Journal of Law, Information and Science
|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Journal of Law, Information and Science |
|
by
>Paul Nitschke[*] & Lynden Griggs[**]
The major banks have indicated their preference for electronic banking by customers. Higher fees now apply for branch banking; indeed many branches are being closed, advertisements extol the virtues of telephone and computer banking. The purpose of this article is to raise some of the issues surrounding banking on the Internet, particularly in the context of international banking transactions. The traditional rules are mentioned followed by a discussion of the problems surrounding Internet banking.
The information technology industry has for many years used the term network to describe computers linked together so they can communicate.[1] Local area networks [LAN’s] and Wide Area Networks [WAN’s] differentiate categories of networks by reference to size.[2] The Internet could be described as the ultimate global network.
“Suppose you wanted to witness the birth and development of a legal system. You would need a large, complex social system that lies outside all other legal authorities. Moreover, you would need that system somehow to accelerate the seemingly millennial progress of legal development, so you could witness more than a mere moment of progress. This hypothetical system might seem like a social scientist’s fantasy, but it actually exists. It’s called the Internet.”[3]
The Internet is the catch phrase used to describe the massive world-wide network of computers. The word Internet literally means network of networks. In itself the Internet is comprised of thousands of smaller regional networks scattered throughout the globe. On any given day it connects in excess of 20 million users in over 50 countries.[4] The Internet is thus a decentralised system spread across millions of computers worldwide. It is not owned by anyone and has no central controlling computer or governing body. Consequently the legal community must now begin to focus and respond to the legal implications and difficulties thrown up by the Internet.[5] The World Wide Web [WWW] dominates the Internet, but it requires a separate definition. The Web refers to a body of information - an abstract space of knowledge, while the Internet refers to the physical side of the global network. The WWW is therefore a client/server system for finding and retrieving Internet information. We thus exist in an era of information driven by electronics and characterised by an ever increasing ability of computers to process, create and manipulate information. The information technology age challenges many basic terms and presumptions in international banking law. Based on these technologies, changes occur not only in how banking transactions occur, but also what subject matter provides the central focus of business dealings. Computerisation and the resulting heightening of the value and character of information affects how transactions unfold and what presumptions or basic rules should be developed for business,[6] in particular international banking transactions.[7]
This purpose of this article is to examine contract formation on the Internet (with particular respect to banking arrangements), the liability for unauthorised transactions (with specific reference to the United States system) followed by a discussion of the nature of the bank - customer contract on the Internet. The importance of this lies in the fact that an increasing amount of bank transactions will be conducted via the medium of the Internet.
A fundamental principle of contract law is that an agreement is undertaken based on the decisions of an individual, either on his own behalf or via an agent. There is an offer and an acceptance made by people exercising independent decision making power.[8] The advent of computers as tools of banking threatens the viability of this tenet. Computers do not think or evolve on their own volition. They can only act unilaterally when programmed to do so by humans. Therefore computers may act on their own where the general parameters of actions are set and left to operate. This fact therefore creates a different environment for electronic contracting, when contrasted with a common law contract. Essentially pre-programmed computers make choices and issue responses with or without human involvement. This human factor variance poses a dilemma for contract theory and for contracting practice. The central issue is therefore - under what conditions are the actions of two machines, without human connection adequate to create a contract?[9]
In an electronic exchange of information, such as a banking transaction, the central issue is whether electronic messages establish an offer and acceptance, given the absence of documentation and the absence of human decisions in an automatic exchange. This area also deals with issues concerning when an offer, acceptance, or rejection of the offer takes effect. An offer consists of an expression of a willingness to enter a contract when that expression occurs in a form sufficiently real to establish an agreement.[10] Even if a computer issues the specifics of a payment transaction, the actions taken by the system stem from programming created on behalf of a bank, or specific instructions entered by the bank’s staff.
A different approach is that under either scenario stated above, sufficiently constituted, the electronic message is a sufficient expression of intent. There are obviously additional issues involved in cases where unauthorised people, or inaccurate information triggers an offer from the system. This situation goes to issues of attribution of the electronic message, and ascertaining who bears liability for the error. These issues with be dealt with later in this article. Nevertheless subject to considerations about the Statute of Frauds 1677, no requirement exists in law that an offer be in writing, or that there be a conscious immediate intent to make a binding contract.[11] General contract law provides that acceptance must normally be made in a manner specifically required by the offeror, but if there is no requirement concerning the method for acceptance of the originating offer, acceptance may be in any manner.[12] Therefore a financial institution which makes computer based systems available for international banking and payment transactions may respond through an electronic acceptance of the offer. The critical issue of what constitutes a valid acceptance turns on the terms of the offer itself. The electronic milieu therefore creates issues unique to it, in reference to determining if a valid acceptance occurred. These deal with the fact that traditional contract law assumes the decision to accept or not accept an offer occurs through human agency, through the exercise of human choices and discretion. Because of this, the common law presumes that an effective acceptance must be communicated with knowledge of the offer, and an intent to accept that offer.[13] As a matter of law, intent is measured by objective manifestations, rather than subjective intention. Thus in ordinary contract law, the defence of - ` I did not mean what I said’ , may not carry weight. Similarly, the defence of - `I did not mean what my computer said’ , may not be appropriate where all the characteristics of the electronic response are gauged to induce the other party [or his computer] to conclude that a contract has been reached.
Therefore there must be some indication that in contract formation on an automated system such as the Internet, there is something which signifies acceptance, rather than merely confirming receipt. Merely issuing a confirmation of receipt of the offer cannot create a contract, whether confirmation occurs automatically, or by a physical act of a human. The formation of a contract on the Internet rests fully with the range of conduct that under general contract law, constitutes a form of acceptance sufficient to create a contract. In relation to electronic messages on the Internet, such as those between two banks, the idea of offer and acceptance requires a focus on something other than the notion of attribution or allocation of responsibility. This raises the issue of if a message is sent, say to debit an account, who should bear the liability for an unauthorised transaction?
In closed electronic systems, such as those involving banking transactions, attribution issues can be based on compliance or non-compliance with established verification procedures.[14] This approach was adopted in the United States in U.C.C. (US) Article 4A dealing with electronic fund transfers. Under this provision the onus was placed on those who had the opportunity to prevent the loss under established procedures.[15] In cases where the primary electronic process involves transactions dealing with bank/customer allocation of the risk of error, the law has developed in a way that responds to the better ability of the system operator to spread or prevent loss.[16]
The current draft revision of U.C.C. (US)[17] Article 2B provides the following with respect to attribution -
Section 2-212 Electronic Messages: Attribution
Where an electronic message is sent to another party, as between the party indicated in the message as the initiating party and the party receiving the message, the party described as the initiating party is bound by the terms of the message if :
[1] the message was sent by that party or a person who had authority to act on behalf of that party in reference to such messages;
[2] by properly applying a procedure previously agreed to by the parties for purposes of the authentication,[18] the recipient concluded that the message was originated by, or otherwise attributable to, the initiating party; or
[3] the message as received resulted from actions of a person whose relationship with the party described as the initiating party enabled that person to gain access to and use the method employed by the alleged initiating party to identify messages as its own.
The basic structure focuses on electronic messages, whether offers, acceptances, or confirmations. The revision attempts to draw a balance between absolute liability for messages indicated as being from a particular person, and no liability unless actual agency relationships existed. It can be seen that paragraph [1] deals with common agency rules. Paragraph [2] focuses on security procedures for authentication and makes a message attributable to one party, if the other used the procedures and reached that conclusion. An example would be if a person obtained a PIN[19], and then used it to execute an unauthorised transaction. Under this scenario it could be submitted that liability in the form of being bound by the message, attaches without regard to fault, so long as the agreed procedure was used by the recipient party. Paragraph [3] deals with a form of fault, attributing the message to one party if the means of making the identification occurred by way of a relationship between the fraudulent party, and the party being made responsible for the message.[20]
Therefore in the case of an unauthorised transaction, this draft places the loss onto the receiving party, unless the unauthorised individual (such as a hacker) defeats an acceptable authentication procedure, or obtained the relevant information from a relationship with the party attributed with the message. An intermediate position would only be appropriate if the attributed party was at fault in allowing the hacker to obtain the relevant information. A proposed revision of the U.C.C. (US) Article 2 and Article 2B contains an approach to dealing with electronic contract formation:
Section 2-208 Electronic Transactions: Formation
[A] In an electronic transaction, if the electronic message initiated by the other party evokes an electronic message or other electronic response by the other, a contract is created when:
[1] the response is received by the initiating party, if the response consists of furnishing digital information or access to it to the initiating party and the message initiated by that party invited such a response;[B] A contract is created under subsection [A] even if no individual representing either party was aware of or reviewed the initial response, the information, or the action that signifies acceptance of the contract. Electronic records exchanged in an electronic transaction are effective when received in a form and at a location capable of processing the record or the intangible even if no individual is aware of their receipt.
[2] the initiating party receives a message signifying or acknowledging acceptance of the offer contained in its message, or;
[3] the initiating party sends a response that signifies acceptance, if the response consists of an offer or opportunity to furnish the intangibles or access to the intangibles.
[C] In determining when an electronic message sent to another party is received by that party, the following rules apply;
[1] If the recipient of the record has designated an information system for the purposes of receiving such records, receipt occurs when the record enters the designated information system...
In this draft, the concept of an electronic transaction is one hinged to a contract that can be created electronically. Paragraphs [A(1)] and [A(2)] apply a receipt rule to two types of acceptances - acceptances by performance and acceptances by an electronic message. Therefore in order to create a contract two events must occur which ensure that knowledge exists between the parties. The two events are the first message and the response, both of which are received. Paragraphs [A(3)] deals with a form of counter offer, while paragraph [B] makes it clear that the creation of a contract does not hinge on the existence of a human decision maker. The entire electronic transaction is thus validated, subject to the attribution issues already discussed.[21]
An alternative approach to verification of electronic signatures has been adopted in a number of jurisdictions in the United States of America. For example Florida has passed legislation providing for the authorisation of electronic signatures.[22] This legislation is designed to facilitate economic development and efficient delivery of government services by means of reliable electronic messages. The definition section[23] provides that a:
“Digital signature means a type of electronic signature that transforms a message using an asymetric cryptosystem such that a person having the initial message and the signer’s public key can accurately determine:
(a) whether the transformation was created using the private key that corresponds to the signer’s public key,
(b) whether the initial message has been altered since the transformation was made.
A key pair is a private key and its corresponding public key in an asymetric cryptosystem, under which the public key verifies a digital signature the private key creates. An asymetric cryptosystem is an algorithm or series of algorithyms which provide a secure key pair.”
Section 5 then states that “Unless otherwise provided by law, an electronic signature may be used to sign a writing and shall have the same force and effect as a written signature.”
The first principle is that the legal character of the relationship between banker and customer is that of debtor and creditor. The bank is the debtor of the customer, whether the customer has a current or deposit account.[24] As the Internet is a relatively new phenomenon in the commercial world, the terms of the U.C.C discussed above could be incorporated into any bank/ customer relationship. However these provisions appear to provide a inadequate framework for defining the rights and obligations of parties who seek to settle transactions outside of the banking system on the Internet.[25] In relation to the Australian regulatory regime the Electronic Funds Transfer Code of Conduct may have some relevance.[26] However it is likely that the Code has little relevance to the issue under discussion; it covering consumer orientated issues such as notification of feed structures, the requirement for customer confidentiality and that there be a dispute resolution mechanism.[27] It will be necessary to judge whether the Code should apply in part to new technology, or whether a new set of rules and procedures need to apply.[28] The non-geographic character of the Internet makes it difficult, if not impossible, to apply current territorially based regulations to banking transactions on the Internet.[29] Domestic nations therefore can not control on-line actions, when a physical location is irrelevant or can not even be established.[30] One possible solution is for a country to extend their jurisdiction, and to amend their laws as necessary, to attempt to govern all actions on the Internet that have an impact on their own citizens. An alternative course of action is that sovereign nations can enter into multi-lateral international agreements to establish new and uniform rules specifically applicable to the contract between the bank and the customer on the Internet. This would obviously require specific legislation between the respective bank regulators to govern transborder banking transactions on the Internet.[31]
Before discussing the conflict of laws implications for Internet banking transactions, reference must be made to conflicts of laws principles in banking law. [32] In many common banking documents the agreement between the parties settles the proper law of the banking contract.[33] In the absence of an agreement it is now established that the proper law is the place of the branch where the deposit is located.[34] This would also be the location of the debt, on the basis that is where the debtor is.[35] These rules about the localisation of the proper law in the absence of agreement, and about site, accord with the second core principle, that the usual obligation of a bank is to repay the deposit back. Applying these basic principles to conflicts of law on the Internet, it could be argued that the location for any jurisdictional question is where the host computer is located. That is the location of the server.[36]
In relation to banking transactions on the Internet, the legal issues raised by conflicts between national laws, and the ability of Internet users to undertake transactions across borders freely, might be addressed by creating a uniform law of the Internet. However no treaty regime is likely to succeed in imposing uniform rules on the Internet, unless every sovereign nation whose citizens use the Internet joined in the agreement. Any agreement would have to be drafted in general terms, and also provide low cost, easily accessible dispute resolution procedures. A new international organisation could attempt to establish these rules - and establish the means of enforcing these rules and holding those who make those rules accountable to appropriate constituencies.
The issues raised above lead to the counter issue of why the Internet has to be governed at all. The Internet currently prospers precisely because of Its decentralised architecture, and the absence of a centralised rule making authority. To avoid the problems associated with a centralised authorities, Internet users, including the banks, could voluntarily accept standards for Internet users. It can be argued that the technical protocols of the Internet have in effect created a complex adaptive system that produces a type of order that does not rely on established legal systems. This will overcome the plethora of problems associated with the establishment of a centralised authority. Once these operational rules have been established it would be a simple task to access a Web site to peruse these rules. On the same Web site there could be a page listing those individuals and institutions who have contravened or who agree to be bound by those rules.
We take for granted a world in which geographical borders are of primary importance in determining legal rights and responsibilities. Territorial borders, generally speaking, separate areas in which different sets of laws apply. The Internet radically subverts a system of rule making based on borders between physical spaces. The system is indifferent to the physical location of computers, and there is no necessary connection between an Internet address and a physical jurisdiction. Many of the jurisdictional problems associated with the Internet could therefore be resolved by conceiving of the Internet as a distinct place for legal analysis. Treating the Internet as a separate jurisdiction to which distinct laws apply, may be the only realistic approach. Conceiving of the Internet as a separate place for purposes of legal analysis will have great simplifying effects. An idea recently mooted was a global registration system for all domain names. It has also been suggested that a Cyber-Court could be established to govern disputes on the Internet, which could perhaps even be set up within the Internet structure.[37] Once we take the Internet seriously as a distinct place for purposes of legal analysis, many opportunities to clarify and simplify the rules applicable to on-line banking transactions become available.
This document provides an example of some of the matters that a contract drafted to cover electronic commerce will need to address and resolve.[38] As can be seen many of the issues are typical to all contracts.
1. Specify the names and addresses of the parties.
2. Goods or Services and their Payment
Detailed description of what is being provided and how it will be paid for. In electronic commerce, it would be advisable to at least specify partial payments up-front, with the balance on completion.
3. Choice of Law
Specify which jurisdiction will govern any disputes. Obviously with the international nature of the Internet this could be crucial.
eg. “This contract and any amendments are governed by the laws of the United States of America, with the exclusion of its rules of conflicts of laws.”
4. Dispute Resolution
Specify where arbitration will occur and how the arbitration is to be resolved. In essence what commercial arbitration system will apply. Given the limited experience of the judiciary with electronic commerce it seems prudent to foresee arbitration of any disputes. You may wish to specify that the World International Property Organisation Arbitration Rules are to apply or for example, the Global Arbitration and Mediation Association.
eg. “Any dispute arising in connection with this contract shall be referred to and determined by binding arbitration in the city of Sydney, Australia in accordance with the Commercial Arbitration Act 1984. (NSW)”
5. Amendments and Extensions
Specify how any amendments can be made. This avoids any discussions about what does and does not constitute a contract in an environment where electronic communications such as email are used.
eg. “Any amendments to the contract shall be binding only if the rules of evidence and formation detailed below are followed.”
6. Rules of Evidence and Formation
Specify what is required in terms of evidence. Will email communications constitute evidence? Should faxes be sent?
Is the system in place so that either party can present digitally signed[39], tamper proof electronic messages containing offers and acceptances.
eg. “An amendment to the contract shall be considered valid if either party can present adequate evidence that electronic messages have been sent or received. Unless shown otherwise evidence of communication will be provided by a digitally-signed tamper proof electronic message. The court or arbitrator may in their discretion accept as evidence a certified copy of an email message.”
7. Indemnification
Indicate whether this is appropriate
8. Warranties
Indicate what warranties are to be implied
9. Severability
Indicate whether severability is possible.
eg. “If any part of the agreement is invalidated, the remainder of the agreement shall still be valid.”
10. Total Agreement
Specify what constitutes the total agreement.
eg. “This contract contains the entire agreement of the parties with respect to the services and payments described.”
Signing Clauses..............
[*] Taxation Officer, ATO, Solicitor, Supreme Court of Victoria
[**] Barrister and Solicitor, Supreme Court of Tasmania, High Court of Australia, Lecturer in Law, University of Tasmania.
[1] C Davies, “Law and the Internet” (1995) 11 Computer Law and Practice 105.
[2] C Davies, ibid at p. 105.
[3] B. Wittes, “Law in cyberspace; Witnessing the Birth of a Legal System on the Net”, Legal Times, January 23, 1995 at p. 27.
[4] For statistics on the growth of the Internet see URL http://www.mit.edu:8001/people/mkgray.html. See also “The Accidental Superhighway - Net History”, The Economist, 1 July 1995; URL http://www.economist.com/surveys/internet/chart4.gif
[5] P Bartlett, “Internet: the legal tangle” (1995) 11 Computer Law and Practice 110.
[6] The gathering, transferring, and storage of money by unregulated entities on the Internet, outside of the existing bank regulatory framework raises fundamental questions of regulatory policy. These questions include basic issues regarding the safety and soundness of the financial system, the separation of banking and commerce, competitive equity among financial service providers, the integrity of the payments system, and the ability of the Reserve Bank of Australia to monitor and regulate these areas. However these issues are beyond the scope of this article. On this topic see G. Wahlert, “Australia’s Move to a Cashless Society: Some Implications for Law Enforcement”, Proceedings of Office of Strategic Crime Assessments Seminar, Canberra, August 1995; A. Tyree, “Virtual Cash - Payments on the Internet” (1996) 7 JBFLP 35.
[7] The first bank to implement Internet banking in Australia is NSW’s Advance Bank. It was recently voted as one of the world’s top 10 Internet banking sites by Internet financial services watchdog Money Page. Advance Bank introduced banking on the Internet on December 20, 1995, setting up an experimental site to test the market. Unlike EFTPOS and ATM networks the Internet does not involve the bank establishing their own dedicated network. Using the Internet, anyone can access the Advance Bank World Wide Web Site. It is like an electronic bulletin board. Customers can then download special software into their computers, free of charge, and use it to access their accounts. A number of financial institutions have since established a presence on the Internet. In the USA the Security First Network Bank has been set up to cater exclusively for Internet banking. It has no physical branches and offers account opening, transfers between accounts, bill paying and reconciliation services.
[8] Ignoring for the moment arguments about the inequality of bargaining power that exists in many situations, eg. employment contracts.
[9] The difficulties of the traditional rules concerning the making of a contract were alerted to in Integrated Computer Services Pty Ltd v. Digital Equipment Corp (Australia) Pty Ltd (Unreported NSW Court of Appeal, 23 December 1988 at pp. 16-18. “Commercial discussion are often too unrefined to fit easily into the slots of ‘offer’, ‘acceptance’, ‘consideration’, and ‘intention to create a legal relationship’ which are the benchmarks of the contract of classical theory...”
[10] See for example R. Clarke [1927] HCA 47; (1927) 40 CLR 227; Felthouse v. Bindley [1862] EngR 931; (1862) 11 CBNS 869
[11] See Stoeve v. Korowitz [1982] ACLD 495; Merritt v. Merritt [1970] EWCA Civ 6; [1970] 2 All ER 760; Todd v. Nicol [1957] SASR 72; Roufos v. Brewster (1971) 2 SASR 218. Contrast those cases dealing with letters of comfort Kleinwort Benson Ltd v. Malaysia Mining Corp Bhd [1989] 1 All ER 785; Commonwealth Bank of Australia v. TLI Management Pty Ltd [1990] VicRp 45; [1990] VR 510.
[12] Though acceptance must be unqualified (Byford v. Gates Bros Lumber Co 225 SW 2nd 929 (1950); its method must conform to the offeror’s requirements (Manchester Diocesan Council for Education v. Commercial and General Investments Ltd [1969] 3 All ER 1593); and it should be appropriate (Entores Ltd v. Myles Far East Corp [1955] EWCA Civ 3; [1955] 2 QB 327). Notification of acceptance can be dispensed with: Carlill v. Carbolic Smoke Ball Co [1893] 1 QB 256.
[13] See the cases cited at footnote 12.
[14] The Internet in effect allows access to a bank's computer system. This brings with it the serious risk of another user altering data on the computer or planting a virus. Practical steps can be taken to reduce this risk such as limiting access by other Internet users to a particular part of the system. However should such an interference occur an action may lie against the other user or even against the service provider.
[15] Along similar lines is the Model Law on International Credit Transfers drafted by the United Nations Commission on International Trade Law (UNCITRAL). This provision and the United States UCC Article 4A complement the practice and law developed by the finance industry. See HS Wulff, “Two Ways to Achieve the Same goal: The Model Law on International Credit Transfers and the New UCC Article 4A in the National and International Contexts” (1990) 9 Wisconsin International Law Journal 69.
[16] It has been estimated that 90% of International Fund Transfers are made without any agreement as to rights and obligations. See Coyle, “Big Buck Transfers A Risk”, (1989) National Law Journal 22. See also HS Wulff, “Two Ways to Achieve the Same goal: The Model Law on International Credit Transfers and the New UCC Article 4A in the National and International Contexts” (1990) 9 Wisconsin International Law Journal 69.
[17] Uniform Commercial Code [USA]; See also United States Electronic Funds Transfer Act 1978.
[18] A process that grants access to a local or remote computer system, a network or on-line information.
[19] The acronym for Personal Identification Number.
[20] Though it should be noted that the phrase is vague and does not expressly refer to fraud. Its ambit could therefore be far wider.
[21] A proposed draft contract for use in electronic contracting is annexed.
[22] Electronic Signature Act 1996 (Florida)
[23] Section 4
[24] Burnett v. Westminster Bank Limited [1966] 1 QB 742; [1965] 3 All ER 81; see also R. Cranston “Cross Border Banking” (1988) 62 ALJ 158; Joachimson v. Swiss Bank Corporation [1921] 3 KB 110; [1921] All ER 92; R v. Davenport [1954] 1 WLR 569; [1954] 1 All ER 602.
[25] See the comments by Fein ML “Regulating Cyberspace” (1995)Bank Management 10 where he discusses a 1990 situation where a court concluded that the Uniform Commercial Code did not cover an erroneous electronic transaction. One of the reasons was that the electronic funds transfers were not within the contemplation of the draftsperson.
[26] This Code of Conduct provides for clear and unambiguous terms of use to be provided to card holders; that changes in fee structures be notified; that a receipt be issued; that periodic statements be provided; that the cardholder’s liability be limited, that records are treated in confidence and that investigation and resolution procedures be adopted for complaints.
[27] M. Sneddon “A Review of the Electronic Funds Transfer Code of Conduct” (1995) JBFL 32.
[28] M. Sneddon, ibid at p. 32,
[29] It should be noted that the Code does not have force of law, it being voluntary adopted by electronic funds transfer providers. See the comments by S. Blay and E. Clark, Australian Law of Financial Institutions, 2nd edn., Harcourt Brace, 1996 at p. 336.
[30] There is no specific legislation in Australia governing the relationship between the financial institution and the users of electronic funds transfers. Contrast the United States of America, Electronic Funds Transfer Act 1978 and in Denmark, Payment Cards Act 1984.
[31] Consider the potential for Internet banking. At the present time International Commercial Funds Transfers on a daily basis between nations exceeds $1 trillion. See S. Blay and E. Clark, Australian Law of Financial Institutions, 2nd edn, Harcourt Brace, 1996 at p. 349.
[32] R. Cranston, “Cross Border Banking “ (1988) 62 ALJ 158.
[33] R. Cranston, ibid at p. 159.
[34] XAG v. A. Bank [1983] 2 All ER 464; MacKinnon v. Jeanette Securities Corp. [1986] Ch 482.
[35] R. Cranston, ibid at p. 159.
[36] A computer or software that provides resources such as files or other information, to client software running on other computers.
[37] P. Bartlett, “Internet - the legal tangle” (1995) 11 Computer Law and Practice 112.
[38] One definition is the use of information infrastructure through which business can speed the exchange of information, improve customer service, reduce operating costs, and increase global competitiveness.
[39] A digital signature is an electronic protocol that uniquely identifies a person or institution transmitting an electronic message. Companies such as VeriSign and others are now introducing ` digital certificates' which will enable users of Internet banking services to verify the identities of those with whom they wish to deal with. Therefore with the increasing widespread adoption of digital networks, current requirements for written signature or written authorisation under many statutes make little sense. Another possibility is digital encryption which is an electronic encoding protocol to provide security for electronic documents. It involves the scrambling or encoding of information to prevent anyone other than the intended recipient from reading the information. There are many types of encryption, and they are the basis of network security. Other variations of security systems include signature dynamics verification. This is an electronic record of the biometric features of the act of signature such as finger pressure, elapsed time and speed of signing. Finger print, palm print reading may also be possibilities at some point in the future. See the comments by See S. Blay and E. Clark, Australian Law of Financial Institutions, 2nd edn, Harcourt Brace, 1996 at p. 360.
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/journals/JlLawInfoSci/1996/16.html