1. GasEDI ENFORCEABILITY OF ELECTRONIC CONTRACTS Natural Resources Committee Calgary Chamber of Commerce October 19, 1999

2. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce2 OUTLINE +GasEDI. +Issue: Uncertainty. +Objective: Legislation. 6Proposed Uniform Electronic Commerce Act (UECA). +Current situation. +GasEDI’s Proposed Strategy. +Further Information. +Questions.

3. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce3 GasEDI +Sponsored by CAPP, SEPAC, CGA, CEPA. +Mission: 6Promote the development and implementation of North American business and electronic information standards to improve the competitive position of natural gas. !We believe all participants in the gas industry - including end use consumers - are best served by a vibrant, efficient, industry - from well head to burner tip.

4. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce4 GasEDI’S ENFORCEABILITY OF ELECTRONIC CONTRACTS WORKING GROUP +Mission: 6Develop standards for enforceable electronic contracting for use by the Canadian gas industry. !These standards are to be compatible with GISB ((US) Gas Industry Standards Board) standards, and/or lead to requests for modifications to GISB standards. !Review legislation and monitor legislative proposals to assure the requirements of the Canadian gas industry are satisfied. !Monitor establishment of Certification Authorities.

5. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce5 ISSUE: UNCERTAINTY +There is sufficient uncertainty regarding the enforceability of an electronic contract that commerce in Alberta may be significantly adversely affected.

6. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce6 OBJECTIVE: LEGISLATION +The Alberta Advantage can be further enhanced by creating a legal environment in which electronic commerce can be carried out with ease and certainty.

7. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce7 PROPOSED UNIFORM ELECTRONIC COMMERCE ACT (UECA) +The Uniform Law Conference of Canada (ULCC) has adopted a Uniform Electronic Commerce Act and has recommended it for enactment in all provincial legislations / jurisdictions. 6Purpose: Reduce legal risk for doing e-business across the country by eliminating uncertainty about the law that applies and by making the law suit the needs of modern commerce. 6Application: Beyond the scope of commerce to almost any legal relationship that may require documentation.

8. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce8 SALE OF GOODS ACT +“A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.” 6United Nations Convention on Contracts for the International Sale of Goods. 6This Convention has been adopted by Canada’s federal government and several provinces, including Alberta.

9. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce9 STATUTE OF FRAUDS +The Statute requires a “note or memorandum” of the contract “signed by the party to be charged” or the party’s authorized agent. 6The memorandum must contain all the essential terms of the contract, including the identity of the parties. 6There is a strong argument that the note or memorandum need not necessarily be on paper, but the information must be accessible so as to be useable for subsequent reference.

10. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce10 EVIDENCE ACT +Information should not be denied legal effect or enforceability solely by reason that it is in electronic form. 6A digitally signed document should be given equal weight to a manually signed document as evidence. 6If both a hardcopy and electronic version of a document are executed both should be kept.

11. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce11 INTERPRETATION ACT +A legal contract should be interpreted to be in writing provided the information is accessible so as to be useable for subsequent reference. 6The law has endeavoured to take cognizance of, and to be receptive to, technological advances in the means of communication: !Teletype. !Fax.

12. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce12 CANADA BILL C-54 +Restricted (mostly) to communications with the Canada’s federal government. 6Will only apply to to situations specified in a schedule (opt in statute). +This bill also covers privacy issues.

13. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce13 CANADIAN DEPARTMENT OF JUSTICE +Section 35 of the Interpretation Act defines writing as follows: “writing”, or any term of like import, includes words printed, typewritten, painted, engraved, lithographed, photographed or represented or reproduced by any mode of representing or reproducing words in visible form. 6For most electronic documents, this definition will be sufficient because they will be in “visible form”, either by representation on a computer screen or as a print- out.

14. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce14 ELECTRONIC COMMERCE TRADING PARTNER AGREEMENT +Prior to passage of appropriate legislation, electronic transactions will likely be enforceable provided they are preceded by a paper-based Electronic Commerce Trading Partner Agreement. 6An Electronic Commerce Trading Partner Agreement should address the issues of enforceability, authenticity and integrity of the electronic transaction.

15. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce15 ALBERTA ENERGY AND UTILITIES BOARD (AEUB) +Electronic filing is being adopted.

16. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce16 NATIONAL ENERGY BOARD (NEB) +The NEB Act does reference documents being in writing and having a signature. 6Nevertheless the NEB is moving to mandatory electronic filings for the fall of 2000 and is working on changing systems from paper to electronic to support this.

17. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce17 ONTARIO ENERGY BOARD (OEB) +The OEB is cooperating with the NEB in developing electronic filing standards.

18. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce18 GasEDI’S PROPOSED STRATEGY +Position to be endorsed by CAPP, put on CAPP letterhead, and forwarded by CAPP to the appropriate government personnel. +Other organizations would support the CAPP / GasEDI position by forwarding a copy of the CAPP / GasEDI position to the appropriate government personnel. 6To emphasize consistency, such other organizations would, preferably, not transcribe the CAPP / GasEDI position statement onto their own letterheads.

19. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce19 DISCLAIMER +Information is published by GasEDI as a service - such information should not be considered a comprehensive treatment of any subject. 6Comments published by GasEDI reflect the views of individual authors and are not intended to provide legal advice. 6Readers should not act or rely on information provided by GasEDI without seeking specific legal advice.

20. GasEDI 1999/10/19Calgary Chamber of Commerce - Electronic Commerce20 FURTHER INFORMATION +Contact: 6Ian Anderson !Project Manager !GasEDI !Tel:403-243-1079 !Fax:403-243-0546 !Cell:403-860-5941 !Web:http://www.gasedi.cahttp://www.gasedi.ca !Email:ian@isanderson.comian@isanderson.com

21. GasEDI ENFORCEABILITY OF ELECTRONIC CONTRACTS Ian Anderson I. S. Anderson & Associates Limited Business Reengineering Electronic Commerce EDI 100 - 1039 - 17 Avenue SW, Calgary, Alberta, Canada T2T 0B2 Tel: 403-243-1079 Fax: 403-243-0546 http://www.isanderson.comhttp://www.isanderson.com Cell: 403-860-5941 Email: ian@isanderson.comian@isanderson.com