ELECTRONIC CONTRACTS IN THE UNITED STATES AND THE EUROPEAN UNION:
Varying Approaches to the Elimination of Paper and Pen

W. Harry Thurlow

This paper examines enacted and proposed legislative attempts to validate contracts in electronic form and the prospects for international harmonization between North America and Europe. Taking UNCITRAL's Model Law on Electronic Commerce as a baseline, the approaches found in the United States and the European Union (including the examples of France, Germany and the UK) are compared and analysed. The paper is divided into a basic research section identifying the various positions on electronic contract enforceability, and a comparative analysis section dealing with the underlying reasons for diverging opinions and impediments to harmonization. The recognition of an electronic contract is mainly supported by functional equivalence requirements in the United States (although there are exceptions in certain states). This means that if a contract is able to meet the traditional purposes of writing, it is valid. The European Union has put forth similar initiatives but the latitude states enjoy at the implementation stage allows for significant divergence and in some cases rigid requirements for specific technology and form. Thus, a valid contract in one country is not necessarily going to be recognised as such elsewhere. The different approaches to enabling electronic contract enforcement revolve around the question of whether to legislate a type of form or a type of result. The main differences in the various positions do not, however, prevent electronic contracting. At most they increase transaction costs and reduce potential efficiency while ensuring consumer protection in a way that best fits the individual legal environments. Ultimately, the prevalence of digital signatures as the leading security device in Europe and the United States appears to make the form of harmonization less important as the results appear the same. From that standpoint, it is the e-commerce industry that is in a position to dictate harmonization, since governments will naturally look to it for advice on standards and international comparison.


Cite as: W. Harry Thurlow, Electronic Contracts in the United States and the European Union: Varying Approaches to the Elimination of Paper and Pen, vol 5.3 ELECTRONIC JOURNAL OF COMPARATIVE LAW, (November 2001), <http://www.ejcl.org/53/art53-1.html>

Contents
1. Introduction
2. UNCITRAL Model Laws
3. The Current US Position
4. The Current EU Position
4.1 Germany
4.2 France
4.3 United Kingdom
5. Comparative Analysis
6. Conclusion: Prospects for Harmonization
Notes

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