Monday, October 27, 2014

How does Electronics Transactions Law impact Electronic Transactions in Oman?

Oman’s Electronic Transactions Law (promulgated by RD 69/08, as amended) (the “ETL”) governs electronic contractual agreements. The ETL shall apply to parties who agree to conduct their transactions electronically. Such consent by the parties is inferred from their conduct. Electronic transactions are contractual agreements that are “entered into or executed totally or partially through electronic records.”

This article briefly covers the fundamental principles of the ETL and how it may affect any contractual agreement entered into electronically.

Application of the ETL

In simple terms, the ETL has a wide application, applying to electronic transactions, records, signatures and to any electronic message. Article 4 provides a more detailed description asserting the following:

  1. transactions performed between parties who have agreed to perform their transactions electronically;
  2. parties involved in composing, forwarding, receiving, saving or transacting electronic records may agree on an alternative mode of performing transactions; and
  3. parties who have managed a specific electronic transaction are not obligated to consider the same type of transaction for any further dealings.

It is worth highlighting that for the first point above, except for government transactions, whether a party is considered to have given consent or not, is deduced from their conduct. In contrast, the government’s express consent for performing transactions electronically is required.

Electronic Transactions

Provided that the provisions of the ETL have been complied with the principles of offer and acceptance may be communicated by electronic messages and are thus binding on all parties to the electronic transaction. This position is reiterated by the Law of Commerce which accounts for situations where no contract exists or if it does exist but is silent with respect to a provision. Put simply, there is no legal requirement to have a written contract as an electronic contract shall produce the same legal effect as a written contract. As a result an electronic contract has the same enforceability as a written document where it is deemed to form an original version of a contract. However, the ETL makes clear that electronic information must be supported by a reliable guarantee that the display of electronic information is presented in a clear way and that there must be evidential weight as to whether or not an electronic message is in its original form. The reliability of the manner in which an electronic message is performed, entered into, generated, processed or stored are all factors that are taken into consideration when assessing whether a reliable assurance was made.

Storing of Electronic Records

The ETL provides that when any law stipulates that a document, record, information or data is to be saved for any reason, then it should be retained subject to compliance with the following:

  1. saving shall be effected electronically in the same manner as it was initially composed, dispatched or received. It may also be saved in a different manner as long as it can be proved that it accurately represents the original document;
  2. saved in an accessible manner that allows it to be retrieved for subsequent reference; and
  3. saved to permit identification of its origin and destination of the electronic message.

It is clear from the foregoing provisions above that electronic transactions are deemed true and enforceable in the same way that a written contract is enforceable. However, as this article has highlighted, the ETL provides certain criteria that must be complied with in order to enter into such transactions. Therefore, where the ETL is to govern a contractual agreement, the terms of such proposed electronic transaction should reflect the provisions of the ETL before a contract is entered into.