of the addressee (Article 15).

Usually, in the postal rule of communication, acceptance is concluded when the acceptance is posted.[22] The same rule is applicable when it comes to telegraphic communication.[23] But in the case of instantaneous communication,[24] like telex or telephone, the contract is complete when the contract is actually received.[25]

Specific Provisions

The carriage of goods can be transacted upon through data messages (Article 16). This is significant in light of the underlying intention to promote international trade. The requirement of paper is done away with and data messages are sufficient for carrying on the actions in the previous article (Article 17).

Judicial Interpretation

The entire aim of this Model Law was to put in place a harmonized system of law when it comes to electronic commerce. Different states enacted laws being influenced by this model law. Some of them are –

  1. Australia- 2011
  2. China- 2004
  3. India- 2000[26]
  4. Pakistan- 2002
  5. Qatar- 2010
  6. Singapore – 2010
  7. United Arab Emirates- 2006
  8. United States of America- 1999 (California)[27]

Thus, the courts have interpreted the provisions of their domestic laws based upon the Model Law. In the US, Khoury v. Tomlinson[28] is the landmark case decided by the Texas Court of Appeal. An investor and the President of the Company entered into an agreement over email for repayment of money. But, there was no signature of the latter on his mail, only his name in the From section.

The court referred to the Uniform Electronic Transactions Act (based upon the Model Law) and the principles of Article 7 of the Model Law. The evidence was found sufficient that the name in the From section establishes the identity of the sender, i.e., the President.

The Singapore High Court dealt with an interesting case of Chwee Kin Keong & Others[29], where wrong prices were being quoted for the product on the website of the seller. Also, when the buyers placed the order, the server of the seller automatically sent the confirmation mail.

The court found all the elements of a contract established but with a mistake. The court followed the Singapore Electronic Transactions Act based upon the Model Law. The rule of communication was applied flexibly so as to avoid injustice. The court recognized various forms of mistake that can vitiate the contract like-

  1. Human Errors
  2. Software Errors
  3. Transmission Problems in The Communication Systems

The Supreme Court of Justice of Columbia dealt with a family case[30] where the electronic message by a spouse was not considered relevant on the ground of evidential thresholds. The Court admitted the message relying upon Act No. 527 based upon the Model Law. The person concerned was summoned in to identify the document.


The changing times require comprehensive solutions. Taking the lead, the UNCITRAL addressed the lacuna in law by suggesting a model law to the countries. Many countries followed the trail by providing legal certainty to the regime of e-commerce.

India had not been far behind in enacting the piece of legislation. But there have been deviations like not having a technologically neutral approach as envisaged in the Model Law. The Act has provided a technology-specific stipulation”[31]Thus the legislature needs to rectify such loopholes so as to enrich the commercial prudence.

[1] Ryder Rodney D, Guide to Cyber Laws 13 (Wadhwa and Company Nagpur, 2nd Edn, 2005).

[2] Id.

[3] General Assembly Resolution 2205 (XXI), 17th December 1966.

[4] Dr Farooq Ahmad, Cyber Law in India (Law on the Internet) 26 (Pioneer Books).

[5] Report by Secretary-General on Legal issues related to Legal Value of Computer Records etc., A/CN9/ 254.

[6] Resolution 40/71, ¶ 5(b), 11th December 1985

[7] General Assembly Resolution 51/162, 16th December, 1996.

[8] Report of the Sixth Committee, (A/51/628).

[9] UNCITRAL Report, “Preliminary study of legal issues related to the formation of contracts by electronic means” (A/CN.9/333), 1990; UNCITRAL Report, “Electronic Data Interchange” (A/CN.9/350), 1991; Background Paper, “Possible issues to be included in the programme of future work on the legal aspects of EDI”, A/CN.9/WG.IV/WP.53, 1992.

[10] Krishna, Cyber- Laws- Intellectual Property and E-Commerce Security 286 (Dominant Publishers and Distributors, New Delhi 110002).

[11] Dr. Farooq Ahmad, Cyber Law in India (Law in Internet) 26 (Pioneer Books).

[12] General Assembly Resolution A/ RES/ 51/ 162, 30th January, 1997.

[13] Official Records of the General Assembly, Fifty-first Session, Supplement No. 17 (A/51/17), ¶ 209.

[14] UNICTRAL Model Law on Electronic Commerce with Guide to Enactment 1996 with additional article 5 bis as adopted in 1998, United Nations, New York, 1999,

[15] Bimal Patel et. al., International Contracts I: Jurisdictional Issues and Global Commercial and Investment Governance 87 [Chapter 8: Cross Border Transactions and Role of UNCITRAL: Electronic Commerce as an Emerging Trend].

[16] UNCITRAL Model Law on Electronic Commerce, (Last accessed on 12th Dec,2019,11:30 am),

[17] Luca Castellani, UNCITRAL Legislative Standards On Electronic Communications And Electronic Signatures: An Introduction

[18](a) “Data message” means information generated, sent, received or stored by electronic, optical or similar means including, but not

limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy;

(b) “Electronic data interchange (EDI)” means the electronic transfer from computer to computer of information using an agreed standard to structure the information;

(c) “Originator” of a data message means a person by whom, or on whose behalf, the data message purports to have been sent or generated prior to storage, if any, but it does not include a person acting as an intermediary with respect to that data message;

(d) “Addressee” of a data message means a person who is intended by the originator to receive the data message, but does not include a person acting as an intermediary with respect to that data message;

(e) “Intermediary”, with respect to a particular data message, means a person who, on behalf of another person, sends, receives or stores that data message or provides other services with respect to that data message;

(f) “Information system” means a system for generating, sending, receiving, storing or otherwise processing data messages.”

[19] Added by UNCITRAL at its thirty-first session, in June 1998.

[20] § 2(p), The Indian Information Technology Act, 2000

[21] Nishith Desai Associates, The Information Technology Act 20 (The Chamber of Income Tax Consultants, November 2001)

[22] Manilal v. Venkatachalapathy (1944) Mad.95; American Pipe Co. v. the State of U.P., AIR 1983 Cal. 186; Pratap Chandra v. Kali Charan, AIR 1952 Cal 32; Kamisetti Subbiah v. Katha Venkataswamy (1903) 27 Mad.

[23] Tinn v. Hoffman & Co., 29 L.T. 271, 274, 278; Cowan v. O’Connor, 20 Q.B.D 640 (Telegraph).

[24] Entores Ltd. v. Miles Far East Corporation, (1955) 2 QB 327.

[25] Bhagwandas v. Girdhari Lal & Co. (1966) 1 SCR 656.

[26] The Indian Information Technology Act, 2000.

[27] UNCITRAL Model Law on Electronic Commerce (1996) – Status, UNCITRAL,

[28] Khoury v. Tomlinson, 518 S.W.3d 568 (2017).

[29] Chwee Kin Keong & Others v. Pte Ltd., [2004] 2 SLR 594; [2004] SGHC 71.

[30] Martha Helena Pilonieta v. Gabriel Humberto Pulido Casas,


[31] Recommendations Made By Ascl To Government Of India For Amendments To The Information Technology Act, 2000, Asian School of Cyber Blogs, May 10, 2004,

Updated On 24 April 2020 11:59 PM GMT
Rishabh Aggarwal

Rishabh Aggarwal

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