Electronic Transactions Act (ETA) | Legal Requirements of ETA

Electronic Transactions Act (ETA), 2006 | Legal Requirements of ETA

Electronic Transactions Act (ETA), 2006

The Electronic Transactions Act (ETA), 2006 was first enacted in July 1998 to provide a legal foundation for electronic signatures, and to give predictability and certainty to contracts formed electronically. The ETA attempts to provide security and use of electronic transactions.

In this Act:

Electronic means created, recorded, transmitted or stored in digital or other intangible forms by electronic, magnetic or optical means or by any other similar means;

Electronic agent means a computer program, or other electronic means, used to initiate an activity or to respond to electronic information, records, or activities in whole or in part without review by an individual at the time of the response or activity;
Electronic signature means information in electronic form that a person has created or adopted in order to sign a record and that is in, attached to, or associated with the record.

The UN Convention sets a new global standard for national electronic commerce legislation.

The ETA addresses the following issues:

1. Commercial code for e-commerce transactions:  

The ETA was enacted to create a predictable legal environment for e-commerce. It clearly defines the rights and obligations of the transacting parties. It also addresses the legal aspects of electronic contracts, the use of specified security procedures (including digital signatures), and concerns for authentication and nonrepudiation.

2. Use of electronic applications for the public sector: 
In order to facilitate the use of electronic transactions in the public sector, the ETA contains an omnibus provision through which government departments and statutory boards can accept electronic filings and electronic versions of documents without having to amend their respective Acts. It also allows public bodies to issue permits and licenses electronically.

3. Liability of network service providers: 
The government realizes that it is impractical for network service providers to check all the content for which they merely provide access. To create a transparent legal environment conducive to the growth of network service providers, the ETA specifies that network service providers will not be subject to criminal or civil liability for such third-party material, in relation to which they are merely the host. The clause, however, will not affect the obligations of a network service provider under any licensing or other regulatory regime established under the law.

4. Provision for the development of security procedures such as Public Key Infrastructure (PKI) and biometrics: 

the ETA provides for the appointment of a Controller to enable regulations to be made for the licensing and accreditation of specified security procedure providers, such as certification authorities (CAs), and including recognition of foreign CAs.

Legal Requirements of ETA

1. Legal requirement that information be in writing. A legal requirement that information be in writing is met by information that is in electronic form if the information -is readily accessible so as to be usable for subsequent reference.

2. Legal requirement to record information in writing. A legal requirement that information be recorded in writing is met by recording the information in electronic form if the information is readily accessible so as to be usable for subsequent reference.

3. Legal requirement to give information in writing. A legal requirement to give information in writing is met by giving the information in electronic form, whether by means of electronic communication or otherwise, if—

  • The information is readily accessible so as to be usable for subsequent reference; and
  • The person to whom the information is required to be given consents to the information being given in an electronic form and by means of electronic communication, if applicable.

A legal requirement to give information includes,

a. making an application,
b. making or lodging a claim,
c. giving, sending, or serving a notification,
d. lodging a return,
e. making a request, etc.

4. Legal requirements relating to the layout and format of certain information and writing materials. In this section paper-based format requirement means a legal requirement of the following kind that applies to information in paper or other non-electronic forms:

a. A legal requirement relating to the format or layout of information:
b. A legal requirement relating to the materials to be used for  
writing information:
c. Any similar legal requirement.

This Act does not apply to

a. wills,
b. trusts created by wills,
c. powers of attorney, to the extent that they concern the financial affairs or personal care of an individual,
d. documents that create or transfer interests in land and that require registration to be effective against third parties, or
e. other provisions, requirements, information or records prescribed in the regulations.


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