Electronic Commercial

Law
Code: 333

Dr Tariq Alawneh
 Unit One
Introduction
Electronic Contracts
 Electronic Commerce
• Definition:

• E-Commerce is defined broadly as any business transaction that

occurs over, or is enabled by, the Internet.
 The Seven Unique Features Of E-commerce Technology
1. Ubiquity:
- E-commerce, in contrast, is characterized by its ubiquity: it is available just about everywhere, at all times.
- The result is called a marketspace which means a marketplace extended beyond traditional boundaries
and removed from a temporal and geographic location.
2. Global reach:
- E-commerce technology permits commercial transactions to cross cultural and national boundaries far
more conveniently and cost-effectively than is true in traditional commerce.
3. Universal Standards:
- operates according to universal standards shared by all nations around the world. In contrast, most
traditional commerce technologies differ from one nation to the next.
- users of the Internet, both businesses and individuals, experience network externalities which means the
benefits that arise because everyone uses the same technology.
- With e-commerce technologies, it is possible for the first time in history to easily find many of the
suppliers, prices, and delivery terms of a specific product anywhere in the world, and to view them in a
coherent, comparative environment.
 The Seven Unique Features Of E-commerce Technology
4. Richness:
- provides information richness, which refers to the complexity and content of a message. It enables an online merchant to
deliver marketing messages with text, video, and audio to an audience of millions, in a way not possible with traditional
commerce technologies such as radio, television, or magazines.
5. Interactivity:
- E-commerce technology allows for two-way communication between merchant and consumer and enables the merchant
to engage a consumer in ways similar to a face-to-face experience, but on a much more massive, global scale.
6. Information Density:
- increases information density (the total amount and quality of information available to all market participants). The
Internet reduces information collection, storage, processing, and communication costs while increasing the currency,
accuracy, and timeliness of information.
7. Personalization/Customization:
- permits personalization and customization. Merchants can target their marketing messages to specific individuals by
adjusting the message to a person’s name, interests, and past purchases. Because of the increase in information density, a
great deal of information about the consumer’s past purchases and behavior can be stored and used by online merchants.
The result is a level of personalization and customization unthinkable with existing commerce technologies.
E-Commerce also provides the following features:

• Non-Cash Payment: E-Commerce enables the use of credit cards, debit

cards, smart cards, electronic fund transfer via bank's website, and
other modes of electronics payment.

• 24x7 Service availability: E-commerce automates the business of

enterprises and the way they provide services to their customers. It is
available anytime, anywhere.

• Advertising/Marketing: E-commerce increases the reach of advertising

of products and services of businesses. It helps in better marketing
management of products/services.
E-Commerce also provides the following features:

• Improved Sales: Using e-commerce, orders for the products can be

generated anytime, anywhere without any human intervention. It gives a
big boost to existing sales volumes.

• Support: E-commerce provides various ways to provide pre-sales and

post-sales assistance to provide better services to customers.

• Communication improvement: E-commerce provides ways for faster,

efficient, reliable communication with customers and partners.
 Advantages to Organizations

• Using e-commerce, organizations can expand their market to national

and international markets with minimum capital investment.

• E-commerce helps organizations to reduce the cost to create process,

distribute, retrieve and manage the paper based information by
digitizing the information.

• E-commerce improves the brand image of the company.

 Advantages to Organizations

• E-commerce helps organizations to provide better customer service.

• E-commerce helps to simplify the business processes and makes them

faster and efficient.

• E-commerce reduces the paper work.

 Advantages to Customers

• It provides 24x7 support. Customers can enquire about a product or

service and place orders anytime, anywhere from any location.

• E-commerce application provides users with more options and

quicker delivery of products.

• E-commerce application provides users with more options to compare

and select the cheaper and better options.
 Advantages to Customers

• A customer can put review comments about a product and can see what
others are buying, or see the review comments of other customers before
making a final purchase.

• E-Commerce increases the competition among organizations and as a

result, organizations provides substantial discounts to customers.

• Customers need not travel to shop a product, thus less traffic on road and
low air pollution.
• E-commerce helps in reducing the cost of products, so less affluent
people can also afford the products.
 The Seven Unique Features Of E-
commerce Technology
The Feature:
1. Ubiquity: Internet/Web
technology is available
everywhere: at work, at home, and
elsewhere via mobile devices,
anytime.
Business Signifigence:
• The marketplace is extended
beyond traditional boundaries and
is removed from a temporal and
geographic location.
“Marketspace” is created;
shopping can take place
anywhere. Customer
convenience is enhanced, and
shopping costs are reduced.
 Con. Seven Unique Features Of E-
commerce Technology
The Feature:
2. Global reach: The technology
reaches across national
boundaries, around the earth.
Business Significance:
• Commerce is enabled across
cultural and national boundaries
seamlessly and without
modification. “Marketspace”
includes potentially billions of
consumers and millions of
businesses worldwide.
 Con. Seven Unique Features Of E-
commerce Technology
The Feature: Business Significance:
3. Universal standards: There is • There is one set of technical
one set of technology standards, media standards across the
namely Internet standards. globe.
 Con. Seven Unique Features Of E-
commerce Technology
The Feature: Business Significance:
4. Richness: Video, audio, and text • Video, audio, and text marketing
messages are possible. messages are integrated into a
single marketing message and
consuming experience.
 Con. Seven Unique Features Of E-
commerce Technology
The Feature: Business Significance:
5. Interactivity: The technology • Consumers are engaged in a
works through interaction with dialog that dynamically adjusts
the user. the experience to the individual,
and makes the consumer a co-
participant in the process of
delivering goods to the market.
 Con. Seven Unique Features Of E-
commerce Technology
The Feature: Business Significance:
6. Information density: The • Information processing, storage,
technology reduces information and communication costs drop
costs and raises quality. dramatically, while currency,
accuracy, and timeliness improve
greatly. Information becomes
plentiful, cheap, and accurate.
 Con. Seven Unique Features Of E-
commerce Technology
The Feature: Business Significance:
7. Personalization/Customization: • Personalization of marketing
The technology allows messages and customization of
personalized messages to be products and services are based
delivered to individuals as well as on individual characteristics.
groups.
 The five major types of e-commerce:
1. Business-to-Consumer (B2C) e-commerce: involves businesses selling to consumers and is the
type of e-commerce that most consumers are likely to encounter.
2. Business-to-Business (B2B) e-commerce: involves businesses selling to other businesses and is
the largest form of e-commerce.
3. Consumer-to-Consumer (C2C) e-commerce: is a means for consumers to sell to each other. In C2C
e-commerce, the consumer prepares the product for market, places the product for auction or sale,
and relies on the market maker to provide catalog, search engine, and transaction clearing
capabilities so that products can be easily displayed, discovered, and paid for.
4. Peer-to-Peer (P2P) E-commerce: technology enables Internet users to share files and computer
resources directly without having to go through a central Web server. Music and file-sharing services,
are prime examples of this type of e-commerce, because consumers can transfer files directly to
other consumers without a central server involved.
5. Mobile Commerce (M-commerce): involves the use of wireless digital devices to enable
transactions on the Web.
 Examples

• Amazon does business between business-to-business (B2B)
and business-to-consumer. 
• eBay is the most popular platform for enabling consumers to sell to
other consumers.
• Etsy is a marketplace for handmade products.
• Alibaba: shipping bulk cargo, specially for people who are looking for
a bulk cargo shipping companies from china.
 Electronic Commerce Law
Obstacles:
Electronic commerce raises a number of legal issues:

• The existing requirements in national and international law for the use of written
documents or manual signatures in international trade transactions are considered to
constitute major obstacles to the development of electronic commerce at global level.

• Questions and uncertainties concern the validity, legal effect and enforceability of
transactions conducted through electronic means, in a legal environment based on
paper.

• Difficulties in determing the applicable law, which court has jurisdiction etc.
 Contract law V. Electronic Commerce
• electronic contracting refers to the ability to form contracts via electronic means, free of
legal restrictions that would require paper records or hand-written signatures.
• Any agreement to make an online purchase or use an electronic commerce service requires
the formation of a contract.
• Contract law was initially developed around certain requirements for hard copy documents,
writing and in some cases witnessing.
• These concepts are not so useful when the transaction is to take place via electronic
communication between two parties who may never share the same physical location.
• For electronic commerce to take full advantage of the speed and convenience delivered by
new communication technology, full electronic contract formation must be possible.
• The most important international instruments are:
1. The United Nations Commission on International Trade Law (UNCITRAL) Model Law on
Electronic Commerce (MLEC) 1996.
2. The UNCITRAL Convention on the Use of Electronic Communications in International
Contracts (CUECIC) 2005.
 Contractual aspects of Electronic Commerce

• If someone wishes to enter into a contract over the Internet, the immediate question
they will ask is whether such an agreement reached ‘online’ is enforceable. To look to
the answer to this question, we must examine the well-established legal principles
which apply to traditional written contracts.

• E-commerce is generally about the making of contracts using the Internet. Online
contracts are no different to paper contracts, what is unique is the contracting process.
 Contract / E Contract

• A contract is an agreement between two or more parties to create

legal obligations between them.

• Electronic contract is an agreement created in electronic form—no

paper is used.

• Electronic contracts are used when both parties use the Internet as a

medium.
• E.g. Contracts concluded via email, whatsapp etc
 Contractual aspects of Electronic Commerce

For a contract to be valid several conditions must be satisfied:

• Offer

• Acceptance

• Consideration

• Intention to create legal relations

 Bilateral and Unilateral Contracts

• What is a bilateral contract?

• When most people think of contracts, bilateral agreements come to
mind. In its most basic form, a bilateral contract is an agreement
between at least two people or groups. Most business and personal
contracts fall into this category.

• Examples of bilateral contracts are present in everyday life. You're

entering this type of agreement every time you make a purchase at
your favorite store.
 Bilateral and Unilateral Contracts

• What is a unilateral contract?

• Carlill v. Carbolic Smoke Ball Co [1893] 1 QB 256

• In the case of a unilateral offer however as stated in the Carlill case

the an advertisement would amount to an offer not an invitation to
treat since the advert is not an offer to negotiate but a statement of
an intention to be bound if the condition is met.
 Bilateral and Unilateral Contracts

• What is a unilateral contract?

• Most offers are bilateral in the sense that an agreement does not
materialise until the offer is accepted, however it is possible to have
a unilateral offer where one party, the offeror, promises to pay for the act of
another. This is a conditional offer. Here the acceptance takes place when
the offeree performs the act in question.
• A common example of a unilateral contract is with insurance contracts. The
insurance company promises it will pay the insured person a specific amount
of money in case a certain event happens. If the event doesn't happen, the
company won't have to pay.
 Offer

• An offer is the clear indication of the party to be bound by the terms

of the offer. This can be communicated in a number of ways, including
by electronic communications.

• The offeror is the person who makes an offer

• The offeree is the person who receives an offer

 Invitation to Treat:
UK Contract Law Examples
• Auctions are sometimes invitations to treat which allows the seller to
accept bids and choose which to accept.

• Tenders are generally invitation to treat.

• Advertisements also are usually invitations to treat.

• Displaying goods on the supermarket shelves as well as displaying

goods on online shops(with a price tag) are usually invitation to treat
 Offer VS Invitation to Treat:

• An offer is the clear indication of the party to be bound by the terms

of the offer. This can be communicated in a number of ways, including
by electronic communications. An invitation to treat offers is not
intended to be legally binding but unfortunately might be construed
by the customer as such.

• Hence, the cyber-trader will need to ensure that his or her online
communications are set out and framed in such a way so as not to
cause uncertainty. He or she must also ensure that the
communications are not construed as unilateral offers: Carlill v.
Carbolic Smoke Ball Co [1893] 1 QB 256.
 Offer VS Invitation to Treat:

• It is necessary to distinguish an offer from what the law classifies as

an invitation to treat. The intention of the parties is important. The
law has laid down various general rules covering standard commercial
situations such as display of goods in a shop – Fisher v. Bell [1961] 1
QB 394, Pharmaceutical Society of G.B. v. Boots [1953] 1 QB 401 and
advertisements of goods and services for sale – Partridge v.
Crittenden [1968] 2 All ER 421.
 Invitation to Treat:
Fisher v Bell [1961] 1 QB 394
• Fisher v Bell [1961] 1 QB 394 is an English contract law case concerning
the requirements of offer and acceptance in the formation of a contract.
The case established that, where goods are displayed in a shop together
with a price label, such display is treated as an invitation to treat by the
seller, and not an offer.

• The defendant displayed a flick knife in the window of his shop next to a
ticket bearing the words Ejector knife – 4s, (i.e. four shillings).

• This was against section 1 of the Restriction of Offensive Weapons Act

1959.
 Invitation to Treat:
Fisher v Bell [1961] 1 QB 394
• In late 1959, the claimant, a chief inspector of police, brought forward
information against the defendant alleging he contravened section 1(1)
by offering the flick knife for sale.

• At first instance, the Prosecutor submitted that the Defendant has

displayed the knife and ticket in the window with the objective of
attracting a buyer, and that this constituted an offer of sale sufficient to
create a criminal liability under section 1(1) of the Act.

• The judges at first instance found that displaying the knife was merely
an invitation to treat, not an offer, and thus no liability arose.
 Invitation to Treat:
Boots v Pharmaceutical Society of Great Britain 1953

• Facts Boots Chemists had changed the way their shops worked.

Shoppers could choose medicine off the shelves in the shop and then
pay for them at the till. (Before then, all medicines were stored
behind a counter and an assistant had to get what was requested.)
 Invitation to Treat:
Boots v Pharmaceutical Society of Great
Britain 1953

• The Pharmaceutical Society of Great Britain argued that under the

Pharmacy and Poisons Act 1933 a pharmacist needed to supervise
sales. The Society argued that displays of goods were an “offer” and
when a shopper selected and put the drugs into their shopping basket
that was an “acceptance”. Therefore because no pharmacist had
supervised the transaction at this point, Boots was in breach of the
Act.
 Invitation to Treat:
Boots v Pharmaceutical Society of Great
Britain 1953

• Judgment There was no binding contract. They held that the display

of goods was an invitation to treat. The customer made an offer by
placing the goods into the basket, and this offer could be either
accepted or rejected by the pharmacist at the cash desk. Therefore
Boots did not breach the act.
Invitation to treat (Kuwait)

• Advertisements also are usually invitations to treat.

• Displaying goods: Article 40 Kuwaiti Civil Code states that displaying

goods (with a price tag) is an offer.

• Unlike the UK contract law, displaying goods in a shop window or in

an online shop (with a price tag) is an offer. It is not an invitation to
make an offer.
 Withdrawing an offer:

• Generally, an offer can be withdrawn before a valid acceptance is made.

An offer can also be terminated by a counteroffer (see Hyde v. Wrench
[1840] 3 Beav. 334). In Hyde, the defendant’s offer to sell his farm for
£1,000 was in-effect rescinded by the claimant’s counter-offer at a lower
price.

• Consider also the problem with battle of the forms (see Butler Machine
Tool v. Ex-Cell-O Co [1979] 1 All ER 965). In Butler, the buyer accepted
the offer of the seller but substituted its own terms and conditions for
those furnished by the seller. Where the seller had accepted the
differing terms, it was bound by such terms and not the original offer.
 Acceptance:

• Acceptance has to be communicated in order to be effective.

Acceptance in online transactions has the potential to be extremely
controversial. Usually the acceptance is communicated to a machine
(the computer) or is made by a machine.

• The owner or person in control of the computer is bound by the legal

communications made by the computer if such communications had
been programmed into the computer by the owner or person in
control.
 Consideration

• Consideration:
Consideration is the value passing from the offerree to the offeror.
 Intention to be legally bound
• Balfour v Balfour [1919] 2 KB 571 a husband agreed to give his wife
£30 a month while he was away from home, but the court refused to
enforce the agreement when the husband stopped paying.

• In contrast, in Merritt v Merritt [1970] EWCA the court enforced an

agreement between a separated couple because the circumstances
suggested their agreement was intended to have legal consequences.
 Contract Terms

• Express terms: A term is incorporated into a contract when each party

knows of it or has been given reasonable notice at or before the time
when the contract is concluded.

• Implied terms: absence of expressed terms.

 Classification of contract terms:
(Common law) UK

• Conditions

• Warranties

• Intermediate or innominate terms:

 Classification of contract terms:
(Common law)
• Condition: a condition is a major term of the contract which goes to
the root of the contract. If a condition is breached the innocent party
is entitled to repudiate (end) the contract and/or claim damages.

• Warranty: Warranties are minor terms of a contract which are not

central to the existence of the contract. If a warranty is breached the
innocent party may claim damages but cannot cancel the contract.
 Classification of contract terms:
(Common law)

• Innominate/intermediate: The innominate term approach was

established in the case of Hong Kong Fir Shipping. Rather than
classifying the terms themselves as conditions or warranties, the
innominate term approach looks at the seriousness of the breach. The
innocent party will be entitled to cancel the contract if the breach was
so serious and deprived him/her from the whole benefit of the
contract. Otherwise the innocent party may only claim damage
(compensation).
 Contractual Remedies (in Kuwait):

• Repudiation: (The judge’s discretionary power)

• Specific Performance: (an order requiring a party to perform a

specific act, such to complete performance of the contract).

• Damage/Compensation:
 Unfair and Vague Terms
(Standard Terms)
• Standard terms: a contract prepared by one party without any
negotiation between the parties.

• Non-negotiated standard form contracts such as B2C electronic

contract where the contract terms are pre-drafted by one of the
parties to the contract (i.e. the retailer) and presented to the
counterpart (the consumer) without giving the latter the chance for
negotiation.
 Unfair and Vague Terms
(Standard Terms)
• Unfair Terms

• Acts such as Law No. 39 of 2014 on Consumer Protection seeks to

address the inequality of bargaining power between the two parties.

• Pursuant to Article 11, every clause in a contract or document related

to contracting with a consumer shall be invalid if it exempts the
merchant or service provider of any of his obligations under the
Consumer Protection Law.
 Unfair and Vague Terms
(Standard Terms)
• Wide and Vague Terms:

• The courts tend to apply the Contra Proferentem Rule: this means
that the court will interpret the term against the drafts man, i.e.
against the party who seeks to rely on the term (the online retailer).
 Offer and acceptance procedure online:

• The Electronic Commerce Regulations allow a seller to sell products

and services online as well as to accept payment for them by credit or
debit card while not actually entering into a contract on line. This is a
significant advantage for online retailers. By structuring the online
customer experience in such a way that the customer is making the
offer on the site and so that the contract will be formed once the
customer’s order is accepted, the seller has an advantage in that it
determines when acceptance occurs.
 Click-wrap contract

• The seller provides a platform on the World Wide Web to display goods
or services and all relevant details using an interactive website.

• Customers can browse the website and if they are interested in any
item they can click on for further details.

• After previewing all the information required regarding payment,

delivery, and terms of exchange or return, consumers finally place an
order by clicking on text which states ‘submit’, ‘I agree to the terms and
conditions’ or some similar expression.
 Click-wrap contract

• From a legal point of view, when the website owner displays this link
to the consumer, it clearly amounts to an invitation to make an offer.

• The issue of concern is with regards to mutual consent to the terms

and conditions of a contract since most click-wrap agreements are
non-negotiable and can enable the seller to impose unfair terms on
consumers by requiring them to click on a link to show acceptance to
long, detailed terms, without any negotiation.
Click-wrap contract
 Click-wrap contract

• We have all ordered goods and services online. As such, we are all
familiar with the online order procedure whereby a consumer
indicates the quantity of goods he or she wants and the delivery
details. Online retailers offer three choices when ordering online,
namely, ‘submit’, ‘clear’ and ‘cancel’.

• At the bottom of the page for terms and conditions, most online
retailers require the customer to scroll down and check a tick box at
the bottom of page to indicate that they have read, understood and
accepted the terms and conditions. This tick box must be filled before
the ‘accept’ button will work.
 Click-wrap contract

• While there is no obligation for the retailer to ensure that the customer has in
fact read the terms and conditions, a retailer’s position could be defended by
showing that steps have been taken to make customers aware of the terms
and conditions governing the transaction. The terms and conditions must be
in a format that can be printed or saved so they must be easily printable and
readable by all. A typical online ‘accept’ button contains language such as:
• By clicking the ‘Accept’ button you agree to these terms and conditions.
• By completing and submitting the following electronic order form you are
making an offer to purchase goods which, if accepted by us, will result in a
binding contract.
• Once a customer clicks ‘accept’, they are taken to a secure server page where
credit or debit card details are taken.
 Browsewrap 

• A user does not need to take action to affirm his consent to be bound.

• Instead, the agreement typically states that use of the website is

deemed acceptance of the agreement.

• However, courts are more likely to enforce clickwrap agreements than

browsewrap agreements.
 Browsewrap 

• To increase the likelihood of enforceability of a browsewrap

agreement, the website should:

• Provide clear notice of the browsewrap agreement.

• Make clear that use of the website constitutes consent to the
agreement.
• Indicate where its terms are located.
Browsewrap 
 Shrink-wrap contract

• The term shrink-wrap contract stands for the contract where the
terms and conditions are not visible until the consumer opens the
packaging or installs the software.

• Consumers cannot review any terms and conditions until they have
paid for the software, so the fundamental question from the judicial
standpoint of view concerns whether this kind of contract is valid and
enforceable.
 Shrink-wrap contract

• There are no consistent judicial opinions in shrink-wrap contracts but

as the terms and conditions are not available until the conclusion of
the contract, enforceability and validity seems less certain.
 Email Contracting
Postal rule and General Rule
• General rule: general rule of contract law acceptance of an offer takes
place when communicated (received).

• UK Postal rule: acceptance takes effect when a letter is posted (that

is, dropped in a post box or handed to a postal worker).
 Email Contracting
• Postal Rule (Kuwait)

• If the offer occurs via post, and the offeror specified a time limit for
the offer the offer will be valid for this period. If the offer does not
contain a time limit, the offer will be valid for a reasonable time to
allow the offeree to consider the offer. The offer will be invalid if the
offeror has not received the acceptance within a reasonable time.
 Email Contracting
Postal rule and General Rule
The rules of contracts by post (postal rules) include the following:

• An offer made by post/letter is not effective until received by the

offeree.

• Acceptance is effective as soon as it is posted.

• For revocation to be effective, it must be received by the offeree

before they post their letter of acceptance.
 Email Contracting
Postal rule and General Rule
According to Lindley J in Byrne v Van Tienhoven :
• “It may be taken as now settled that where an offer is made and
accepted by letters sent through the post, the contract is completed
the moment t the letter accepting the offer is posted, even though it
never reaches its destination.”

• The key difference between the two mediums is that while the post
takes about a week to get to London, and two further days to be
delivered by local mail, the internet performs its process in about five
seconds.
 Email Contracting
Postal rule and General Rule
Ask if the postal acceptance rule applies to emails (electronic
communications):

• If your answer is yes the postal acceptance rule states that there is a
contract when posted – so we should apply the "sent" rule.

• If the answer is no; then the "received" rule apply.

 Email Contracting
• Instant acceptance: applying the original rule of validity upon delivery
and receipt

• The majority of commentators suggest that email is ‘almost’ or 'more

or less' or ‘nearly’ instant with only a minority arguing to the contrary.

• Since many mail-servers issue a failure notification if an email

message cannot be delivered, meaning this is under the control of the
sender.
 Email Contracting
• Non instant acceptance: such as acceptance sent through the post,
which applies the exceptional rule meaning the offer becomes valid
upon posting rather than delivery.
• Technically speaking, however, an email system consists of many
processes which may lead to a number of delays, since emails are
sent from the mail-sender to the outgoing mail-server, and
subsequently to the final mail-server, and are then finally accessed or
retrieved by the addressee.
• Delays may occur, meaning it cannot be considered instant.
 Email Contracting
• Not all mail-servers provide this feature, or the notification may not
be issued. The email once again remains outside the sender’s control.

• So, emails could not be considered as an instant communication

method because there are gaps and delays in sending and receiving
information.

• Both sender and receiver could not communicate directly between

each other
 Email Contracting UK

• Conclusion: When an acceptance communicated electronically, will

be treated as binding. If this is the case, it is likely that an acceptance
will be treated as binding at the point that it is received by the
computer system under the control of the recipient. i.e. general rule.

• This means that the postal rule (dispatch rule) shall not apply to
contracts occur via email.
 Email Contract in Kuwait
• Article 15 of the Law No 20 2014 states that:
• The electronic document or record shall be deemed sent from the
time it was entered into data processing system which is not subject
to the control of the creator.
• The time of messages receipt shall be the time it was entered to the
electronic data processing system of the addressee.
• Although there are no clear provisions in the Law No 20 2014 relating
to email contracts, article 15 above shows that the Kuwaiti law’s
position is similar to the UK. i.e. the general rule.
 Unit Two
The UNCITRAL Model Law
on Electronic Commerce
(1996)
 The United Nations Commission on International Trade Law (UNCITRAL)

• Established by the United Nations General Assembly.

• Responsible for helping to facilitate international trade and investment.

• Plays an important role in harmonization and modernization of the law

of international trade through conventions, model laws.

• Promoting ways and means of ensuring a uniform interpretation and

application of international conventions and uniform laws in the field of
the law of international trade.
 The United Nations Commission on
International Trade Law (UNCITRAL)

• Collecting information on national legislation and modern legal

developments, including case law, in the field of the law of
international trade.

• Preparing or promoting the adoption of new international

conventions, model laws and uniform laws.
Examples of International Conventions by the
UNCITRAL
• The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the
New York Convention).
• The United Nations Convention on the Carriage of Goods by Sea (1978).
• The United Nations Convention on Contracts for the International Sale of Goods (1980).
• The United Nations Convention on International Bills of Exchange and International
Promissory Notes.
• The 
United Nations Convention on the Use of Electronic Communications in International Co
ntracts
 (2005).
• The 
United Nations Convention on Contracts for the International Carriage of Goods Wholly
or Partly by Sea
.
Examples of Model Laws by the UNCITRAL
• UNCITRAL Model Law on International Commercial Arbitration.

• UNCITRAL Model Law on Electronic Commerce 1996.

• UNCITRAL Model Law on Electronic Signatures 2001.

• UNCITRAL Model Law on International Commercial Conciliation.

• UNCITRAL Model Law on Cross-Border Insolvency.

The UNCITRAL Model Law on Electronic
Commerce (1996)
• Core principles:
1. functional equivalence : paper documents and electronic
transactions are treated equally by the law; and
2. technology neutrality : the law does not discriminate between
different forms of technology.
• Of these two principles it is the former that is of the greatest
importance, allowing the legal requirements of paper-based
documents such as writing and signature to be readily translated into
electronic equivalents.
The UNCITRAL Model Law on Electronic
Commerce (1996)
• The Objectives:
- The purpose of the Model Law is to offer national legislators a set of
internationally acceptable rules as to how a number of such legal
obstacles may be removed, and how a more secure legal environment
may be created for what has become known as "electronic
commerce".
- The principles expressed in the Model Law are also intended to be of
use to individual users of electronic commerce in the drafting of some
of the contractual solutions that might be needed to overcome the
legal obstacles to the increased use of electronic commerce.
 UNCITRAL Objectives
• The United Nations Commission on International Trade Law, with a
mandate to further the progressive harmonization and unification of
the law of international trade and in that respect to bear in mind the
interests of all peoples, in particular those of developing countries,
in the extensive development of international trade.
 UNCITRAL Objectives
• Noting that an increasing number of transactions in international
trade are carried out by means of electronic data interchange and
other means of communication, commonly referred to as “electronic
commerce”, which involve the use of alternatives to paper-based
methods of communication and storage of information.
 UNCITRAL Objectives
• The establishment of a model law facilitating the use of electronic
commerce that is acceptable to States with different legal, social and
economic systems, could contribute significantly to the
development of harmonious international economic relations.
 UNCITRAL Objectives
• Believing that the adoption of the Model Law on Electronic
Commerce by the Commission will assist all States significantly in
enhancing their legislation governing the use of alternatives to paper-
based methods of communication and storage of information and in
formulating such legislation where none currently exists.
 UNCITRAL Objectives
• The Model Law should be regarded as a balanced and distinct set of
rules, which are recommended to be enacted as a single statute.
Depending on the situation in each enacting State, however, the
Model Law could be implemented in various ways, either as a single
statute or in several pieces of legislation.
 UNCITRAL Structure
• The Model Law is divided into two parts, one dealing with electronic
commerce in general and the other one dealing with electronic 19
commerce in specific areas – e.g. dealing with electronic commerce as
it applies to the carriage of goods.
 UNCITRAL Definitions:
• Data message: means information generated, sent, received or
stored by electronic, optical or similar means including, but not
limited to, electronic data interchange (EDI), electronic mail, telegram,
telex or telecopy.

• Electronic data interchange (EDI): the electronic transfer from

computer to computer of information using an agreed standard to
structure the information.
 UNCITRAL Definitions:
• Originator of a data message: a person by whom, or on whose behalf,
the data message have been sent or generated prior to storage, if any,
but it does not include a person acting as an intermediary with
respect to that data message.

• Addressee: of a data message means a person who is intended by the

originator to receive the data message, but does not include a person
acting as an intermediary with respect to that data message
 UNCITRAL Definitions:
• Intermediary: with respect to a particular data message, means a
person who, on behalf of another person, sends, receives or stores
that data message or provides other services with respect to that data
message

• Information system: a system for generating, sending, receiving,

storing or otherwise processing data messages
 Interpretation of UNCITRAL

• The need to promote uniformity in its application and the observance

of good faith

• Questions concerning matters governed by this Law which are not

expressly settled in it are to be settled in conformity with the general
principles on which this Law is based
 The core provisions of the UNCITRAL e-
commerce Model are to be found in:
• Article 5 (Legal Recognition)
• Article 6 (Writing)
• Article 7 (Signature)
• Article 8 (Original)
• Article 9 (Admissibility And Evidential Weight Of Data Messages)
• Article 10 (Retention Of Data Messages)
• Article 11 (Formation And Validity Of Contracts)
• Article 12 (Recognition By Parties Of Data Messages)
• Article 13 (Attribution Of Data Messages)
• Article 14 (Acknowledgement Of Receipt)
• Article 15 (Time And Place Of Dispatch And Receipt Of Data Messages)
 The Legal Recognition Of Electronic
Instruments: (Article 5)

• Article 5 and 5b state that 'information shall not be denied legal effect,
validity or enforceability solely because it is in the form of a data message.

• This means that a communication shall not be denied validity or

enforceability on the sole ground that it is in the form of an electronic
communication.
 The Non-Discriminatory Treatment of
Contracts Formed Using Electronic Communications
• A communication shall not be denied validity or enforceability on the sole ground that it is in the
form of an electronic communication;

• While a party is not obliged to use or accept electronic communications, their agreement to do so
may be inferred from their conduct;

• Electronic communications that are not addressed to a specific party but are accessible by a
number of parties using an information system are to be considered an invitation to make an offer
(or an invitation to treat), unless a contrary intention is clearly expressed; and

• A contract formed where one or both parties are an automated information system shall not be
denied validity on the sole ground that there was no intervention by a natural person.
 Writing (Article 6)
Traditional Contract Law: The UNCITRAL:
• Most national laws and international conventions
include provisions requiring certain transactions • Here we look at the functional
to be concluded or evidenced in writing or certain
information to be presented in writing. requirements for a "writing,"
- Requirement for a “written document” can be for • where the law requires that a
(2) reasons:
1. A writing may be required for a variety of
communication or contract is in
reasons. If it is required as a condition of validity of writing, that requirement is met
the contract, failure to comply with the
requirement would render the transaction null and
if an electronic communication is
void. used that is accessible and
2. If, on the other hand, a writing is required by law usable for subsequent reference.
for evidentiary purposes, the absence of a writing
will not generally affect the validity of the contract • (Article 6)
but its enforceability in the event of litigation
 Signature (Article 7)
Traditional Contract Law:
• A signature or other form of authentication
is normally required to establish the
identity of the signatory and his intention
to associate himself with or be bound by
the contents of the document.
• The most common form of authentication
required by law is a manual signature.
• The main forms of signature are:
1. stamp.
2. Hand written signature.
3. Fingerprint.
The UNCITRAL:
• where there is a legal requirement for a
communication or contract to be signed, that
requirement is met if:
1. a method is used to identify the party and to
indicate that party’s intention in respect of the
information in the communication; and
2. the method used is reliable as appropriate for
the purpose which the electronic
communication was generated; or is proven to
identify the party and indicate their intention in
respect of the information within the
communication.
• (Article 7 )
 Original (Article 8)
Traditional Contract Law: The UNCITRAL:

• the requirement is often for a • where the law requires that a

written, signed, original paper contract or communication should
document. An original may be be retained in their original form,
required in order to ensure the that requirement is met if there is a
reliable assurance as to the integrity
integrity of a document and that of the communication and the
the information presented in a information is capable of being
document has not been altered. displayed to the person whom it is to
be made available.
• (Article 8)
 Article 11. Formation and validity of
contracts
• In the context of contract formation, unless otherwise agreed by the
parties, an offer and the acceptance of an offer may be expressed by
means of data messages. Where a data message is used in the
formation of a contract, that contract shall not be denied validity or
enforceability on the sole ground that a data message was used for
that purpose.
 Admissibility And Evidential Weight
(Article 9)

• In any legal proceedings, nothing in the application of the rules of

evidence shall apply so as to deny the admissibility of a data message
in evidence: on the sole ground that it is a data message.
 Acknowledgement of receipt
(Article 14)
• The originator agreed with the addressee that receipt of the data message must be
acknowledged.

• Where the originator has not agreed with the addressee that the
acknowledgement be given in a particular form or by a particular method, an
acknowledgement may be given by

• (a) any communication by the addressee, automated or otherwise,

• (b) or any conduct of the addressee sufficient to indicate to the originator that the
data message has been received.
 Acknowledgement of receipt
(Article 14)

• Where the originator has stated that the data message is conditional
on receipt of the acknowledgement, the data message is treated as
though it has never been sent, until the acknowledgement is received.
 Acknowledgement of receipt
(Article 14)
• Where the originator has not stated that the data message is conditional on receipt of the
acknowledgement, and the acknowledgement has not been received by the originator within
the time specified or agreed or, if no time has been specified or agreed, within a reasonable
time, the originator:

• (a) may give notice to the addressee stating that no acknowledgement has been received and
specifying a reasonable time by which the acknowledgement must be received;

• (b) and if the acknowledgement is not received within the time specified in subparagraph (a),
may, upon notice to the addressee, treat the data message as though it had never been sent, or
exercise any other rights it may have.
 Time Of Dispatch And Receipt
(Article 15)
• (Article 15 para. 1 & 2)

• provides that the time of dispatch of an electronic communication is when

it leaves an information system under the control of the originator.

• provides that the time of receipt of an electronic communication is when

it becomes capable of being retrieved at an electronic address designated
by the addressee.
 Place Of Dispatch And Receipt
(Article 15)
• (Article 15 para. 3)

• Location of the parties:

- The location of the parties plays an important role in determining the place of
dispatch of an electronic communication and the place of contract formation.

- It help in determining which court in which country has jurisdiction to hear

disputes arising from an electronic contract.

- Location is also important in determining the applicable law.

 Place Of Dispatch And Receipt
(Article 15)

• Factors that may be considered in determining the location of the parties are:
A. The place of business is presumed to be the location indicated by the party;
B. If a place of business has not been indicated and there is more than one then
the place of business is the location which has the closest relationship to the
contract;
C. Where a person does not have a place of business, their place of habitual
residence is to be used;
D. A location is not a place of business simply because it is the location where
the technology used in connection with the formation of a contract; and
E. The use of a domain name or email address connected to a specific country
does not create a presumption that a party’s place of business is located in
that country.
 Electronic commerce in specific areas:
Actions related to contracts of carriage of goods
• This law applies to any action in connection with a contract of
carriage of goods, including but not limited to:
• furnishing the marks, number, quantity or weight of goods.
• stating or declaring the nature or value of goods.
• issuing a receipt for goods.
• confirming that goods have been loaded.
• notifying a person of terms and conditions of the contract.
• giving instructions to a carrier.
• giving notice of loss of, or damage to, goods.
 Conflict of laws

• International private law provides rules of jurisdiction, choice of law

and recognition and enforcement of foreign judgments for cases
where the existence of a foreign element is present in the facts of the
dispute.

• The importance of choice of law rules to the regulation of cross-

border disputes is undoubted. The aim of the choice of law rule must
be to select the appropriate governing law on criteria of justice and
convenience for the parties.
 Jurisdiction

• The question of whether or not a court has jurisdiction to adjudicate a

dispute is the first stage of the litigation process in a case involving
the conflict of laws. This question must be answered in the affirmative
before the process can proceed to the next stage which involves the
characterisation of the cause of action and the choice of law.
 Jurisdiction

• The term jurisdiction is derived from two Latin words: ‘ius’ or ‘iurus’
which means “law”, and ‘dicere’ which means to “speak”; in other
words, jurisdiction literally means “to speak the law”. From a practical
point of view jurisdiction signifies the authority, competence or
power granted to a legally or formally constituted body, sovereign or
political leader to decide a case.
 Jurisdiction
• The jurisdiction of an immigration tribunal (i.e. its authority,
competence or power) is limited to dealing with immigration issues. It
does not have the competence to deal, for example, with
employment disputes (which can only be dealt with by an
employment tribunal). Thus if an employment dispute was brought
before an immigration tribunal for adjudication, the tribunal will
decline jurisdiction.

• The jurisdiction of a criminal court (e.g. the Crown Court in England) is

restricted to dealing with criminal cases. It cannot try civil cases.
 Jurisdiction
• In the European Union, only the European Court of Justice (CoJ) has
the jurisdiction to interpret EU law. National courts cannot interpret
EU law themselves as they do not have the jurisdiction to do so.

• In private international law the issue of jurisdiction assumes a

territorial dimension. Strictly speaking the jurisdiction of a national
court is limited to the national or territorial boundaries of the forum.
CHARACTERISATION IN PRIVATE INTERNATIONAL LAW

• Before a court can determine the choice of law it first of all has to
analyse the pleadings or submission put forward by the parties to the
dispute, identify the main factual aspects of the dispute, and then
assign to each factual element or component its most appropriate
legal category – i.e. do the facts as stated by the parties raise a
question of procedure? Or is it one of breach of contract, tort,
individual status, property, succession, etc?
 CHARACTERISATION IN PRIVATE
INTERNATIONAL LAW
• Matters relating to the creation of rights or duties, and to immovable
property are generally governed by the law of the situs (lex loci actus
or lex loci actus in the case of tort, lex contractus in the case of
contract and lex situs in the case of property).

• Law of the situs: is where the property is treated as being located for
legal purposes.
• Lex loci actus: is the law of the place where the act occurred.
• Lex contractus: law of the place where the contract is made.
 Connecting factor:

• In the conflict of law, connecting factors, are facts which tend to

connect a transaction or occurrence with a particular law or
jurisdiction. The following are the examples of connecting factors:

• 1.Domicile, residence, nationality or place of incorporation of the

parties;
• 2. The place of conclusion or performance of the contract;
• 3.The place where the tort or delict was committed;
• 4.The flag or country of registry of the ship;
• 5.The ship owner’s base of operations.
 Unit Three

Law No. 20 of 2014

Concerning Electronic
Transactions
 Law No 20 2014 Concerning
Electronic Transactions:
• The world is witnessing a great development in the field
of communications that are based on the exchange of
information through modern communication network.

• Either those that pass through the international

network (the Internet) or other means of
communication and electronic systems technically
linked with computers as a means for the exchanging,
broadcasting and archiving information.
 Law No 20 2014 Concerning
Electronic Transactions:

• The access to such means has become available to the

public. Transactions and exchange of information
through these sophisticated electronic means has also
become a broad concept that covers all the
commercial, industrial, cultural, and legal activities
and all areas of daily life.
 Law No 20 2014 Concerning
Electronic Transactions:

• Electronic trade transactions, like other electronic

transactions conducted through the modern means of
communication, doe not resort to paper documents,
but rely on electronic messages.
 Law No 20 2014 Concerning
Electronic Transactions:

• Electronic trade transactions are also related to

commercial activities with a broad concept which is
not limited to electronic transactions undertaken by
state agencies, bodies or institutions, companies or
individuals.
• They also serve the operations of an international
nature due to the universality of the means of
communication; namely (the Internet), linking all the
countries together.
 Law No 20 2014 Concerning
Electronic Transactions:

• Electronic transactions have made an upward growth

and now constitute a significant percentage of the
total domestic and international transactions due to
its speed in the conclusion and implementation of
agreements, contracts and transactions, and because
they provide direct connection and communication
between the parties to the transaction.
 Law No 20 2014 Concerning
Electronic Transactions:

• Kuwait is one of the leading Arab countries in the

introduction of modern systems for the development
of economic and commercial aspects

• It is preparing to be a global financial center seeking

to apply the electronic government system in support
of its overall development and advance the
development and modernization of all spheres of life.
 Law No 20 2014 Concerning
Electronic Transactions:

• It became necessary to cope with this growing development in

the electronic means of communication to be used in commercial
transactions and others.

• Therefore, the Law No. 20 of 2014 Concerning Electronic

Transactions was established to be consistent with the developed.

• The law was established under the guidance of the model law
adopted by the United Nations and the comparative electronic
transaction laws in the Arab and Western countries.
 Law No 20 2014 Concerning
Electronic Transactions:
•Electronic: Anything related to information
technology having electrical, digital, magnetic,
optical, whether wired or wireless and the
technologies developed in this field.

•Creator: The natural individual or juridical person

that sends the document or record via an electronic
message.
Law No. 20 of 2014 Concerning Electronic
Transactions: Definitions

• Electronic Document or Record: A collection of data or information

created, stored, extracted, copied, sent, communicated or received
completely or partially via electronic means.

• Addressee: The natural individual or juridical person to whom the

creator intended to send the document or record.
 Law No. 20 of 2014 Concerning
Electronic Transactions: Definitions

• Electronic Transaction: Any transaction or agreement entered into or

executed fully or partially via electronic means and correspondence.

• Automated Electronic System: An electronic computer software or

system especially designed to independently initiate an action or
respond to an action, completely or partially, without the intervention
or supervision of any natural person.
 Automated Electronic System: Example
• It is possible for computer users to instruct the computer to carry out
transactions automatically.
• For example, in today’s supermarket the computer updates its record as
items are scanned for sale. When the stock of an item falls to a
predetermined level the computer is programmed, without human
intervention, to contact the computer of the supplier and place an order
for replacement stock. The supplier’s computer, without human
intervention, accepts the order and the next morning automatically
prints out worksheets and delivery sheets for the supply and transport
staff.
• These electronic agents are programmed by and with the authority of
the buyer and supplier.
Law No. 20 of 2014 Concerning Electronic
Transactions: Definitions

Electronic Signature:
• The data that take the form of letters, numbers,
symbols, signs or others.
• Such data is necessarily listed in, attached to or
associated with an electronic document or record
through electronic, digital, optical or other means.
• The data has the nature that identifies and
distinguishes the person who signed the document
or record.
Law No. 20 of 2014 Concerning Electronic
Transactions: Definitions
• Protected Electronic Signature: The electronic signature
fulfilling the conditions of Article (19) of this law.
Article (19) The signature shall be deemed a protected
electronic signature if it meets the following conditions:

• The possibility of identifying the signatory.

• Exclusively linking the signature with the signatory
himself.
• The possibility of detecting any change in the data
Law No. 20 of 2014 Concerning Electronic
Transactions: Definitions
• Signatory: The natural individual or juridical person who owns the
data and tool for the creation of an electronic signature.

• Electronic Payment: The process of transferring and paying money via

electronic means.
Law No. 20 of 2014 Concerning Electronic
Transactions: Definitions

• Means of Electronic Payment: The means through which the person

can make electronic payments.

• The Competent Minister: The minister assigned by the Council of

Ministers.
 Scope of Application
• Article (2) The provisions of this law shall govern the electronic
records, messages, transactions, documents and signatures
related to the civil, commercial and administrative
transactions.
The provisions of this law shall not apply to the following:
• A. Transactions and issues related to personal status,
endowment, and wills;
• B. Real estate title deeds and the resulting original or
consequential real rights;
• C. Promissory notes and negotiable bills of exchange; and
• D. Any event that the law requires to be expressed in a written
document or to be documented or the making of which is
subject to a specific provision in another law.
 Recognition

• Article (3): Each of the electronic record, document,

message, transaction and signature, in the field of civil,
commercial and administrative transactions, shall have the
same legal effects of written records, documents, and
signatures in terms of its binding effect
• Article (5) The approval, acceptance and all matters related
to contracting, including any amendment, or recantation in
approval or acceptance, may be expressed wholly or
partially via electronic transactions.
The expression shall not lose its validity, effect or
enforceability just because it has been carried out via one
electronic correspondence or more.
 Consent

• Article (4): No person is obliged to accept dealing through electronic

means without his consent. The consent of the person shall be
concluded through his positive behavior that the case circumstances
shall leave no doubt in indicating.
 Evidential weight

• Article (7) Provisions of the Law of Evidence in Civil

and Commercial Matters shall govern the
authentication of the official and unofficial electronic
documents or records, their hard copies, the
electronic signature and the electronic writing
regarding what has not been provided for in this law
or its executive bylaws.
 Article (9): The electronic
document or record:

• The electronic document or record effective at law should fulfill the

following conditions together:

• A. The electronic document or record should be saved the way it was

created, sent or received, or in any other way easy to prove the
accuracy of data.
• B. The data contained in the electronic document or record should be
maintainable and storable so as to be retrieved at any time.
• C. The data contained in the electronic document or record should
identify the creator or sender, date and time of sending or receiving the
same.
• D. The document or record should be saved in an electronic format
pursuant to the conditions and rules set by the competent authority.
The electronic document or record:

• Article (13) The electronic document or record shall

not be binding to the addressee if the creator
precludes the possibility of retrieving, printing,
storing or maintaining the electronic document or
record by the addressee.

• Article (14) The electronic document or record may

be kept for the purposes of evidence,
documentation or any other purpose.
 The electronic document or
record: creator’s & addressee’s
headquarter
• Article (16) The electronic document or record shall be deemed
sent from the place where the creator’s headquarter is located,
and shall be deemed received in the place where the addressee’s
headquarter is located.

• If neither has a headquarter, his place of residence shall be

deemed his headquarter unless the creator of the electronic
document or record and the addressee have agreed otherwise.

• If the creator or the addressee had more than one headquarter,

the headquarter more relevant to the transaction shall be
deemed the place of sending or receipt.
 Electronic signature: validity and
applicability

• Article (18) The legal effect of the electronic signature shall not
be disregarded in terms of its validity and applicability merely
because it is in an electronic form.

Article (21) The signatory must take into account the following
matters:

• A. To take reasonable care and to avoid the illegal use of his

signature tool and data by others.

• B. To initiate without delay to notify the competent authority

or concerned persons, when he has sufficient evidence, that his
electronic signature has been subject to unlawful use.
Use of the electronic documents and
signatures by the government

Article (26) any governmental entity may, for the

purpose of carrying out its competencies:

• A. Accept documents in the format of electronic

documents or records.
• B. Issue any permit, license, decisions or approval in
the format of electronic documents or records.
• C. Accept the fees or any other payments settled
electronically.
• D. Offer government tenders of any type and receive
the offers electronically.
Use of the electronic documents and
signatures by the government
Article (27) If any governmental entity stipulates to
perform any of the tasks in article (26) it shall have
the right to determine the following:
• The method of format of the electronic documents.
• The method, style.
• The type of the required electronic signature.
• The method and format of the electronic signature.
 Electronic Payment:

• Article (28) Money transfer via electronic means is an acceptable way

for settling payments.

Article (29) Any financial institution which carries out electronic

payment business, shall comply with the provisions of Law No. 32 of
1968 concerning cash, the Central Bank of Kuwait.
 Privacy and Data Protection

•Article (32) In none of the causes authorized by law, governmental

bodies, agencies, public institutions, companies, non-governmental
bodied or employees thereof may not unlawfully access, disclose or
publish any personal data or information registered in the records or
systems of electronic processing related to positional affairs, personal
status, health status or elements of the financial disclosure of persons or
other personal information registered at the authorities referred to in
this Article or employees thereof by virtue of their positions.
unless such was done with the approval of the concerned person to
which such data or information belong or his legal representative or by
means of a reasoned judicial statement.

•(penalty: imprisonment for a period of three years as a maximum and a

fine of no less than five thousand dinars and not exceeding twenty
thousand dinars as, or either of them).
 Privacy and Data Protection
Article (35) All bodies mentioned in Article (32) may not do the
following:

• A. Collect, register, or process any personal data or information of

these mentioned in Article (32) in illegal methods or way or without
the consent of the concerned person or his representative.

• B. Use the referred personal data or information registered in their

documents or information system for purposes other than those to
which it was collected.

• (penalty: imprisonment for a period of three years as a maximum and a fine

of no less than five thousand dinars and not exceeding twenty thousand
dinars as, or either of them).
 Penalties

• Article (37) Knowingly uses a defective or false electronic signature,

system, signature tool, document or record. Unlawfully access, by any
means, an electronic signature, system, document or record, breaks
into the system. imprisonment for a period of three years as a
maximum and a fine of no less than five thousand dinars and not
exceeding twenty thousand dinars as, or either of them).
 Penalties
• Article (38) Shall be punished by imprisonment for a period of one
year as a maximum and a fine not less than thousand dinars and not
exceeding ten thousand dinars as a maximum, or either of them, any
licensee who obtains the license for providing electronic
authentication services if he violates the terms of the license.
 Jurisdiction

• Article (40) The public prosecution alone shall have jurisdiction over
investigation, action and pleading in the crimes set forth under this
Law and related crimes.
 conciliation
• Article (42) The public prosecution may accept the request for a
conciliation submitted by the person who has committed, for the first
time, by paying an amount of one thousand dinars to the treasury of
the court before referring the case to the competent court. The
acceptance of the conciliation request shall terminate the criminal
case and all the effects.
 Unit Four

Intellectual Property Right and E-Commerce

(Copyright, Domain Names, Meta-tags)
 Main types/forms of IP rights:

• Copy right

• Patent

• Trade mark
 1: Copyright
What is copy right& the purpose of copy right
protection:

• Copyright is a legal right created by the law of a country that grants the

creator of an original work exclusive rights for its use and distribution.
• A legal concept protects the original creations of mind from being copied
without permission of the author.
• Typically, the duration of copyright spans the author's life plus 50 to 100
years (that is, copyright typically expires 50 to 100 years after the author
dies, depending on the jurisdiction). Some countries require certain
copyright formalities to establishing copyright, but most recognize
copyright in any completed work, without formal registration. Generally,
copyright is enforced as a civil matter, though some jurisdictions do
apply criminal sanctions.
 The elements of CR definition:

• Protect original work

• Work is created in a fixed tangible form of expression. (writing,

printing, storing)

• Limited duration of protection

 Remedies

• Injunction

• Damage/Compensation
 Forms of protected work:

• Original literary, dramatic, musical or artistic works

• Softwares

• Sound recordings or films

• website design is likely to be protected by copyright.

 When does the protection starts?

Copy rights protection starts from the moment when the work is
created in a fixed, tangible form of expression. Then the author
becomes immediately the owner of the created work. i.e. the author
owns the copy right from the moment of the creation outside the mind
in a fixed tangible form
Duration of copy right protection in Kuwait:

• In Kuwait, the duration of protection endures for the period of the

author’s lifetime and fifty years following the author’s death
 Requirements of copy right protection:

• Originality

• Work is created in a fixed, tangible form of expression

• Registration? No registration required

Originality / Work is created in a fixed / tangible form of
expression / No registration is required

• Copyright protection is formality-free in countries party to the Berne

Convention for the Protection of Literary and Artistic Works (Kuwait
became party to the Berne Convention in 2014), which means that
protection does not depend on compliance with any formalities such
as registration or deposit of copies
 The owner of the copyright:

• The general principle:

The author / creator of the work shall be the owner

• When two or more authors prepare a work with the intent to

combine their contributions into inseparable or interdependent parts,
the work is considered joint work and the authors are considered
joint copyright owners. The most common example of a joint work is
when a book or article has two or more authors
 Exceptions:

• If a work is created by an employee in the course of his or her

employment, the employer owns the copyright.

• If the creator has sold the entire copyright, the purchasing business or
person becomes the copyright owner
 Applying copyright principles to software:

Software piracy: this include

• Multiple installation – this is where you install more copies of a
software program than you have licenses. E.g. buying 10 single-user
licenses for a product yet install it into 20 machines. You are using 10
illegal copies.

• Online piracy – this occurs when software is downloaded from the

web and installed but not paid for
 2: Patent:

• Definition: Patent is a set of exclusive rights granted by a sovereign

state to an inventor or assignee for a limited period of time in
exchange for detailed public disclosure of an invention. An invention
is a solution to a specific technological problem and is a product or a
process.

• A patent is generally granted after completing an examination

procedure by a government agency.
The duration of patent law protection – and when the
protection starts? (Kuwait)

• The provisions of Law No. 4 of 1962 and its amendment of 1999

allows for the registration of patents in Kuwait. The validity of a
patent of invention is 20 years as of the date of filing the application
 What is the purposes of patent protection?

• The disclosure of the invention so that others can benefit from the
invention.

• Reward and compensate the patent owner for his/her intellectual

effort, work and expenses.
 Requirements for patentability:

• Novelty - the invention is new

• It involves an invite step i.e. non-obvious—in order to be patented

• It is capable of industrial exploitation - a patent can only be granted

for an invention which is susceptible of industrial application, i.e. for
an invention which can be made or used in some kind of industry.
 Examples of excluded matters from patent
protection?

• Discoveries of materials already exist in nature

• Plants and animals

• Scientific theories and mathematical methods

• Rules and methods, e.g. doing business, performing purely mental act
or playing games
 How the patentee protects his/her right?

• A patent is requested by filing a written application at the relevant patent office. The person or company filing the application is
referred to as "the applicant". The applicant may be the inventor or its assignee.

• The application also includes one or more claims that define what a patent covers or the "scope of protection“

• After filing, an application is often referred to as “patent pending".

• Patent pending is the term used to describe a patent application that has been filed with the patent office, but has not issued as
a patent. During patent pending period the inventor obtains protection.

• Once granted the patent is subject in most countries to renewal fees to keep the patent in force. These fees are generally payable on
a yearly basis.
Remedies available for infringement of a patent:

• Injunction

• Compensation
 Revocation of patent
A patent may be revoked by the court on the application of any person
if it is established:
• That the invention is not a patentable invention.

• The specification does not disclose the invention sufficiently and

clearly.
 3: Trademark
Trade Mark and Service Mark:

• Trademark is a recognizable sign, design, or expression which

identifies products or services of a particular source from those of
others

• Trademarks used to identify services are usually called service mark. 

• The trademark owner can be an individual, business organisation, or

any legal entity. A trademark may be located on a package, a label,
a voucher, or on the product itself
 Trade Dress:

• Trade dress is a form of intellectual property, that generally refers to characteristics

of the visual appearance of a product or its packaging (or even the design of a
building) that signify the source of the product to consumers.

• Trademark protection can be extending beyond words, symbols and phrases to

include other aspects of a product, such as its color or its packaging.

• Such features fall generally under the term “trade dress” and may be protected if
consumers associate that feature with a particular manufacturer rather that the
product in general.
 Example and Purpose of trademark:

• Examples: Pepsi, Coca Cola, Maggi, MacDonald’s, Adidas, Nike, Philips

etc.

•  In other words, trademarks serve to identify a particular business as

the source of goods or services.
How to protect trademark? Registration:

• The law considers a trademark to be a form of property.

• At the national/regional level Proprietary rights in relation to a

trademark may be established through actual use in the marketplace -
Or through registration of the mark with the trademarks office.

• At the international level, there are two options: either to file a

trademark application with the trademark office of each country in
which you are seeking protection, or to use WIPO’s Madrid System.
 Madrid Protocol:

• At the international level, the Madrid Protocol182 provides for a

system of international recognition of trade marks in that recognition
in one signatory country will generally be recognised in another. The
system is organised by WIPO and offers a trade mark owner the
possibility of having his trade mark protected in several countries by
simply filing one application directly with his own national or regional
trade mark office.
What rights does trademark registration provide?

• In principle, a trademark registration will confer an exclusive right to

the use of the registered trademark. This implies that the trademark
can be exclusively used by its owner, or licensed to another party for
use in return for payment.
 Duration of trademark protection:

• Unlike copyrights and patents, trademark rights can last indefinitely as long as the
owner of the trademark continues to use the trademark to identify his/her goods or
services.

• However, renewal is required after specific time of the date of registration, stating that
the mark is still in use. If no renewal application is filed, the registration is cancelled
What kinds of trademark can be registered?

• A word or a combination of words, letters, and numerals can perfectly

constitute a trademark. But trademarks may also consist of drawings,
symbols, three-dimensional features such as the shape and packaging of
goods, non-visible signs such as sounds or fragrances, or color shades
used as distinguishing features – the possibilities are almost limitless.
 Is there a worldwide trademark?

• No. However, it is possible to file one application for a group of

countries such as:

1. The European Union, covering 15 countries in Europe;

2. The Madrid Protocol, covering several dozen countries; and

3. The Andean Pact, covering several South American countries.

Otherwise, one must seek trademark protection on a country-by-

country basis
 Trademark Infringement Relating to Transaction
Information

• Using others' trademarks as searching keywords or web page

keywords. (Meta-tags) Misuse of the trade mark in a meta-tag can be
an infringement.

• Using others' trademarks as the name, signage, decoration or

advertisement of the online shop.

• Using others' trademarks as domain names

 Reed Executive plc v. Reed Business
Information Ltd [2003] RPC 12

• The employment agency, Reed, had registered its name ‘REED’ as a trade mark
for employment agency services. The defendant, a business using the name
Reed as well, started its own employment agency/recruitment website known
as totaljobs.com and employed the name ‘REED’ as one of its metatags.

• Was this invisible use of the trade mark Reed in a metatag a sufficient use for
infringement purposes? The court, concluded that it was.
 Domain name hijacking:

•Domain registries have operated (and continue to do so) on the basis of

accepting the first application for registration of a particular domain name.
This has been open to exploitation by street – or internet wise users, who
have sought to register large numbers of popular names. E.g. McDonald’s,
Hertz and Rolex were issued to applicants with no connection with the well-
known firms. The practice of seeking a domain name corresponding with a
well-known organization is generally referred to as “domain name hijacking”.
Case: Harrods Ltd v UK Network Services Ltd and
Others [1997] 4 EIPR D-106

• Where the domain name ‘harrods.com’ was registered by Michael Lawrie.

Harrods, the famous department store in London wanted this domain name
to advertise themselves and their wares on the Internet.

• Michael Lawrie was ordered by the court to hand the domain name over to
Harrods, on the grounds that his potential use of the domain name
constituted trade mark infringement and passing off.
 Marks & Spencer plc. v. One in a Million
Ltd [1998] FSR 265

• In this case, some of the largest retail outfits in the UK brought an action against
an Internet domain name dealer. The domain name dealer had registered the
names of companies such as British Telecom, Marks & Spencer and Sainsbury’s
and then had the cheek to sell the domain names back to them.

• The claimants, justifiably upset that they were asked pay millions of pounds to
buy back the inherent goodwill in their own business names. The injunction was
granted. The defendant’s appeal was dismissed.