The Electronic Transactions Act - benefits for the bold or traps for the unwary?

By Jeremy Salmond | November 2003

With the Electronic Transactions Act (the Act) due to come into force in late November, senior associate Jeremy Salmond has analysed how this new legislation will affect business, especially information management and technological processes.

The Act is designed to facilitate the use of electronic technology by:

1. reducing uncertainty over:
   
   
   • the legal effect of information that is in electronic form or that is communicated by electronic means; and
     
     
   • the time and place of dispatch and receipt of electronic communications; and
     
     
2. allowing certain paper-based legal requirements to be met through the use of electronic technology that is functionally equivalent to those legal requirements.

Once the Act comes into full force, different parts of the Act will apply in different ways.

At one level, the provisions clarifying the legal effect of electronic information and the default rules for electronic communications apply generally at law.

On a more restricted level, the Act's provisions for the satisfaction of legal requirements only apply to statutes and regulations.

If the ETA achieves its purpose of reducing uncertainty and permitting legal requirements to be met electronically then - based on the theory that business likes legal certainty - the ETA should stimulate growth in the processing of transactions electronically and storage of information in electronic formats (or at least remove some of the impediments to such growth).

This should stimulate business and improve life for information management professionals. A better understanding of how, or if, this will occur can only be gained by working through the provisions and effect of the ETA.

First presented at the Information Management Summit 2003 held on 29 and 30 October 2003 in Wellington.