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Unit 10: Legal Issues - II
A single person operating an e-commerce site out of the residence would have to
comply with residential zoning restrictions. Neither can the owner have a
commercial signboard nor do anything else in violation of residential zoning
regulation.
10.3 EDI Interchange Agreement
It is a well-known fact that some order is necessary in the conduct of commerce in the paper world.
Simple activities like preparing an invoice, preparing a commercial contract, signing, and dispatching
will have to follow some protocols agreed by the trading partners. These might be formal or informal.
Apart from this, acceptable rules of conduct are necessary to achieve the kind of discipline needed for
conducting smooth and effective trade and commerce.
In the Electronic Data Interchange (EDI) world of electronic documents, such a discipline has to be
created through a set of rules, that have been developed in the form of interchange agreements within
the number of user groups, regions, and nation organizations. At the international level, UN has
adopted ‘The Model Interchange Agreement’ for the International Commercial Use of Electronic Data
Interchange (ICUEDI), which indicates the interchange of data and not the underlying commercial
contracts between the parties. It addresses the requirement for uniformity of agreements to eliminate
barriers in international trade, since different solutions for problems are being adopted by countries.
UN has recommended that the member countries have to take into account the terms and provisions of
the Model Interchange Agreement while framing their own laws on e-commerce.
An interchange agreement can be made between the trading partners. It sets up the rules to be taken for
using EDI or e-commerce transactions. It lists the individual roles and legal responsibilities of the
trading partners for transmitting, receiving, and storing electronic messages. The signing of the
interchange agreement indicates that the parties want to be bound by it and that they wish to operate
within the legal framework. This can help to minimize legal uncertainty in the electronic environment.
Many conventions and agreements pertaining to international trade do not anticipate the use of EDI or
e-commerce. Many national laws also create uncertainty pertaining to the legal validity of electronic
documents. There are very few national and international judgments which are ruling the validity of
electronic documents, signatures, or messages. It is in this kind of scenario where clear legal rules and
principles are missing that an interchange agreement gives trading partners readily available solutions
for formalizing the EDI or e-commerce relationship between them. It gives a strong legal framework for
making sure that the electronic documents will have a legally binding effect, subject to the national laws
and regulations.
The issues that were addressed by the working party, which set the Model Interchange Agreement are
as follows:
1. Selection of EDI standards, messages, and methods of communication.
2. Responsibilities to make sure that the equipment, software and services are operated and
maintained effectively.
3. Procedures for making any system change which might impair the ability of the trading partners
to communicate.
4. Security procedures and services.
5. Points at which EDI messages have legal effect.
6. Roles and contracts of any third party service providers.
7. Procedures for dealing with technical errors.
8. Need for confidentiality.
9. Liabilities in the event of any delay or failure to meet all EDI communication needs.
10. Laws governing the interchange of EDI messages and arrangements of the parties.
11. Methods for resolving any possible disputes.
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