Page 15: of Maritime Reporter Magazine (November 2000)

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E-Commerce in order to survive. Large multinational corporations have their own data systems in place through Internet websites and are dictating individual data exchange mecha- nisms with their customers and suppliers.

This type of competition with EDI should foster the proper environment necessary to create new and uniform data exchange systems capable of use and acceptance by companies at all levels of capitalization.

Legal Issues Related to

Business-to-Business E-Commerce

As with paper documentation, electronic contracting gives rise to legal rights and duties. Transitioning business-to-business commerce to e-commerce requires apply- ing traditional procedures for creating binding agreements, establishing assured payment mechanisms and settling dis- putes to Internet transactions. Evidence of electronic transactions must be made suf- ficiently reliable to prove the making of and the contents of the contracts. The goal today is to put electronic transactions on the same legal level of acceptability and uniformity as paper transactions. In order to achieve this goal, three critical issues must be evaluated before transacting mar- itime business via e-commerce: security of the transaction, negotiability of the terms, and choice of governing law.

Business-to-business e-commerce raises multiple security issues for the maritime industry. For example, how will parties ensure that the bill of lading or purchase order has not been tampered with during transmission from the buyer to the seller?

Authentication and validation of electron- ic documentation is a major concern for any industry conducting business over the

Internet. With EDI, the parties only have the transmitted document from the trans- feror without any assurance as to authen- ticity or lack of alteration. The advent of digital signatures, with the use of public and private keys, to pass secure messages through a trusted third party, or certifica- tion authority, will soon become the norm to ensure security and promote confidence in electronic transactions. The CMI already incorporated the use of digital sig- natures into its model electronic bill of lading rules.

In addition to security issues arising in e-commerce transactions, there is the con- cern of negotiability. E-commerce trans- actions have rendered purchases and sales more automated and there are concerns that purchasers are losing negotiating power. With electronic contracts exchanged between the parties, the meth- ods of acceptance and rejection have changed. Today sellers are providing con- tracts to buyers with non-negotiable terms, and there is no longer a battle of the forms issue. Acceptance may be construed from the moment the buyer places the order and the legal recourse available to the buyer is in many cases already dictated in the pur-


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Maritime Reporter

First published in 1881 Maritime Reporter is the world's largest audited circulation publication serving the global maritime industry.