Page 119 - DCAP306_DCAP511_E-COMMERCE_AND_E-BUSINESS

E-Commerce and E-Business

9.1 Legal Issues

The world is comfortable using signed paper documents for conducting business and commerce. From
past two millennia, commerce has been done based on the written document with the value
‘authorized’ by the signature of an authorized officer. Present legal practice has paper documents and
signatures affixed as a foundation. Electronic documents and messages have changed the scene without
the familiar signatures and marks, and the trading world wants to be sure about safety in the electronic
world. Therefore, e-commerce system should offer at least the same level of reliability as that of paper
world, notwithstanding the important differences between the concepts embodied in electronic
messages and paper documents. In the traditional paper-based commercial transactions, fraudsters can
forge the signatures, numbers, and impressions. Emblems and seals too are unsafe as they can be
tampered too. The trade and legal community knows how to deal with such kind of problems.
Companies keep aside funds to take care of the losses due to such frauds.
On the other hand, the electronic world gives exposure to issues that were unknown earlier. These
issues are directly the outcome of creating documents electronically, transferring them over worldwide
computer communication networks. Trading partners who exchange the documents electronically will
have to convince themselves that such kind of documents are authentic when it is received over
networks and that their authentication can be recognized in case of dispute.

Transactions can be electronic but the main concepts of admissibility of evidence and evidential value of
electronic documents will remain the same. The authenticity of the message needs to be intact while
exchanging it with another user. Also, it needs to be secure so that it will not be intercepted by any third
party. The electronic message is independent of the actual medium used for storage of transmission.
The message can be stored in a floppy disk or an optical disk. It may be transmitted over a local area
network, a Virtual Private Network (VPN) or the Internet. The physical medium can be a coaxial cable,
an optical fiber, a radio link, or a satellite communication channel.
The security of an electronic message, which is a legal need, will be directly linked to the technical
methods for the security of computers and networks.

Legal issues of e-commerce have generated tremendous interest among technologists, legal experts, and
traders. Many of the early e-commerce experiments and production systems have gone into operation
without any legal interchange agreement between the trading partners or between the network and
their customers.
9.2 Paper Document vs. Electronic Document
In the 21 st century, many businesses and individuals have switched to electronic documents as
computer technology continues to advance. Electronic document helps in reducing paper and saving
time, so the risks are worth considering.
Electronic document refers to files, which are stored on a digital device like computer as opposed to
papers that might be stored in file cabinets or folders. Electronic storage is usually less costly than paper
storage. This can provide security like password protection, which allows easy sharing and accessing of
the files. This also saves time and space.

A company can restrict access to the contents displayed on its Web site using a
password or login code.
Apart from the benefits of electronic document, there are two major risks:
1. Loss of files
2. Security breaches

Files such as financial data can be lost due to virus attack.

Files can be lost or corrupted due to system crash or any other problem. The risk of losing files can be
eliminated or greatly minimized by saving multiple digital copies of files on several computers in

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