The Electronic Commerce

March 21, 1997
Study Group on the Legal System of Electronic Commerce

1. Preface

1 Establishment of the Study Group on the Legal System of Electronic commerce

(1) Along with the rapid development and spread of the information equipment and the means of communications, "electronic commerce" (in which information on transactions such as proposals and consents for a sales contract are exchanged electronically) and "electronic applications" (in which applications and reports to public offices and agencies are electronically filed) have already been carried out in some fields and they are expected to increase in the future.

(2) Since the parties involved in electronic transactions or application are not facing each other, a system to identify the other party or the applicant is required. In electronic commerce, in particular, it is expected in the future that transactions between or among unspecified enterprises and between enterprises and consumers will increase. In such transactions, where parties are not limited in advance, it is impossible to know who the other party is or to determine how to identify the other party in advance. For this reason, there will be growing need for a system to identify the other party.

On the other hand, the statement "To Simplify the Public Office Procedure" regarding applications and reports submitted to public offices published by the cabinet in February 1997. The statement proposes to realize electronic applications and reports to the public offices by the end of this century to simplify the procedure for them. In such procedure, other than cases where applicants are limited to those who have some specific qualifications, applicants cannot be registered with public offices in advance. So it is indispensable to establish a system to confirm the identity of applicants in order to realize electronic applications.

In addition, as electronic data can be changed easily, a system to prevent changes of the data concerning transactions or applications will be required. It is also necessary to adopt means not to allow information on transactions or applications to be leaked.

(3) In addition to the need for establishment of such systems, there are many issues to be studied from the standpoint of the Civil Code, the Commercial Code and the Civil Proceedings Act. For example,

When the contract is deemed to be concluded?

How it should be interpreted in legal sense when erroneous figures were input, or when electronic data disappeared while the data was being transmitted?

Can the electronic data be substituted for written documents when the issuance or conservation of written documents is required?

What procedure should be taken when electronic data are submitted to a court as evidence?

What is the legal nature of electronic payment systems such as electronic money?

(4) In order to deal with such problems, the Civil Affairs Bureau of the Ministry of Justice established the "Study Group on the Legal System of Electronic Commerce" as the study group organized by the Director of the Civil Affairs Bureau. The Study Group has researched various sorts of issues related to electronic commerce from the standpoint of the Civil Law and the Commercial Law, looked into the need for legislation and improvement of the existing systems which could be associated with electronic commerce such as the notary public system and the commercial registration system.

The Study Group consist of law scholars, law practitioners, experts on cryptography and telecommunication and other persons who have academic knowledge on electronic commerce. The committee members of the Study Group are listed in the page 4.

As the Study Group planned to study two major subjects described in (2) and (3), the group established two subcommittee: the System Subcommittee and the Substantive Law Subcommittee. The former was designed to study on the system to realize electronic authentication and the latter was designed to study the legal issues related to electronic commerce and the necessity for the legislation. Each committee member has belonged to either of the Subcommittees.