ELECTRONIC CONTRACTS – E- CONTRACT

Definition: E-contract is a contract modeled, specified, executed and deployed by a software system. E-contracts are conceptually very similar to traditional (paper based) commercial contracts. Vendors present their products, prices and terms to prospective buyers. Buyers consider their options, negotiate prices and terms (where possible), place orders and make payments. Then, the vendors deliver the purchased products. Nevertheless, because of the ways in which it differs from traditional commerce, electronic commerce raises some new and interesting technical and legal challenges.

E-contract is any kind of contract formed in the course of e-commerce by the interaction of two or more individuals using electronic means, such as e-mail, the interaction of an individual with an electronic agent, such as a computer program, or the interaction of at least two electronic agents that are programmed to recognize the existence of a contract. The Uniform Computer Information Transactions Act provides rules regarding the formation, governance,
and basic terms of an e-contract. Traditional contract principles and remedies also apply to econtracts. This is also known as electronic contract.

Electronic signature
An electronic signature, or e-signature, is any electronic means that indicates either that a person adopts the contents of an electronic message, or more broadly that the person who claims to have written a message is the one who wrote it (and that the message received is the one that was sent by this person). By comparison, a signature is a stylized script associated with a person. In commerce and the law, a signature on a document is an indication that the person adopts the intentions recorded in the document. Both are comparable to a seal. In many instances, common with engineering companies for example, digital seals are also required for another layer of
validation and security. Digital seals and signatures are equivalent to handwritten signatures and stamped seals.

Increasingly, digital signatures are used in e-commerce and in regulatory filings as digital signatures are more secure than a simple generic electronic signature. The concept itself is not new, with common law jurisdictions having recognized telegraph signatures as far back as the mid-19th century and faxed signatures since the 1980s.

What Are the Advantages & Disadvantages of an Electronic Signature?

Equipment Cost
Electronic signatures are created and read by sophisticated technologies that use networks to verify personal data like business location or social security numbers, or which are advanced enough to compare points within handwriting or a fingerprint with points in images in databases. This equipment isn’t always cheap, as pointed out by Beginners Guide. Even once initial costs are met, advances in electronic signature technology will mean that a business must continually update its electronic signature systems and provide technical support.

Deterred Clients
Electronic signature systems assume that people will be comfortable or familiar with the electronic signature methods and equipment. However, previous generations of individuals may not have been exposed to the newer technology and thus may have trouble initially using it. Even tech-savvy individuals still will have to stay abreast of technological changes if they want to conduct business electronically in the future. The lack of exposure to methods and equipment, along with a need for continuing technology education, may deter some clients from using an electronic signature.

Recognition
Work led by Fritz Grupe published in the 2003 issue of The CPA Journal indicates that there is inconsistency in the recognition of electronic signatures as of 2010. People are not necessarily required to recognize an electronic signature as valid, depending on their jurisdiction.

Authentication and Verification
In terms of authentication and verification of identity, an electronic signature can be better than an ink-on-paper signature, depending on the system used. For example, if someone loses an unsigned credit card, someone else can sign it and the signature on the back of the card will match receipt signatures, even though the person signing isn’t the card owner. By contrast, an electronic signature system that relies on fingerprints is much more secure because one cannot replicate or forge the fingerprint matrix.

Long-Distance Business
With an electronic signature, an individual does not have to be in the same geographical location to complete a transaction or validate a contract. People thus can use electronic signatures to conduct business from thousands of miles away if needed, increasing global
business opportunities and potential profit margins.

Material and Storage Reduction
The U.S. Immigration and Customs Enforcement and Grupe both argue that electronic signatures reduce the amount of materials used on a regular basis and take less space to store. Furthermore, electronic signatures facilitate tasks such as e-filing and electronic file and
database searches. This reduces time needed to find and verify data. Overall, these factors can reduce business costs.

ELECTRONIC DOCUMENTS
What are the disadvantages of electronic documents? Electronic documents can be subjected to failure of an electronic system, virus, corruption and computer breakdown.

Disadvantage of electronic documents
One disadvantage to electronic communication is the fact that you can misinterpret what someone is saying. This will affect the direction of the conversation.

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