The Digital Signature and Contract
- Kuwait law regulates the applications of the electronic signature through the acknowledgment of its validity and applicability in law and practice. Therefore, the electronic signature is expected to meet set Firstly, the digital signature is expected to be identifiable and exclusively linkable to a signatory. Secondly, the law projects that during the implementation of the signature, especially when utilizing a sage signature tool, it shall be exclusively under the control of the signatory him/herself at the time of signing. Thirdly, to ensure the effective regulation, the law obligates the individual who utilizes the protected electronic signature to submit the digital authentication certificate to the authorities. The electronic certificate should signify the validity of the signature and conditions or limitations imposed on its usage if any. According to Enriques, “the common law approves the use of signatures as evidence that a party agrees with a transaction within the content of the documents on which the signature is applied to.”[1] Although the majority of digital documents and signatures are being utilized to seal business deals, the acknowledgment of digital signatures and their verifiability in law has been a subject of legal challenges with many businesses losing considerable resources and significant business due to the limitation of legal support for both e-signature and e-contracts.
- The current digital society is defined through the technological breakthrough that manages business beyond the constraints of geographical boundaries, distance, and time. Firms within the digital platform employ software or computer networks to manage discussion and agreements that facilitate their trading.[2] An e-contract is a business agreement that is modeled, accomplished, and deployed using a computer or software platform. Electronic contracts have become a necessity in the digital economy where the barriers of distance and time have been reduced to allow businesses to develop through the utilization of digital instruments. Electronic documents are developed with several online users click buttons, such as “I agree,” scanning, and pasting a person’s real signature or signing through the use of one’s full name or initials.[3] The contract is developed using electronic data away from the traditional paper systems and saved using an appropriate medium.
- The law recognizes e-contracts through the settlement of an offer and an acceptance notification. The perspectives differ based on the context of the business model. However, Polanski avers that when consumers fill online forms build by trader’s e-commerce portals, an offer is made, which is based on labeled recognition .[4] In reference to the offer provided, Kumar and Pansari demonstrate that a seller has the benefit of responding to the acceptance through a confirmatory mail with respect to the customer for the benefit of their business or by conduct. Thus, the law appreciates the individual contracts entered upon without prejudice to all the parties involved.
The acceptance of an electronic contract requires confirmation and approvals through various documentation. Yuthayotin explains that an unequivocal and unconditional communication of acceptance is one of the primary expectation to be made during the approval of an e-contract.[5] Another significant aspect of contract acceptance is that all parties to the agreement are expected to understand the terms, conditions, and obligations of the contract in order to execute the rights and responsibilities under which they sign to commit. The acceptance of the contract is deemed to have been executed when the attention of the person offering is drawn to it. Therefore, a contract is accepted and approved when the parties to it have provided consent to all the provisions expressly provided for in the law.
- The global virtual market is increasingly becoming the platform for modern-day businesses. The internet is fast becoming the world’s preferred platform for conducting business transactions. Accordingly, companies are taking advantage of the increased traffic on the internet to access potential customers for their enterprises.[6] However, consumer protection for the e-contract has remained a challenge in several businesses, often leading to losses to online buyers. Agnihotri, Dingus, Hu, and Krush aver that law statute that ensures the consumer is safeguarded from exploitative traders are significance to keep the trust in the business environments.[7]Accordingly, it is worth noting that consumers should be protected from substandard goods, false electronic marketing or advertisement, and misleading prices carried in several contracts signed between the customers and the traders. Surprisingly, the deceptive and insufficient information limits the decision on which a customer relies on to execute the contract or make purchases on an online platform. Therefore, it is significant that consumers are legally protected from such limitations that may lead to substantial losses.
Kuwait statutes of the law acknowledge the e-consumer platform and establish their protection systems in e-contract from undue exploitation. The principal level of protection emanates from the fact that the law should protect individuals who may not wish to engage in e-commerce. Kuwait’s constitution establishes a legal framework on which it acknowledges the operations and activities of the e-platform and enacted articles that ensure consumer protection. Firstly, article four elucidates that “no person is obliged to accept dealing through electronic means without his consent.” [8] In its application, the statute brings to attention that an individual consent to engage in e-contract shall be sought, while the understanding of that person illustrated before the transactions commence.
- The Kuwaiti electronic transactional law is divided into eight chapters and a final section that carries explanatory memorandums. The first chapter entails flexible definitions of technical terms and the significance of the law that accommodate modern technologies. Notably, the second chapter offers the general provisions of the law as it defines the scope of its application. The chapter also handles significant areas covered by the statutes, which it generalizes as every transaction related to the electronic documents and signatures as applied to the electronic business platform. The two chapters are introductory as they lay an effective landscape on which the status of the law is developed and explained.
While the above chapters introduce the law, chapter three deals with physical and electronic documents as specific aspects of the law. The section illustrates that the electronic records and documentation can be acknowledged without the presence of a physical individual. Accordingly, the section highlights models of how electronic documents can be generated, saved, or sent to a desired destination by the executing parties. The contract between the parties making settlements on the digital platform are often sealed without appending a physical signature on any document as has been the traditional practice in business, and hence, leading to digital documentation. The conditions laid out in the chapter supports the applications of the law through the guidelines indicated for implementation by entities engaging in electronic transactions.
The Kuwaiti electronic transaction law acknowledges the electronic signature. In the provisions of chapter four, the law explains the protection of the electronic signature in the domain of every administrative, civil, and commercial transaction. The law provides that e-signature hold the same recognition in law as a physically signed document.[9] The chapter provides for the conditions that electronic signatures can be protected based on a set of benchmarks that are met by the person involved in e-commerce and payments. Likewise, the chapter provides advice and technical support to the issuer of the signature as precautionary measures for accuracy and authenticity of the application of the signature. Therefore, the law expressly provides guides and illustration to support e-commerce and the application of e-signature for official documentation or payment purposes.
Chapter five of the electronic transaction law explains the application of electronic documents and signatures for any transaction. The chapter appreciates the government acceptance of electronic documents or reports as parts of its official documentation. Article 26 of chapter five illustrates the government recognition of e-payment systems and a tendering and acceptance systems that benefit all global entrepreneurs.[10] The chapter stipulates model in which the electronic commerce or transaction will involve the government through its departments and the precautionary measures established upon application of the systems on behalf of the government. In essence, the statute provides legal application of the electronic transactions within government offices both within and to other third-party traders.
The chapter six of the statute focuses on the electronic payment. The law acknowledges money transfer on an electronic platform as an acceptable method of settling payments. In particular, the statute provides a roadmap for banking institutions to adhere to during the execution of an e-payment system. Equally, the law acknowledges the central bank of Kuwait as the regulator within the banking sector and provides specific guidance on areas of money laundering and counter-terrorism financing. The statute protects customers who notify financial institutions about possible infringement to their e-signature before such fraudulent transactions occur in their accounts. Given these perspectives, the article provides possible applicable fines and penalties that may accrue to an individual or institution which violate the provision of the law.
In addition to the above protection mechanism, chapter seven of the law guides on the privacy and data protection systems. The statute limits the unauthorized applications or disclosure of data within the electronic processing systems. The data that may contain personal information like health statuses or other forms of financial disclosures of individuals are prohibited from publishing without providing reasonable and legal consent. However, the article advises on models that can be used to access such information and their use in so far as the use is restricted to the purposes within which it was sought. Accordingly, the law sets out controls and measures to be followed during the application and use of the data accessed in a way that enables their protection and safeguards from possible abuse.
Notwithstanding the protections offered above, chapter eight illustrates penalties that may accrue to offenders who violate the provision of the transaction law. According to the electronic transaction law, article 37 of the chapter, reinforces a penalty of imprisonment for a duration of three years as a minimum and no less than five thousand dinars or not exceeding 20 thousand dinars to the lawbreakers.[11] The chapter outlines the general grounds for which an individual can be charged or declared guilty of crimes in the electronic transaction sector, and hence, be liable for prosecution. Among the conditions includes those individuals who knowingly utilizes a false or defective e-signature or signature tool, documents or records for purposes of benefiting or defrauding an entity. The chapter summarizes how the law shall manage communication by creating public awareness of offenders through newspaper adverts paid by the offenders and printed in the Arabic language.
The final section of the law carries explanatory memorandum concerning the electronic transactions. The section guides on specific regulation of the law and the significance in the context of electronic contracts. The section also summarizes the provisions within the chapters to aid in easier understanding and interpretation. Therefore, it is significant since it projects a simplified version of all chapters of the law.
- Personal data refers to information about an entity, which are utilized during electronic transactions. Personal data are significant since they provide the legitimacy of a transaction in an e-contract.[12] The personal data fall among required disclosures for completing electronic transactions, such as credit card information and other payment systems. The law regulates personal data and e-signature by limiting the unauthorized applications or disclosure of such data for electronic processing. Given that the data contain personal information, such as financial position of business entities, the law has strict checks on their use and accessibility and applies heavy fines for their exploitation. Therefore, the law sets out controls to be followed during the application and use of personal data and e-signature accessed in a way which enables their protection and safeguarding from possible abuse.
- The central bank of Kuwait regulates the electronic payment platform through the applications of the law No. 32 of 1968 and No. 105 of 2013. The statutes acknowledge the central bank’s role of coordination in the banking profession and the advice regarding counter-terrorism financing and anti-money laundering. According to law No 20 on electronic transactions, the provision of article 31 gives the central bank the authority to advise financial institution regarding the adoption of the electronic payment systems.[13] On the other hand, Ou, Tsai, and Kaiser aver that an electronic signature communicates the integrity of the contract between parties since it stipulates a level of admissibility and reliability of the parties in any legal setup, including courts.[14] Therefore, when enforcing electronic signatures, it is significant that the two parties involved in the transactions consent to its applicability, and based on their legal jurisdiction, understand the binding obligations as per the provisions of the law. Through the notices to the banking sector, the central bank of Kuwait regulates the industry in providing procedures for error corrections, consequences of operational errors and advice for the disclosure of data. On the other hand, the regulation obliges banking institutions to avail relevant information and operational data from the electronic payment system through reports to the regulator.
Reference List
Agnihotri, R., Dingus, R., Hu, M.Y. and Krush, M.T., 2016, ‘Social media: Influencing customer satisfaction in B2B sales’, Industrial Marketing Management, vol. 53, pp.172-180.
Amin, N. and Nor, R.M., 2013, ‘Online shopping in Malaysia: Legal Protection for E-consumers’, European Journal of Business and Management, vol, 5, pp.79-86.
Enriques, L., 2015, ‘Related party transactions: policy options and real-world challenges (with a critique of the European Commission proposal)’, European Business Organization Law Review, vol. 16, no. 1, pp.1-37.
Kumar, V. and Pansari, A., 2016, ‘Competitive advantage through engagement’, Journal of Marketing Research, vol. 53, no. 4, pp. 497-514.
Ou, P.H., Tsai, A. and Kaiser, N., 2016. The e-signature in Taiwan: consent, integrity and accessibility. Digital Evidence & Elec. Signature L. Rev., vol. 13, p.148.
Polanski, P.P., 2015, ‘Towards the single digital market for e-identification and trust services’, Computer Law & Security Review, vol. 31, no. 6, pp. 773-781.
The constitution of Kuwait, 1962, ‘Law No. 20 of 2014 Concerning Electronic Transactions,’ pp. 1-32.
Yuthayotin, S., 2015, ‘Substantive mechanisms for achieving access to Justice. In Access to justice in transnational B2C e-Commerce (pp. 107-175). Springer, Cham.
[1] Enriques, L., 2015, ‘Related party transactions: policy options and real-world challenges (with a critique of the European Commission proposal)’, European Business Organization Law Review, vol. 16, no. 1, p. 25.
[2] Amin, N. and Nor, R.M., 2013, ‘Online shopping in Malaysia: Legal Protection for E-consumers’, European Journal of Business and Management, vol, 5, p. 801.
[3] Ibid., 801.
[4] Polanski, P.P., 2015, ‘Towards the single digital market for e-identification and trust services’, Computer Law & Security Review, vol. 31, no. 6, pp. 773-781.
[5] Yuthayotin, S., 2015, ‘Substantive mechanisms for achieving access to Justice. In Access to justice in transnational B2C e-Commerce (p. 107). Springer, Cham.
[6] Ibid., 110.
[7] Agnihotri, R., Dingus, R., Hu, M.Y. and Krush, M.T., 2016, ‘Social media: Influencing customer satisfaction in B2B sales’, Industrial Marketing Management, vol. 53, pp.172-180.
[8] The constitution of Kuwait, 1962, ‘Law No. 20 of 2014 Concerning Electronic Transactions,’ p. 16.
[9] Ibid., 19.
[10] Ibid., 18.
[11] The constitution of Kuwait, 1962, ‘Law No. 20 of 2014 Concerning Electronic Transactions,’ p. 25
[12] Amin, N. and Nor, R.M., 2013, ‘Online shopping in Malaysia: Legal Protection for E-consumers’, European Journal of Business and Management, vol, 5, pp.79-86.
[13] The constitution of Kuwait, 1962, ‘Law No. 20 of 2014 Concerning Electronic Transactions,’ p. 20.
[14] Ou, P.H., Tsai, A. and Kaiser, N., 2016. The e-signature in Taiwan: consent, integrity and accessibility. Digital Evidence & Elec. Signature L. Rev., vol. 13, p.148.
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