Electronic Contracts: Formation and Legality

Topic: E-Commerce
Words: 1656 Pages: 6

In electronic commerce (e-commerce), e-contract would refer to an agreement or contract taking place in the field. In most cases, the involved parties will not have to meet physically. Commercial transactions and business deals completed using electronic methods would fall this category. The formation of e-contracts is usually a simple process. For instance, individuals can rely on the use of an e-mail or electronic agencies. Participants are required to consider the established legal processes and consider the elements of any binding contract. These include the presentation of an offer and subsequent acceptance. The parties would then make the relevant considerations based on their capacity and competencies. The use of e-signatures is critical whereby parties form contracts that are legally enforceable.

In different jurisdictions, the nature of e-contracts allows more parties to be involved. Just like contracts signed offline, e-contracts would be acceptable under the law. The legal requirements include that the existing parities need to accept the emerging agreements. Consent could be withdrawn any time. Those who involved could ask for a detailed document whenever necessary. The participants should be able to communicate to each other and be aware of the emerging terms and conditions. Based on this analysis, it is evident that e-contracts are binding whereby the individuals need to consider the formulated laws and sign the emerging agreements through the power of free consent.

Consumer Protection in E-contracts: Applicability in Kuwait

In many countries, consumer protection remains a major concern for legal scholars and government agencies. Established laws are designed in such a way companies need to produce and delivery healthy products that meet the demands of the potential buyers. The emergence of e-commerce and e-contracts has led to expansion of such consumer laws to compel service providers to focus on the needs of the targeted clients. Unfortunately, most of these policies have been inadequate due to the fact that most of the transactions and sales are completed at the international level. In emerging nations, consumers tend to be less informed about their rights when it comes to e-contracts. The established mechanisms are also incapable of providing the much needed protection. Fortunately, developed countries have expanded their laws in such a way that they emphasize on the rights of consumers. Service providers need to provide timely and right information to the targeted clients, address emerging complaints, and promote safety. However, most of these laws are being improved and reinforced depending on the challenges emerging from e-contracts. The ultimate aim is to maximize the level of security and ensure that more citizens are able to achieve their potential.

In Kuwait, the new regime introduced additional laws that were intended to protect consumers from manufacturers and online businesses. This policy would be called Law No. 39 of 24, or the Consumer Protection Law. With its 37 Articles, this law has been playing a positive role towards promoting control mechanisms and defending the rights of more citizens. The law went further to support the establishment of a consumer protection committee that continues to address dishonesty and malpractices arising from e-contracts. The Electronic Transactions Law (ET Law), also called Law No. 20 of 2014 has become a critical law that dictates most of activities occurring online or electronically in Kuwait. While emulating the guidelines on traditional paper transactions, this policy helps regulate the manner in which digitalized systems promote security, safety, and efficiency to the country’s citizens.

Additional improvements have emerged whereby customers are protected to safe products, quality information, redress, and autonomy. Parties are required to agree to the initial terms of electronic deals if the ET law is to become applicable. However, the ET Law acknowledges that individuals cannot be coerced into entering into agreements if they are not willing or ready. Within the wider region, Gulf Council Cooperation (GCC) states have gone further to establish a common committee aimed at promoting consumer rights in the field of e-commerce. This agency is also resourceful when it comes to the provision of protection to every consumer engaging in e-business practices. Such measures are effective and capable of meeting the demands of more people and business entities in this country.

Personal Data and Kuwaiti Law

Electronic commerce has paved way for numerous processes of using consumer data for beneficial purposes. Companies have developed data-drive models that acquire and analyze personal data. The emerging information becomes useful to monitor consumer preferences and offer tailored advertising and targeted services. Dawwas and Alawneh acknowledge that most of these stakeholders would acquire confidential data, such as e-mail addresses, credit card information, personal location, and personal status. All agencies, whether public or private, are not allowed to disclose, access, or publish personal data without consent. While some contracts exist under the established laws and contractual relationships, some companies might use the information for the wrong purposes. Cases of phishing and hacking could also result in a scenario whereby personal information is in the hands of third-parties. Contract law might, therefore, not be effective towards dealing with this problematic issue.

In Kuwait, the government has put in place proper laws and mechanisms to protect consumer data. For instance, The Kuwait’s Communication and Information Regulatory Authority (CITRA) presented Resolution No. 42 in the year 2021 to help protect private data. The agencies sought to establish a unique form of regulation whereby private and public players would handle personal data with the highest level of authenticity and privacy. CITRA remains concerned about the power of cloud computing, Blockchain technologies, and the Internet of things (IoT) and the risks they pose to consumer information. CITRA has been keen to protect the rights of citizens when it comes to the nature of data businesses collect from e-contracts. This policy is also applicable to the wider Communication and Information Technology Service (CIT) in the country.

To maximize safety, this law requires that service providers comply with the promoted guidelines, offer clear information to citizens, and maintain the limited purpose or use of data. It is also notable that illegal processing or use is also forbidden in this country. Advanced measures and technologies are proposed to ensure no damage or accidental loss of personal data. Government agencies are exempted from the policy since they involved in acquiring and processing data for security purposes, including detecting criminal activities and providing avenues for the needed enforcement. This law remains critical towards supporting the rights of the greatest majority and minimizing chances of unauthorized access or loss of personal data. The government considers the power of

Kuwaiti Law and Electronic Signature

In Kuwait, the Electronic Transactions Law, or ET Law No. 20, of 2014 remains the primary policy when it comes to the question of electronic signatures. According to this law, parties do not need to have handwritten documents or signature to present an enforceable contract. The policy acknowledges that parties will be in a position to accept electronic documents. Individuals would need to have agreed either physically or verbally. Based on such a law, e-signatures remain valid and legally acceptable. Parties can preset them in court since they remain admissible. The country has adopted a hierarchical model whereby individuals are able to accept such signatures. The presence of a Certifying Authority (CA) would make such digital signatures are valid and legally binding.

Under the ET law, unique legal requirements were mandatory whereby individuals need to remain committed as if there was a physical or written signature in place. The involved parties need to ensure that their e-signatures are in accordance with Law Decree No. 39. This policy of 1980 describes the manner in which evidence is presented whenever dealing with commercial and civil matters. The approval by an established local authority would be essential to ensure that the emerging e-signature is legal and acceptable. Some of the key areas that continue to benefit from the admissibility of e-signatures include online business, procurements, certificates, sale agreements, and trade payments. Individuals are also finding such policies applicable in the real estate sector when people are leasing property. The presence of the ET law has, therefore, presented a level playing ground for ensuring that e-signatures are capable of meeting the demands of more citizens. Additionally, such a law helps reduce cases of dishonesty and fraud within the wider area of e-commerce.

Kuwaiti Law and Electronic Payments

In Kuwait, the government relies on the ET law to regulate electronic payments in the nation’s territories. Under this policy, such payment approaches are acceptable. However, the involved parties and organizations need to ensure that the practices are in compliance with the guidelines of the Central Bank of Kuwait (CBK). The primary law regulating such transfers is defined under Law No. 32 enacted in 1968. This policy is simply called the Banking Law in this country. Under the ET law, financial institutions and departments relying on electronic methods of payments should implement acceptable procedures to maximize safety. These stakeholders need to focus on desirable approaches that will help maintain the highest level of confidentiality. The consideration of the formulated legal standards and guidelines is necessary to support the delivery of positive outcomes.

In Kuwait, the CBK is empowered under the existing laws to issue additional instructions and frameworks to the major financial institutions. The relevant leaders apply the nation’s jurisdictions accordingly when it comes to the continuous monitoring and regulation of every type of electronic payment. According to Alkhaldi, such measures are critical to reduce cases of fraud while ensuring that the parties are in a position to achieve their economic goals. The established laws are also implemented in such a way that they remain progressive and make it easier for most of the citizens to pursue their personal and business aims. Companies and other key stakeholders providing or relying on electronic payments are required to go a step further to improve the safety and security of the systems. Such efforts are essential to make electronic payments reliable and capable of meeting the demands of all stakeholders in Kuwait.

Reference List

Adobe (2020) Electronic signature laws & regulations – Kuwait. Web.

Alkhaldi, H.N. (2020) ‘Legal challenges of e-commerce in Kuwait during the COVID-19 pandemic’, Kilaw Journal – Special Supplement, 8(6), pp. 125-144. Web.

Dawwas, A. and Alawneh, T. (2019) ‘Challenges arising from the retailer’s use of standard terms in B2C e-contracts’, Kilaw Journal – Special Supplement, 4(1), pp. 43-62. Web.

Little, R., Cunha, J. and Levac, L. (2017) Kuwait’s regulatory framework gearing up to address fintech and the digital revolution. Kuwait City: IFLR 1000.

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