Until receiving further instructions from the originating party, the receiving party is not to act upon the Message pursuant to Section 3.2.2. Therefore, the parties remain, in most circumstances, in a neutral position until they have had an opportunity to communicate. The instructions might be given by phone, facsimile transmission or delivered paper documents.
Second, for the originating party, who expects a required acknowledgement, in the absence of the acknowledgement and having given no further instructions, the originating party may declare the Message to be null and void by giving notice. Such notice must comply with the requirements of Section 7.6. This right only arises for Messages which have been "properly transmitted" in the first instance.
Since certain types of Messages may have legal effects not favourable to a receiving party (for example, a notice of defective goods sent to a seller), Section 3.2.2 does not permit the receiving party to deprive a Message, when received, from having legal effect by failing to send a required acknowledgement.
Under Section 3.2.3, the receiving party is only excused from sending a required acknowledgement when the identity of the intended recipient cannot be determined from the original Message; to determine that identity, all of the components of a Message should be examined, but no further diligence is required.
Section 3.3. Technical Errors
In the event circumstances exist which prevent the further processing of a Message, Section 3.3 requires a receiving party to give notice to the originating party. These circumstances may include system malfunctions, but also include technical errors in the received transmission. The obligation to notify an originating party under those circumstances exists even for Messages as to which acknowledgement has not been required.
SECTION 4: VALIDITY AND ENFORCEABILITY
Section 4 declares that the trading partners signing the Agreement intend for valid and enforceable obligations to result from their EDT communications. It addresses the critical legal aspects of using EDT in international trade.
Section 4.1. Validity
Certain national laws may permit a trading partner to object to the validity of certain communications on the basis that a writing or signed writing is otherwise required. Section 4.1 of the Agreement makes clear that the validity of a transaction may not be challenged by either party because it was EDT in nature. This provision may not always be enforceable under some legal systems; the choice of governing national law under Section 7.1 may be influenced by this consideration.
In considering that the use of EDI results in the elimination of written signatures, parties are encouraged to evaluate the security procedures and services which may be selected and used between the trading partners. Though electronic signatures may be acceptable between the parties and specified in the Technical Annex, no assurance can be given that all electronic signature services will perform all of the same functions (including legal functions) as traditional signatures used in similar contexts.
Section 4.2. Evidence
Section 4.2 specifies the intent of the parties that the records of Messages maintained by the parties shall be admissible and may be used as evidence. The Agreement acknowledges that national laws may differ, however, as to the extent to which parties may specify for judicial proceedings the acceptability of certain types of evidence.
Section 4.3. Contract Formation
Section 4.3 defines when a contract to be concluded through the use of EDT shall be deemed to be formed. Determining the time of formation is often important for legal purposes. Although rules have been generally defined for contracts concluded by mail or telephone, uncertainty exists as to contracts concluded through the use of EDI. The rule established by the Agreement ensures the predictability and expectations of the trading partners.
Under Section 4.3, and consistent with Section 3.1, the Message sent as an acceptance of an offer forms the contract when received. This "reception rule" is consistent with the provisions of various national and regional model agreements in use and prevailing EDT commercial practices.
SECTION 5: DATA CONTENT REQUIREMENTS
Section 5.1. Confidential Status
The exchange of information in commercial transactions often requires the communication of confidential data relating to the business of trading partners. The underlying agreements will usually define the obligations of the parties with respect to how that data will be handled. The applicable national laws may also define certain responsibilities regarding the confidential treatment of information. Parties are encouraged to assure that their treatment of the confidentiality of information in electronic form is equivalent to the same information communicated pursuant to other media.
Under this Section, the content of Messages will not be considered as confidential in the absence of a different designation. The trading partners can identify the confidentiality of information included in their Messages through the Technical Annex or in a specific Message.
