Introduction: Electronic contracts have become an integral part of daily life in the digital age, where the internet is used as the main medium for forming contracts and commercial transactions. With the increased reliance on digital technology, new legal challenges emerge that require innovative solutions to ensure compliance and protect the contracting parties. In this article, we will review the legal challenges and opportunities presented by electronic contracting and how businesses and individuals can benefit from it legally and safely.
Firstly: Definition of a Contract: A contract is an agreement between two or more parties to create a specific legal effect. The Egyptian Civil Code defines a contract as “an exchange of two parties’ expressions of matching wills, taking into account the legal conditions for the contract’s validity.” A contract has three main elements: consent, subject matter, and cause. Each element plays an important role in the contract’s validity.
- Consent: This means the agreement between the contracting parties’ wills. For its validity, consent must be free from defects such as error, fraud, duress, and undue influence.
- Subject Matter: The subject matter must be a specific or determinable item and lawful. It can be tangible or intangible and must comply with public policy.
- Cause: The purpose the contracting party intends to achieve through the contract must be lawful and not contrary to public policy or morals. It must be lawful and specified.
Therefore, electronic contracting can be defined as: The process of forming contracts over the internet using electronic means such as email and websites. This type of contracting includes the same elements and basic conditions as traditional contracts: offer and acceptance.
Secondly: Legal Significance of Electronic Contracting:
- Market Expansion: Electronic contracting allows companies to access a larger market and work with international clients more quickly and efficiently.
- Cost Savings: It can reduce costs associated with traditional contracting, such as printing and shipping costs.
- Increased Efficiency: Electronic contracting simplifies and speeds up the contracting process, leading to increased operational efficiency.
Thirdly: Legal Challenges of Electronic Contracting: Electronic contracting presents several legal challenges, including:
- Verifying Parties’ Identity: One of the prominent challenges in electronic contracting is verifying the contracting parties’ identity, as fake or illegal identities can be used.
- Compliance with International Laws: Electronic contracting faces legal challenges when dealing with parties from different countries, as laws and regulations differ from one country to another.
- Personal Data Protection: Handling and protecting personal data from theft or unauthorized use is a major challenge in electronic contracting.
- Cybersecurity: The risks of cyber-attacks and hacking increase, requiring companies to adopt strong security policies to protect electronic contracts.
Fourthly: Emerging Opportunities in Electronic Contracting:
- Innovation Enhancement: Electronic contracting offers new opportunities for innovation in areas such as digital marketing and e-commerce.
- Global Expansion: Small and medium-sized enterprises can expand their business scope to global markets thanks to electronic contracts.
- Improved Customer Service: Electronic contracting helps companies provide better and more interactive customer service through digital communication channels.
Fifthly: The Role of Technology in Enhancing Electronic Contracting: Technology plays a significant role in enhancing electronic contracts, including:
- Using Encryption: Encryption helps protect information exchanged through electronic contracts from unauthorized access.
- Electronic Verification Systems: Developing advanced verification systems to confirm the contracting parties’ identities and ensure legal compliance enhances security in contracting.
- Blockchain Technologies: The use of blockchain technologies enhances trust and transparency in securely recording electronic contracts.
Sixthly: Legal Framework for Regulating Electronic Contracts in Egypt: The regulation of electronic contracts in Egypt is governed by several laws and legislations aimed at providing a legal framework for electronic transactions and ensuring the contracting parties’ rights. Key laws include:
- Egyptian Civil Code: The Civil Code categorizes contracts into named contracts, which are explicitly detailed in the law, and unnamed contracts, which are governed by the principle of freedom of contract and follow general rules and essential conditions. Electronic contracts can be negotiated, formed, and executed under these basic rules, provided they comply with mandatory legislative provisions, public policy, and morals.
- Electronic Signature Law No. 15 of 2004: This law regulates the use of electronic signatures and sets the necessary conditions and requirements for recognizing electronic signatures as a legal means of proving electronic contracts.
- Public Procurement Law No. 182 of 2018: This law includes provisions governing how public entities conduct electronic contracts with other parties, aiming to achieve transparency and integrity in government contracts.
- Personal Data Protection Law No. 151 of 2020: This law aims to protect individuals’ personal data in electronic transactions, specifying conditions and controls for collecting, processing, and storing personal data.
These laws provide a comprehensive and essential legal framework for regulating electronic contracts and ensuring the contracting parties’ rights.
Seventhly: Future Developments in Electronic Contracting: With the continuous development of digital technology, it is expected that contract laws and regulations governing electronic contracting in various countries will continue to evolve to include more preventive measures and legal security guarantees. This includes detailing and clarifying the provisions of various contracts that may be covered by electronic contracts. Future developments may involve applying new technologies such as artificial intelligence to improve contracting processes and detect threats more effectively.
Institutions or companies should develop legal strategies to ensure compliance in electronic contracting, including:
- Developing Internal Policies: Implementing internal policies and procedures to ensure compliance with laws related to electronic contracting and data protection.
- Using Reliable Electronic Signatures: Using reliable electronic signatures that ensure the contracting parties’ identities and comply with legal requirements.
- Collaborating with Law Enforcement Agencies: Cooperating with legal authorities to protect electronic contracts and combat fraud and hacking.
- Awareness and Training: Providing necessary training for individuals or employees on the importance of electronic contracting and how to implement the necessary policies to ensure legal compliance.
Conclusion: Electronic contracting offers significant opportunities for companies and individuals to expand their businesses and achieve operational efficiency. By following essential legal steps and leveraging modern technology, companies and individuals can achieve compliance and effectively ensure the protection of electronic contracts.