The DIFC is aiming to soon enact New Electronics Transactions Law with the objective of facilitating various electronic transactions, to eliminate barriers thereto which are cause of uncertainties over writing and signature requirements, and further for promotion of development of the legal and business infrastructure required for implementation of secure electronic transactions in DIFC and last but not least helping establishment of uniformity of rules, regulations and standards in relation to authentication and integrity of electronic records in DIFC. Below is a brief synopsis of the proposed “Electronic Transactions Law, DIFC Law No. 2 of 2016:
Electronic Contracts
In the said law DIFC provides that, such electronic records shall be acceptable as enforceable contract and be used in proceeding before court as evidence. Further law provides that an offer and the acceptance of an offer may be expressed by means of Electronic Communications for the formation of a valid contract.
And thus, the contract shall not be denied validity or enforceability solely because an Electronic Communication was used during the process. When a proposal to enter, a contract is made through electronic communication addressed to more than one specific party, also a proposal that makes use of interactive application for placement of order by use of the information system – is considered an invitation to make offers and indicates that the party to be bound in case of acceptance.
When a contract is formed because of the interaction of natural persons and automated message system is considered valid and enforceable.
The time and place of dispatch of electronic communication:
- Time when it leaves an information system under the control of the originator
- In another case the time when the electronic communication is received.
The time and place of dispatch of electronic communication:
- When it becomes capable of being retrieved by the addressee at an address designated by the addressee.
- capable of being retrieved by the Addressee and he becomes aware that the Electronic Communication has been sent the address as requested.
Electronic Signatures
Legal recognition to the electronic signature has been given where DIFC law requires signature of any person, or provides for consequence if the document or record is not signed. Also, it has been clarified that an electronic signature is deemed to identify the relevant person and the person’s intention of been satisfied in respect of the data in the electronic records.
Also, the electronic signature is admissible as evidence in court as an evidence and considered as valid.
Electronic Records & Retention
All electronic records have been given legal recognition for validity and enforceability. The electronic record shall certify the DIFC law for requirement to be written or in writing and if it preserves a record of the information contained the same can be reproduced in tangible form.
Where the parties have agreed to conduct a transaction by Electronic means and a party is required to send or deliver information in writing to the other party – the requirement is satisfied if the information is provided or sent in an electronic communication capable of retention by the Addressee at the time of receipt and reproducible in tangible Form.
The Electronic Record preserves a record of the Information contained therein along with the capability to reproduce the same in tangible form. And it must be retained in the format in which it is originally created. For example, if DIFC law requires the retention of a cheque, the requirement for retention is fulfilled, if Electronic Record of the information on the front and back of the cheque is maintained.
Conclusion
The new law does not provide or prescribes for penalty at the same time it should be noted that the DIFC Electronic Transactions Law excludes the use of electronic records, electronic contracts and electronic signatures in reference to all types of powers of attorney, wills and trusts, affidavits or affirmations including the sale, purchase or long term lease of real property.
