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Issue Date: October 2002 (es)

Online industry misinformed about new Internet laws

1 October 2002

Two companies that assist online businesses with legal compliance (Trust Online and Legalbuilder) recently conducted a survey to test the perceptions of the online industry towards new Internet laws - the Electronic Communications and Transactions (ECT) Act 25 of 2002 and the Promotion of Access to Information Act 2 of 2000 (PAIA). The survey was enabled by SA Surveys and is available at
Results from the survey indicate that only 11% of the respondents were consulted during the drafting of the ECT legislation and only 1% was consulted during the drafting of the Promotion of Access to Information Act. This is hardly surprising, as we at Technews have been exposed to legislation which has had a direct impact on the sectors in which we publish, but which were only brought to our attention months after the Bills had become LAW. The process of consultation is clearly not reaching businesses on the ground to the extent that law-makers would like, and the process of educating businesses about the implications of legislation affecting them is a slow, imprecise and laboured exercise. Nonetheless, we at eSecure will continue to strive to bring to your attention some of the legislative hurdles facing your business today.
Let us move on
A further 26% of respondents did not know what they should do to make their websites compliant with the ECT Act. Only 16% knew how the Promotion of Access to Information Act affected their websites. 55% of the respondents indicated that the government should be able to intercept e-mails, but only 15% indicated that this should include encrypted e-mails (as between an Internet user and his/her bank).
Only 21% of the respondents indicated that their attorneys were equipped to assist them with e-law related matters. Only 5% of the respondents had legal notices on their sites that complied with Chapters 3 and 7 of the ECT Act. 6% had the required PAIA manuals. A low 27% understood the risk of not being compliant.
These figures are quite startling, and indicate that, in spite of the progress made over the last four or five years regarding matters IT, there is still a relatively low level of awareness about the implications of current legislation on our businesses. Clearly there is much work to be done still.
Doing nothing could get you into big trouble
Most people of course, tend to do nothing when confronted with legal issues which appear 'grey' or 'confusing'. Rather than tackle matters head on, they wait until circumstances dictate that they need to do something. However, such a 'do nothing at all' approach could land the unwary in some hot water!
According to Reinhardt Buys, of Buys Inc. Attorneys, Chapter 3 of the Electronic Communications and Transaction Act could cost you and your company millions. Says Buys, "Chapter 3 of the ECT Act is broken up into two parts. Part one is the enabling part that allows everything that happened with pen and paper in the past to now happen online - legally and binding. Part two is the deeming part - it deems certain online acts to have happened at certain places and at certain times - that is where the problem comes in."
For example, agreements concluded online (through e-mail or SMS) come into place where and when the offeror receives acceptance of the offer. That means that if the offeror is a company in the USA, your contract comes into effect in the USA under US law! Your e-mails and SMS messages are deemed to have been sent when the addressee can retrieve them (notwithstanding the fact that it may never have been read or opened!). You are deemed to have received an e-mail if it is in your inbox or even still with your Internet Service Provider - yes, you may be bound to an agreement before you even read the whole thing! An e-mail or SMS message is deemed to have been sent by YOU if it comes from your computer, notwithstanding the fact that you may never have seen it!
Ouch. How can one limit the effect of the above?
According to Buys Inc, in terms of section 21 of the ECT Act you may enter into agreements to limit the effect of Chapter 3. So, you can have website legal notices, e-mail disclaimers and even sections in your paper agreements that manipulate Chapter 3 to your advantage. That is the good news. Buys Inc. suggest that businesses that use e-mail or SMS messages for correspondence must determine how they are affected by the deeming provisions of Chapter 3 and get the following in place to minimise its onerous effects:
1. Proper website terms and conditions that address the deeming provisions;
2. Full and proper e-mail disclaimers that protect your business against Chapter 3; and
3. Correct clauses in your paper agreements that regulate how communications during the negotiations and implementation of these agreements are changed to your benefit.
Till next month,
Darren Smith
Managing Editor

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