Australian and regional regulatory responses to the key challenges of consumer protection in electronic commerce (March 2008)

3.2. Electronic contracting

3.2.1. Australian Electronic Transactions Act(s)
3.2.2. Exemptions

3.2.1. Australian Electronic Transactions Act(s)

In Australia, the electronic contracting issues are covered by the Electronic Transactions Act 1999 (Cth)[27] (ETA). The ETA states that transactions taking place under a law of the Commonwealth will not be invalid just because they are completed electronically.

The ETA is based on two principles:

1. Functional equivalence
Paper documents and electronic transactions are treated equally by the law.
2. Technology neutrality
The law does not discriminate between different forms of technology.

The ETA provides a legal framework for electronic contracting. The Act is technology neutral in that it enables electronic transactions to occur without prescribing the use of particular types of technology. The key sections are:

Section 8 – General
A transaction is not invalid because it took place wholly or partly by means of one of more electronic communications.
Section 10 – Signatures
If the signature of a person is required, that requirement may be met by use of an electronic method (subject to certain additional conditions).
Section 11 – Documents
A person can produce a document in the form of an electronic communication where other laws require the production of a paper document.
Section 12 – Records
If a person is required to record or retain information or documentation in writing, that requirement can be met by retaining or recording the information in electronic form.

In order to achieve national uniformity all States and Territories have passed Electronic Transactions Acts that complement the Commonwealth’s ETA. This layer of state legislation therefore covers private sector transactions.

Australian Capital Territory – Electronic Transactions Act 2001 (ACT)
New South Wales – Electronic Transactions Act 2000 (NSW)
Northern Territory – Electronic Transactions Act 2001 (NT)
Queensland – Electronic Transactions Act 2001 (Qld)
South Australia – Electronic Transactions Act 2000 (SA)
Tasmania – Electronic Transactions Act 2000 (Tas)
Victoria – Electronic Transactions Act 2000 (Vic)
Western Australia – Electronic Transactions Act 2003 (WA)

The State and Territory ETAs are generally a mirror of the Commonwealth ETA, with occasional small differences in definitions[28], and occasional additional sections[29]. However, where the mirror breaks, indeed shatters, is in their approach to exemptions. The scope, type and location of exemptions differ markedly between jurisdictions.

3.2.2. Exemptions

The numerous exemptions to the Commonwealth ETA and the State and Territory ETAs cause significant confusion in this area of law. Having set up a series of Acts which appear, on their face, to enable an electronic communication to meet the requirements of writing, signatures, material form and record-keeping, the exemptions then strip away all or part of these provisions in a variety of scenarios.

Exemptions do serve their role, and of course some limited exemptions may be justified. Requirements for some paper based documents and real signatures may be with us for some time to come. However, it is the complexity and inconsistency of the exemptions that is most worrying for electronic commerce. It is hard to have confidence in the legal validity or enforceability of an electronic communication if there is a chance that it is subject to an obscure exemption. This situation is not helped by the difficulty faced in locating and identifying relevant exemptions.

The exemptions are incredibly inconsistent across jurisdictions – both in their application and their location. Some jurisdictions have exempted numerous pieces of legislation, while other jurisdictions have exempted virtually nothing. The exemptions are also provided in different locations across jurisdictions making the process of identifying exemptions difficult and time consuming.

Overall, these exemptions reduce legal certainty in electronic commerce, which was a key objective of both the Model Law and the ETA.

There are several broad types of exemptions that can be found in the ETAs:

General Exemptions
Some general activities or requirements may be exempt from the relevant ETA. These exemptions do not refer to a particular legal requirement set out in a specific piece of legislation. Rather they refer to a broad category of activity. Common (although inconsistent) examples are:
- Signing a will;
- Signing an enduring Power of Attorney;
- Witnessing a document;
- Lodging a court document; or
- Meeting the requirements of personal service of a document.
Exempt Legislation
The requirements of specific, named pieces of legislation may be exempt from the relevant ETA. This type of exemption is common, although again it is inconsistent across jurisdictions. The Commonwealth have exempted or partially exempted 157 pieces of legislation. Some States and Territories have not exempted any specific legislation.
Applicable Provisions of Exempt Legislation
Where legislation has been exempted, the exemption may sometimes only apply to particular requirements of the named piece of legislation. On some occasions this is very specific – such as a particular section or sub-section. On other occasions the exemption may cover a Part or a Division. This type of partial exemption is common at the Commonwealth level but is also used in several State jurisdictions.
Applicable Provisions of the ETA
Where a named piece of legislation has been fully or partially exempted from the ETA, the exemption may be further limited to particular provisions of the ETA (this is also true for the general exemptions discussed above). Sometimes the exemption will be restricted to the recognition of electronic signatures, or writing, but not the other provisions of the ETA.
Over-riding Legislation
In rare circumstances, another piece of legislation may contain provisions that purport to specifically override the operation of the relevant ETA. In these circumstances the legislation will specifically refer to the ETA (or an individual provision of the ETA) limiting its application to a particular set of circumstances.[30]

[27] <http://scaleplus.law.gov.au/html/pasteact/3/3328/top.htm>.

[28] Compare, for example, the definition of consent in the Commonwealth and Victorian ETAs.

[29] See for example the detailed and lengthy section (Part 2A) on electronic courts in the Electronic Transactions Act 2000 (NSW).

[30] See for example the time of receipt provisions that specifically override the ETA in the Migration Legislation Amendment (Electronic Transactions and Methods of Notification) Act No. 58, 2001 (Cth).