Basic Cyber Legal Issues Structured by Sougaijam Bharatmani Singh LL.M, P.G.

Diploma in Cyber Laws, PGDBM The digitization of traditional activities of commerce buying & selling; print media marketing & advertising; auction & procurement process; banking & retailing; other services and many more activities that may be workably digitized for commercial purpose in a 24x7 virtual market place under a regulated legal frame work are referred to as electronic commerce. Popularly known as online shopping, this brand is understood mostly by urban population. The vice-versa differences between the two brands of commerce are - storage & maintenance of trade documents/records in a file or computer; presence & absence of physical or virtual market place; bordered & borderless trade activity; and presence and absence of opportunity of face to face bargaining. Electronic data interchange using secured connections to exchange commercial documents followed by electronic fund transfer using secured electronic payment gateway is the back bond of it. It may be a prototype business for under develop and developing countries. Who controls and owns the cyberspace and who does the regulation work have been a question of this-now-midway solved market. With the sudden development of the internet, e business has become an essential 24x7 viable alternative business procedure to many more existing traditional business activities. Key question at the time of nascent stage of e commerce was and still debating is, how domestic laws can apply to activities legal or illegal whatever it may be, carried on borderless internet. E Commerce, like any other business activity requires two or more parties at the time of transaction (principles of law contract). In it one party may also be bound by already drawn provisions of agreement set by the e-commerce doer or service provider. This is referred to as standard form contract. Compelling Legal issue Transacting business on the basis of physical records such as invoice, cash memo, receipt, chalan, counterfoil, memos, letter, agreement etc. is a century old tradition and its substitute has been a challenging task for the

government, judiciary and law makers. With the popularity of the internet and growth of the new brand e commerce environment, people across the globe have started shopping on the internet. But the basic question is, what constitutes legally admissible documents or records[1] in e commerce. A document is said to be contractual if it embodies the contract, ..., if the persons to whom it is delivered should that it is supposed to contain conditions. But where the paper is not supposed to express the conditions of the contract, it will be regarded as a mere voucher[2]. Again the basic question is, how a contract between parties without physical signature is admissible in court. By contract we mean an agreement reached between two or more parties after meeting their mines (consensus adi dum) on the terms of the agreements thereto, under the frame work of domestic laws sealing by signature of all parties. The general principles of the law of contract require manifestation of offer, acceptance, consideration, consensus adidum, performance of contract reciprocally from both parties, and remedy for breach of contract. Such very essential principles of contract are absent in electronic transaction and e-commerce as well. As for instance, when a person visits a site, he or she has no option except to accept or not to accept the service terms and conditions of the site. The provisions laid down in the service terms and conditions are readymade provisions of unilateral agreement drawn by the site owner. Once the visitor clicks I submit, I agree, I accept or Yes button, without reading and without intending to abide by the service terms and conditions, an electronic agreement is automatically formed[3]. Clicking the button generates the acceptance of the offer. This method of forming electronic contract, also known as click wrap method[4] or web wrap contract is a common method enjoying by web users and another is electronic mail method[5]. In traditional contract, this practice of concluding contract is known as standard form contact, contracts of adhesion, compulsory contracts, private legislation[6]. It is such-a-kind of imposing private legislation upon customers by exempting the company from all liability under the wrap contract. Because such contract provides only one communication channel with no option for the acceptor, that is to say - no room to discuss right away with the offeror (service provider or online shop keeper), except to accept the offer whether he likes the service terms and conditions or not. His only choice is either to click, concluding the contract or to leave the site. The

visitor or web surfer is liable, if arises liability, as per the provisions of the service terms and conditions. The issue is, have all the basic legal requirements of the law of contract been fulfilled. The capacity of party to contract is a basic legal requirement. Unless the party attains the majority age, stands sound mind, or has not qualified under law to which he is subject, he cannot be a party to the contract. This is under Indian law. In case of click wrap contract or standard form contract, who scrutinizes the age of majority. This is a legal fiction and a legal flaw. Signing up for obtaining an e-mail ID from an email service provider is an example of legal flaw. The email service provider does not apply any mechanism to ascertain whether the client party has attained major, sound mind and qualified under the law. Again another uncertainty is, under which countrys law, majority age, state of sound mind and qualification would be determined. Anyone can sign-up, obtain an email ID from any email service provider of any country. Therefore, the basic legal requirements of paper based contract are also necessary in information technology law. Alternatively, whether a need comes to amend the law of contract in order to fit electronic contract, A contradictory view is brought for study, since computer is not a legal person, it cannot be a party to the contract[7]. This point of argument may be true, but this may be kept in the category of standard form contact. As the law of Information Technology of most countries stands that an offer may directly be made by sending the offer through email or by displaying on a webpage. Special provisions on Electronic Governance and attribution of Acknowledgement and Dispatch of Electronic Records, in short point, legal recognition of electronic records are incorporated in information technology laws.[8] In case of ecommerce transaction between parties from different locations of the globe, the question arised is, under which countrys law the transaction shall be sealed, apart from debating absence of physical signature, consensus adidum. Prima facie it has been a question, where did the offeror actually receive acceptance?Would the acceptance be deemed to have been communicated at the place where the offeree clicks the 'Accept' icon (as the action of clicking the icon is done on the offeree's computer)? Or would it be deemed to have been communicated where the server (which actually hosts the 'Accept' icon) is located? Or would it be the place where the offeror actually reads the acceptance on his

computer (which can be at different place than the location of the server)?[9]. Acceptance of an offer in physical contract, usually, is done by some visible manifestation or by conduct effecting the acceptance. The acceptance should be expressed by some act or omission by the intended party, in a visible form or by any legally viable methodology, to communicate the assent of the acceptor to the provisions of the offer. (before performance of the contract on the terms and conditions). In e-commerce environment, it is stated that, acceptance may be conveyed by posting "an email message of acceptance, or by delivery online of an electronic or digital product /service, or by delivery of the physical product, or by any other act or conduct indicating acceptance of the offer"[10]. According to literal meaning of acceptance, expressing acceptance by sending an email message and by any other act or conduct indicating acceptance of the offer is legally valid; whereas the purport of the statement of acceptance mechanism as drawn in the forgoing discussion, that is "by delivery online of an electronic or digital product /service, or by delivery of the physical product" is not legally valid. Because delivery of product or service either under traditional or electronic contract shall be deemed to be discharge of contract under the service terms and conditions agreed upon. It is the last stage and performance of the contract, the failure amounts to breach of contract. The remedy for breach is to perform the contract in accordance with the same terms and conditions or otherwise or by taking an action against the defaulter party to court for damages. Since electronic commerce law is in infancy, n-th term (in mathematical language) legal issues are generated. More the issue and more the debate yields the answer to what electronic commerce law jurisprudence is. The reason for uncertainty of the existing law, legal system and infrastructure in the application and enforcement in highly developed electronic environment is that these laws are pre digital environment law. Further, the Trade and Development Board of the United Nations urged the government to adjust (by amending in fact) their national laws to be technology-neutral and to introduce technologically neutral legal infrastructure to avoid legal uncertainty of the paper based legal system. [11]. ss

ADR has also been emerged as a most likely substitute to traditional trial of cases; the judiciary, however, has the final say, to determine the substantive, applicable procedural components and interpretation of law not exempting infant electronic commerce law. No doubt, judiciary not below high court has constitutional authority to interpret law. However, this interpreting authority gets faded when symbiosis occurred with corruption. A division bench of the Supreme Court heavily criticized the Allahabad High Court with the remark 'rotten' high court under 'uncle judge' tag in entertaining a civil appeal. The supreme court in its unprecedented remark said, "there are some incorrigible judges in the Allahabad High Court who pass orders on extraneous considerations[12] The supreme court did not end its strong criticism. Concentrating on uncle judge syndrome, the court furthermore noted "..something is rotten in the Allahabad High Courtsome judges have their kith and kin practicing in the same court, and within a few years of starting practice, the sons or relations of the judge become multi-millionaires and have huge bank balances"[13] Introduction, familiarization, implementation and enforcement of ecommerce taxation (customs duty) (enforcement of economic laws of state) and levying mechanism are not an easy task. Levying mechanism of tax and trade tariff, enforcement mechanism for legal remedies or dispute redressal system (ADR has been emerged as an alternative) for breaking the law by traders are a major concern. Enforcement of rights and corresponding obligations of buyer or seller, litigation for infringement of intellectual property rights, competition laws, content liability of website owner, and choice of law, among others, are other key legal issues. In substance, the main legal issues involved in e -commerce include evidential, contractual and admissibility of system generated record or document which has no physical signature. As the need comes to enforce the law in cyberspace, the system generated document has been made admissible by legislations[14] of most countries. An electronically signed document can cryptographically bind the signature to the entire document whereas a written signature on the last page of a document, however, may leave a question as to which of the preceding pages are parts of the signed document[15]. A

document to be having legal effective must be signed by the person who prepared/sweared/submitted. Putting a signature shows the presence of physical characteristics of the person (s) or party (ies) and also indicates that the person(s) or party (ies) has/have read and understood the content of the document. The main point is, presence of physical characteristics of the signatory to the document to be issue. This is the advantage of traditional signatures over electronic alternatives. Electronic information, on the other hand, may not also be reliable because of its vulnerability to tampering and danger of possible fraud intentionally by system operator or unethical hackers. However, one technology argument is that electronic records or documents are authenticated by digital signature. A digital signature is similar to that of a physical signature in terms of its authentication value. It satisfies that the signature is of the intended person; he has put the digital signature after having read the text or data or message; the text, message or data is original i.e. not tampered with. Therefore, digital signature is more trustworthy than physical signature. As a rule of evidence in law, the evidence must meet the legal requirements for admissibility in court. Electronic records or documents, in order to be admissible, should concrete that the record or document is authentic, best evidence in terms of originality or acceptable certified copy. The degree of admissibility of electronic record is its proof of the data integrity before submitting to court that the electronic records or documents are retrieved, stored, maintained and generated for reproduction by a trustworthy high end technological process and the party to the dispute has the onus to proof it. The legitimate authority to regulate a commercial transaction has always been based on the physical presence of the parties to the transaction to the physical market place and any dispute, if arises in the transaction, is within the jurisdiction of domestic court[16] . Transaction in the internet, in fact, has done in a borderless jurisdiction as the internet has global nature i.e. no physical boundary border mile stone fixed in cyberspace. Therefore, the question of extra-territorial jurisdiction is always arised, which can be little subside only by international treaties. "The electronic speed deterritorialises the law"[17] as far as legal questions of jurisdiction and place of commission

of the act or place of damaging act are concerned. This has been a major concern for judiciary, law enforcing executives and legislatures. Expanding local laws to globally spreaded internet is a challenging task. Enforcement of contracted performance, for example, for the damaging act over the internet causes legal problem. First, Internet deterritorialises the law. Second, deterritorialization causes problem in injunction process[18] even after the court had adjudicated and decided a dispute, for, injunction order as a rule issues under a law of specific relief of a defined territory i.e. within a state. Enforcing an injunction order outside local limit of a state is barred by public international law. Exempting this legal limitation, enforcement of law for cases that happened over the internet is enforceable on the ground of technical justification. For instance, a service provider of a website cannot prevent either a registered user or guest from any part of the world until and unless, the site got blocked by government. It is also beyond possibility to enact and enforce a uniform global electronic commerce law. Cyber jurisdiction is most important and a complex issue, for, the internet may be taken as an intruder in the sovereignty and territorial integrity of a state. Cyber threat is dangerous. Cyber terror, or in other words, terror email is really dangerous and a potential threat to a nation's territorial integrity and sovereignty. Commission of cyber crime takes only few seconds, few minutes. It can also breakdown economy (financial) of a country. Its trace is also so tough; sometimes virtually impossible for the investigating agencies to trace. A terror email usually goes passing through several servers in a country or of other countries too. Because of this nature of cyber war, application of local laws is not possible except under an instrument of extradition treaty. A national daily reported the modus operandi of sending a terror email, after the investigating agencies traced its origin and the technology used in the commission of the act. Such an email is usually sent from an unsecured Wi-Fi connection and then bounced off several servers before destinating its final internet protocol address on a computer of a China based company. To quote the text of the newspaper for a clearer legal issue involved, The email was sent by getting into an unsecured Wi-Fi connection. in Mumbai...The email was then bounced off several servers, with the final internet protocol address leading to a man.., whose

computer was on the China Unicom Heilongjiang Province Network in Chinese city of Harbin.This e-mail configuration is commonly used by e-greeting websites.[19] The blatancy of the act expressed in this quotation is a truism of extra-territorial jurisdiction in criminal nature. Legal issues in electronic commerce and transactions are usually occurred in matters of copyright, trademark, privacy and security issues. The level of security of protection of data by website owner from access by unauthorized persons and legal remedy in case of misused, involved a serious legal issue as it arises violation of legal rights of the data holder. And in such a case, trans-border legal jurisdiction is also involved. Misuse of properties of protected copyright and trade mark have been everywhere in internet activities. No legal mechanism can effectively stop such a widespread violation. Instances of such misuse are transferring music, video, software files etc. Economics of e-commerce as an integral part of economy has led the government to frame e-commerce legislations. In Asia, such examples of ecommerce legislations or sought to be passed are Australias Electronic Transactions Act 1999, Broadcasting Services Amendment (On-Line Services) Act 1999, Privacy (Private Sector) Bill and the Copyright Amendment (Digital Agenda) Bill 1999; South Koreas Electronic Transaction Basic Act; Singapores Electronic Transaction Act 1998; Hong Kong Electronic Transactions Ordinance 2000; Japans Draft Bill Concerning Electronic Signatures and Certification Authorities and the Law Partially Amending the Trade Mark Law; Malaysias Malaysian Communications and Multimedia Commission Act 1998, Communications and Multimedia Act, 1998, Digital Signature Act, 1997, Computer Crimes Act 1997 and Telemedicine Act, 1997; the Philippines Electronic Commerce Act; and Indias Information Technology Act, 2000. The government of India through parliament had amended the Indian Penal Code, 1860, Indian Evidence Act, 1872, Bankers Book evidence act, 1891 and Reserve Bank of India Act. 1934, several existing laws to cover e-transaction activity. The Information Technology Act, 2000 is the parent governing legislation of electronic activities as of today and transaction electronically has given legal recognition by this Act.

Although there are governing and regulating laws for transaction of electronic activities, it is not sure to have a flawless electronic activities governing law. Some suggested that internet activities in cyber space could be regulated by fitting the entire activities in the existing legal system as it is, as any other legal aspect to make 'functional equivalency' (as used the terms by some scholars) or by extracting appropriate application of legal rules from existing legal system and applying the same framework in cyber space. Since the law making process and dimension of law depends upon the socioeconomic and political reasons and factors, the flaws occurred in the area of information technology law in fitting in the traditional legal system, specially electronic transmission from which endless issues have been generated due to the absence of geographic boundaries are due to its nascentness in the well established legal system. Since the law and legal system of the all countries are not static and laws are framed according to the needs, issues relating to electronic transaction and communication occurred in the world of cyberspace will also not as it is.

[1] Frye Emily, Legal Issues in Documenting : e commerce transactions, Management Journal, www.allbusiness.com/legal/laws-governmentsregulations-business [2] Avtar S., Law of Contact, Eastern Book Company, Lucknow, 6th Ed., 1994, p.49 [3] Sharma V., Hand Book of Cyber Laws, Macmillan India Ltd, Delhi, 1st Ed. 2002, p. 60 [4] Basu s, et al, Legal Issues Affecting E- Commerce: A Review of The Indian Information Technology Act, 2000 , www.bileta.ac.uk/02papers/basu.html, p. 5 [5] Ibid note 4 at p. 5 Its description is studied at latter stage. [6] Supra note 2 at p. 46 It is described as exploitation of weaker party

[7] Waghdhare A, E-Contracts and Issues Involved in its Formation, www.legalservicesindia..com/article/1350-E-Contracts -&-Issues-involved-in-itsformation.html [8] Information Technology Act, 2000 (of India) is an example. First five Chapters lay down legal recognition of electronic records. [9] Supra note 4 at p.8 [10] Ibid note 4 at p.6 [11] Recommendation of United Nations Conference on Trade and Development Board on Capacity-Building in the Area of Electronic Commerce: Legal and Regulatory Dimension held at Geneva on 14-16 July 1999, Agenda item 3. Page 2. Its transcript was issued under office memo no. TD/B/COM.3/EM.8/L.1 19 July 1999 [12] Angry S.C. Slams 'rotten' Allahabad High Court, The Hindustan Times, Dec. 27, 2010, Delhi ed. p. 1 [13] High to court to challenge S.C, The Hindustan Times, Dec.3, 2010, Delhi, P. 1 [14] Information Technology Act, 2000, Electronic Commerce Act, 1998, Electronic Commerce Support Act, 1998( of India [15] U.S Department of Justice , Legal Considerations in Designing and Implementing Electronic Process: a Guide For Federal Agencies, www.justice.gov/criminal/cybercrime/eprocess [16] Chris W. Higgins et al, Legal Issues of Electronic Commerce : Activity Policies, Intelligent and Ethical Transactions, hytime.org/papers/higgins1.html [17] Hoeren Th, Law, Ethics and Electronic Commerce, in (IRIE) International Review of Information Ethics Vol. 3 (06/2005), p. 48

[18] Supra note 15 [19] "Tough to trace terror email," Hindustan Times, December 9, 2010, Delhi Ed., p.15