Technology – Are We Keeping up with Times Legally?

It is safe to state that the world is increasingly becoming more technology dependent. We are woken up by the alarm on our smart phone, we eat porridge after that it has been warmed up in the microwave, and on the way to work while stuck in traffic we check the weather – the news highlights and our e-mails. Our working days seem to fly by while we are chained to our desks reading and replying to emails and we unwind after a days’ work by watching a movie on our 50 inch smart TV. Can we say that the law and our legal ‘instruments’ have also kept up with technology?

The definition of a contract is an agreement or accord between one or more parties and is concluded in order to create, regulate or dissolve certain obligations. With the introduction of the Electronic Commerce Act (e-Commerce Act), electronic commerce has been facilitated by establishing legal validity of electronic records, transactions, contracts and signatures and by putting in a  place a legal framework for determining the time and place, when and where an electronic communication is dispatched and received. The e-Commerce Act provides that an electronic contract shall not be denied legal effect, validity or enforceability solely on the grounds that it is wholly or partly in electronic form or has been entered into wholly or partly by way of electronic communications or otherwise. This provision echoes the provisions of the Directive on Electronic Signatures which provides that Member States shall ensure that an electronic signature is not denied legal effectiveness and admissibility as evidence in legal proceedings solely on the grounds that it is in electronic form.

An “electronic signature” is akin to a physical signature in the sense that it serves as a means of authentication of a person’s adoption of the contents of a document, except that it is in electronic form and is attached to or associated with electronic data, as by way of example an electronic contract or communication such as an e-mail. Such electronic signature can take the form of a typed name or a digitized image of a handwritten signature.

The Directive on Electronic Signatures goes further into detail with respect to the “advanced” electronic signature as one which is uniquely linked to a particular signatory, and which is capable of identifying such signatory from another. In order to qualify as “advanced”, an electronic signature must be linked to the data to which it relates in such a way, that any subsequent change to the data is detectable.

An advanced electronic signature takes the concept of the traditional paper-based signature, and turns it into an electronic “fingerprint”. This “fingerprint”, or coded message, is unique to both the document and the signer, and binds them together. Thus, if any changes are made to the document after it has been signed, the signature is invalidated, thereby protecting against information tampering and fraud.  

As a result, an electronic contract which is signed by means of an electronic signature or an advanced electronic signature shall be considered to be valid and binding if such electronic signature is:

• Uniquely linked to the signatory – that is, the electronic signature could only have been created by the person signing the document;

The e-Commerce Act also provides for the protection of consumers who enter into electronic contracts, and establishing a framework within which services related to electronic signatures can be provided in Malta.

About the Authors

Dr. Ann Bugeja joined CSB Group in January 2011 where her areas of interest cover Ship and Yacht Registration, Employment Law, Contract Drafting,Residence and Work Permit applications and applications for Special Tax Status.

Dr Christina Borg DeBono joined CSB Group in December 2014 as a Junior Legal Associate. Christina read Law at the University of Malta and was conferred a Bachelor of Laws with European Studies in 2011 and a Diploma of Notary Public in 2012.