A huge number of businesses use websites and e-mail for commercial purposes. Many firms are also moving towards electronic contracts and thinking about whether to use electronic signatures on them. So those involved in purchasing and supply need to consider the changes to English law that will result from two European Union directives being implemented this year - on electronic signatures and electronic commerce.

E-signatures

The Electronic Signatures Directive of 1999 is already partly in force. It led to the Electronic Communications Act (ECA) 2000, which recognises digital signatures as legally valid. This has already led to changes in the law and others are on their way. However, for those involved with purchasing and supply, the important practical question is whether a properly verified e-signature can be used in contractual documents.

Many of the contracts companies deal with do not need a signature to be valid. Most lawyers and companies e-mail draft contracts to each other freely, but for the bigger deals they print off the final version for signature. It is not that these documents must be signed to be legally valid, but if the other party denies agreeing the terms, a signature makes it easier to prove they did so. Now, an e-signature rather than one on paper could be used for these contracts if the parties so wish. It will be entirely voluntary.

The ECA only implemented part of the EU directive. A minor part remained, but has now been brought into force. The Electronic Signatures Regulations 2002 (SI 2002/318) relate to the supervision of certification service providers, their liability in certain circumstances, and data protection requirements concerning them. Now is a good time for businesses to consider areas where getting pieces of paper signed is a problem for contracts, and where an e-signature might improve matters.

E-commerce

The E-Commerce Directive, to be implemented later this year, sets out basic information that should appear on a company’s e-mails and website, whether goods and services are sold from the site or not. Many companies do not give this information and should now do so. It also includes provisions relevant to those who sell online to consumers, and deals with the liability of Internet service providers.

Article 5 requires companies to include the following information in any commercial e-mail they send: name; geographic address; details including e-mail address; trade register in which registered and number; supervisory authority, where relevant; for regulated professions, the regulator; VAT number, where relevant. In addition, where goods or services are being provided, companies must include a clear statement of the price and whether it includes tax and delivery costs.

Article 6 sets out further rules on commercial communications - they must be clearly identifiable as such - and about promotions and competition. Article 7 places a duty on sellers to check opt-out e-mail registers.

Article 10 concerns information for web orders. Before the order is concluded, the buyer should be given information on: technical steps to conclude the contract; whether the contract will be filed with the supplier and how it can be accessed; technical means for identifying and correcting input errors before the order is placed; and languages offered for conclusion of the contract. These measures are not required where the order is placed by e-mail rather than via a website. Article 11 requires receipts to be issued for orders placed via a website.

Readers from all companies with websites, and using e-mail for commercial purposes, should check now that they comply with the directive. Businesses that sell goods or services online to consumers will also need to amend their terms and conditions and procedures. And in the light of the new e-signatures regulations, businesses considering contractual arrangements that use e-signatures should proceed with their plans.

Susan Singleton is a solicitor at Singletons (www.singlelaw.com) and the author of E-commerce: A Practical Guide to the Law (Gower)

E-commerce and e-signatures

• The draft Electronic Commerce (EC Directive) Regulations 2002, and a draft partial regulatory impact assessment and an interim guide for business, are on the Department of Trade and Industry (DTI) website

• HM Treasury has consulted separately to the DTI on the directive’s implementation in the financial services sector. Its documents are available here

• The Electronic Signatures Regulations 2002 (SI 2002/318) can be found at www.hmso.gov.uk