GRADUATION THESIS FOR BACHELOR DEGREE IN LAW MAJOR BUSINESS LAW

Peoplewill realize in a few years that they can engage into an contract over theInternet as freely, but they do not realize the legal complicatedness of it.The electronic transactions ar

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY

SCHOOL OF LAW

NGUYEN HANH NGUYEN

LEGAL ISSUES IN E-CONTRACTS: A

CASE OF VIETNAM

GRADUATION THESIS FOR BACHELOR DEGREE IN LAW

MAJOR BUSINESS LAW

HO CHI MINH CITY - 2017

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY

SCHOOL OF LAW

NGUYEN HANH NGUYEN

LEGAL ISSUES IN E-CONTRACTS: A

CASE OF VIETNAM

GRADUATION THESIS FOR BACHELOR DEGREE IN LAW

Major Business Law – Code 52380101

Supervisor: Dr.Tran Van Long

HO CHI MINH CITY - 2017

In addition, I am extremely thankful to all the authors whose works I haveconsulted and quoted in this thesis

I also express my thankfulness to all the members of my class for their kindsupport and encouragement

Since this work could not have been completed without the guidance, assistance,and support from various quarters, I sincerely thank to all those who helped me inthe completion of this thesis

Thank you!

DECLARATION



I hereby declare that this thesis entitled, ‘Legal issues in E-contract: A case ò

Vietnam’, being submitted to School of Law, University of Economics, Ho

Chi Minh city for Bachelor Degree in Law, is original and has not beensubmitted previously to this University or any other University/Institute for theaward of any degree

I also declare that any guidance for finishing this thesis is expressed inacknowledgements, and I have fully cited and referenced all materials andinformation that are not original to this paper as required by rules and conduct

The researcher

Nguyen Hanh Nguyen

VNPTCA Vietnam Posts and Telecommunication Group

Certification Authority

TRƯỜNG ĐẠI HỌC KINH TẾ THÀNH PHỒ HỒ CHÍ MINH

KHOA LUẬT

 

PHIẾU ĐÁNH GIÁ CỦA GIẢNG VIÊN HƯỚNG DẪN

Sinh viên thực tập: NGUYỄN HẠNH NGUYÊN MSSV:31121021673

Lớp: Luật kinh doanh Khóa: 39 Hệ: Chính quy

Đơn vị thực tập: Công ty TNHH Việt liên kết

Đề tài nghiên cứu:

LEGAL ISSUES IN E-CONTRACTS : A CASE OF VIETNAM

PHẦN ĐÁNH GIÁ KHÓA LUẬN

(Tối đa)

Điểm đánh giá

A Điểm quá trình

B Điểm hình thức khóa luận và tài liệu tham khảo

2 Hình thức khóa luận 0,5

C Điểm nội dung khóa luận

4 Tên đề tài - lý do chọn đề tài – Tình hình nghiên cứu 0,5

5 Mục tiêu và câu hỏi nghiên cứu – kết cấu khóa luận 0,5

6 Phương pháp và phạm vi nghiên cứu 0,5

7 Cơ sở lý luận và lý thuyết nghiên cứu 1

-PHIẾU ĐÁNH GIÁ CỦA GIẢNG VIÊN CHẤM PHẢN BIỆN

Sinh viên thực tập: NGUYỄN HẠNH NGUYÊN MSSV:31121021673

Lớp: Luật kinh doanh Khóa: 39 Hệ: Chính quy

Đơn vị thực tập: Công ty TNHH Việt liên kết

Đề tài nghiên cứu:

LEGAL ISSUES IN E-CONTRACTS : A CASE OF VIETNAM

PHẦN ĐÁNH GIÁ KHÓA LUẬN

(Tối đa)

Điểm đánh giá

A Điểm quá trình

B Điểm hình thức khóa luận và tài liệu tham khảo

2 Hình thức khóa luận 0,5

C Điểm nội dung khóa luận

4 Tên đề tài - lý do chọn đề tài – Tình hình nghiên cứu 0,5

5 Mục tiêu và câu hỏi nghiên cứu – kết cấu khóa luận 0,5

6 Phương pháp và phạm vi nghiên cứu 0,5

7 Cơ sở lý luận và lý thuyết nghiên cứu 1

CHAPTER 1: INTRODUCTION 1

1.1 Rationale of the study 1 1.2 Literature review 6 1.3 Research objective 8 1.4 Methodology 9 1.5 Limitations of thesis 9 1.6 Structure of research 10 CHAPTER 2: LEGAL ISSUES IN THE PROCESS OF ENTERING INTO AN E-CONTRACT 11

2.1 What is e-contract? 11

2.1.1 Essentials of e-contract 14

2.1.1.1 Offer 14

2.1.1.2 Acceptance 15

2.1.1.3 Intention to create legal relations 15

2.1.1.4 Free consent 16

2.1.1.5 Legal object 16

2.1.1.6 Signature 16

2.1.2 Methods of e-contracting 16

2.1.2.1 Contract formation through electronic communication 17

2.1.2.2 Contract formation through e-commerce sale websites 19

2.1.2.3 Other methods 20

2.2 Creating binding and legally enforceable e-contracts 21

2.2.1 Authentication and security 21

2.2.1.1 Electronic signature 22

2.2.1.2 Digital signature 25

2.2.2 Jurisdiction 29

2.2.2.1 The party autonomy 30

2.2.2.2 Law applicable to e-commerce in absence of agreement 31

2.3 Conclusion 32

CHAPTER 3: CONCLUSION AND SUGGESTIONS 34

3.1 Conclusion 34 3.2 Answers to the research questions

35

3.3 Suggestions

36

3.4 The final observations

38



CHAPTER 1 INTRODUCTION

1.1 Rationale of the study

The advent of technology in commercial areas has resulted in changing theliving standard of people in magnificent way Information is nowtransmitted and received rapidly and widely due to the technology Andthis is where electronic commerce grows without restriction of geographyand time Electronic commerce is involved with the purchasing and selling

of information, products and services through computers networks,usually, over the Internet It is a tool of businesses and individuals fortransacting electronically The growth of e-commerce leads to thedevelopment in the usage of electronic contracts

The cyberworld is the fastest growing market place Recent figures showmiraculous development in this commercial place In the area of business-to-customer e-commerce, an report of Ministry of Industry and Trade(MIT) in 2015 illustrates that market revenue reached 4.07 billion USD, up37% comparing to 2014 In that report, Vietnam E-commerce andInformation Technology Agency (VECITA) also shows that 62% ofVietnamese Internet users have shopped on e-commerce and the averageper capita online spending of online shoppers was estimated at about 160USD1 Another report by Vietnam E-commerce Association (VECOM) alsooptimistically estimates a substantial growth in e-commerce of 10 billionUSD by 20202

The arrangement of contracts is now in everywhere of our lives Peoplewill realize in a few years that they can engage into an contract over theInternet as freely, but they do not realize the legal complicatedness of it.The electronic transactions are not simple as an normal man or woman

1 VECITA, Vietnam E-Commerce Report 2015, 2015, Ministry of Industry and Trade, pg.23

2 [Online source]: 2020-20161029070529281.htm

http://dantri.com.vn/kinh-doanh/thuong-mai-dien-tu-dat-muc-tieu-10-ty-usd-vao-nam-thinks of To enter into an electronic contract, contracting parties shall berequired a meeting of minds, a clear offer and an unqualified acceptance ofthat offer3 An offer is clear when it indicates the offeror’s willingness toenter into a contract An acceptance is unqualified when the offeree do notseeks to vary any of the terms of the offer.

In any commercial transaction, the parties must intend to create acontractual decision with each other However, electronic environment iswhere the formation of contracts is often made between parties throughexchanging messages in electronic way without any natural or physicalcontact, so it will leads to fraud or inconsistency in the process ofperforming the parties’ obligation of contracts For instance, in Vietnam, ifsomeone would like to buy an item via facebook.com, she has to search for

it on the retailer’s page, then send messages to the retailer to purchasethat item If she wishes to buy that item, she will need to inform the sellerher name, contact, delivery details, and any other information required.After that, the product will be sent to her house and she will have to pay toreceive it However, the purchaser sometimes changes her mind, shesuddenly refuses to pay and receive the product In this situation, theseller is not able to sell his products and he also has to pay for the deliveryfee

Signing an e-contract can lead to many risks in this electronic andautomated environment when the parties refuse to do their obligations.The parties entering into an e-contract should have some means to createbinding and enforceable legal obligations between them as they wouldachieve in a written contract These means can be legal tools, digitalsignature and a trustful third party to guarantee the contract In electroniccontract, an e-commerce legislation needs to be taken into account inorder to avoid any fraud and inconsistency, to allow the contractingparties to determine what the terms of the contract are and the resultsthat the other parties have to suffer if they breach the contract

3 Andrew D Murray 2000 Entering into contracts electronically: the real w.w.w In Edwards, Lilian and

Waelde, Charlotte, (eds.) Law and the Internet: a Framework for Electronic Commerce Hart Publishing, Oxford, UK.

With the development in electronic communications, I find that it isimportant to study about the most common method of contracting in thefuture Electronic contracts are considered as the heart of development ine-commerce and electronic contracting is expected to change thetraditional access towards contract formation Studying this topic will help

me obtain basic knowledge of e-contract to prepare for the future businessafter graduating

Before continuing, it is necessary to explain the practicalities of e-contractand the terminology which was used in this research

WHAT IS E-CONTRACT?

According to article 33 of Law on e-transactions in 20054, e-contractsmean contracts established in the form of data messages provided for inthis law An e-contract is a contract which is drafted and negotiatedelectronically There are various ways of electronic contract forming such

as contract formation through email, telex, telephone, facsimile, orcontracting through websites

The first method of contracting is using electronic communication means,especially e-mail, which is the most popular way that people are aware of.E-mail is a way of exchanging electronic messages between people byelectronic means from one to another via network5 Below is a figureshowing the process of email-based contract:

Figure 1.1 – Process of contracting through email

4 The Law on E-Transactions (No 51/2005/QH11) was passed on 29 November 2005, in force from 1 March

2006 [online source] http://www.moj.gov.vn/vbpq/en/lists/vn%20bn%20php%20lut/view_detail.aspx? itemid=6109

5 Oxford Dictionary [online source]: https://en.oxforddictionaries.com/

An electronic agreement can be drafted on offeror’s computer, with orwithout attached files will be sent to an identified offeree Subsequently,the offeree emails it back to the offeror with his digital signature Thisprocess usually takes minutes or, at the most, a few hours for an e-mail toreach its recipient

E-mail has several disadvantages to go along with its advantages thatmake it a challenging way to arranging a contract It would take a greateffort for someone to access your important hard copy contracts anddestroy them, but all of your e-mails or important document which werestored on e-mail software or on another server can be easily lost due to ahard-drive crash

Most people are less familiar with the second method of contracting; “click

to agree” e-contract, which was used on the websites or packaged with thesoftware products A “click-to-agree” agreement is a type of contract that

is widely used with online transactions and software licences in which auser must agree to terms and conditions prior to buying or using theproduct No printed file is typically created nor is the physical signature ofthe Internet user generally required A simple case of contracting throughwebsite is illustrated in the figure below:

Figure 1.2 – Process of contracting through websites

When a consumer goes to the retailer’s website and purchasing an item.After adding that item to basket, if the customer wish to purchase it, he has

to click “I Agree” or “I Accept” to the terms and conditions and provideinformation required to indicate his intent to be bound by the terms of thecontract As soon as the purchaser’s order has been placed, he will receive

an email confirmation which shows a summary of the buyer’s order Andthat is the way in which a electronic contract can be made throughwebsite

SECURITY AND AUTHENTICATION

In any commercial transaction, without authenticating the parties’identities and, possibly, their locations, there is no legal transaction thatcan be made because the contracting parties must be absolutely certain ofwhom they are dealing with when indicating their willingness to be bound

in a contract Failure to establish the identity of the transacting parties canlead to deception But, establishing identity is a serious issue in long-distance and cross-border electronic environment where the identity andthe location of the other party is not apparent on the face of thecommunication

To establish confidence in electronic transaction by avoiding parties fromdenying their messages that they have sent electronically in an contract, anumber of systems have been deployed to allow parties to establish theidentity of whom they are contracting with All these systems use signalingcode in various ways and require confirmation by certification authority According to article 3 of the Decree No 26/2007/ND-CP6, certificationauthority means an e-signature-certification service-providingorganization, which provides digital signature-certification services It is atrusted third party on whom all the parties to a contract can rely upon toverify the identities of the others and the electronic messages sent fromthem As mentioned above in a contract formed through email, whensomeone receives a document to sign via email, a digital signature will be

6 Decree No 26/2007/ND-CP on detailing the implementation of the Law on e-transactions regarding digital signatures and digital signature-certification services, issued on 15 Feb 2007, in force from 14 March 2007 [online source] http://www.moj.gov.vn/vbpq/en/lists/vn%20bn%20php%20lut/view_detail.aspx?

itemid=4172

required to assure the contracting parties that it comes from a reliablesource And that digital signature must be verified by a trustfulcertification authority through issuing a digital certificate In our country,Vietnam Posts and Telecommunication Group Certification Authority(hereinafter to referred to as ‘VNPTCA’) is the first entity that had beenissued a license to provide digital certificate by the Ministry of Informationand Communication.

JURISDICTION AND CONFLICT OF LAWS

Many electronic contracts are transnational contracts The greatestachievement of the Cyberspace7 is the development of a global marketplace Cyberspace is a boundless wonderland for international purchasers

A trader in Ho Chi Minh City can reach his clients in New York as easily asone in the same city through webpages or e-mails

As electronic commerce becomes international commerce, the problem isthat major legal issues will occur in cross-border electronic contract,questions to which laws are applicable to that transaction or to any partswhich are undertaken in it

In an effort to provide harmonization to stimulate electronic commerce,Vietnam adopt the United Nations Commission on International TradeLaw (hereinafter referred to as ‘UNCITRAL’) Model Law on ElectronicCommerce8 by passing the Law on Electronic Transactions in 2005.Following the 2005 Law on E-Transaction, the Government issue severallaws to boost e-transaction On May 16th, 2013, Vietnam governmentissued Decree No 52/2013/ND-CP on e-commerce9 which mainlycomprises provisions to establish a legal frame for clear and faircompetition-based e-commerce transactions These laws set out a

7 As written in Oxford Dictionary, Cyberspace means the notional environment in which communication over computer networks occurs [online source]: https://en.oxforddictionaries.com/

8 [Online source] https://www.uncitral.org/pdf/english/texts/electcom/05-89450_Ebook.pdf

9 The Decree No 52/2013/ND-CP was issued on 16 May 2013, in force from 1 July 2013 [online source]:

http://www.vecita.gov.vn/vanban/70/Decree-No-52%E2%81%842013%E2%81%84ND-CP-on-e-commerce/en

legislative framework to eliminate the conflicts for businesses andindividuals when engaging in electronic transactions

1.2 Literature review

Prevelance of E-commerce

Technological advance has had a great impact on social life One principalcontribution of technology is in the field of contract formation Andelectronic contracts are born out of the need for speed, convenience andeffectiveness

An article of Japhet E.Lawrence and Usman A.Tar (2011) investigates theinfluence of e-commerce on commercial market place, especially indeveloping countries Electronic commerce offers opportunities to bothdeveloped and developing countries Millions of people worldwide use theInternet to do everything from research to purchasing products The use ofelectronic communications and the internet can make the process ofpurchasing easier, faster and less expensive

Definition and formation of E-contracts

Singh, Ravindra Kumar (2015) define e-contract as an contract which isformed in a cross-organizational business progression by thecomputerized facilitation or automation

A research of Cooperative Research Centre (as known as ‘CRC’) forConstruction Innovation10 (2007) illustrates that there a various differentways that can be used to form a contract electronically The type offormation which is used to carry out an e-contract depends on aspectssuch as the needs and the intensity of entities and the period of time inwhich the project must be completed Singh (2015) shows therequirement of ‘offer and acceptance’, which is an answer to the questionswhether an entity is bound by an online contract, when and where acontract is formed, in contract formation with every electronic modes of

10 CRC Construction Innovation is a Australian research, development and implementation centre focused on the needs of the property, design, construction and facility management sectors.

contract formation Each method of contracting has its own merits anddemerits, so the party who selects the means of contracting should bearthe consequences of any fraud and inconsistency in the electronic contract.

Legal issues in E-contracts

Samtani Anil (2001) examines the impact of legislative framework onperforming an e-contract A harmonized legal foundation is necessary toanswer the question whether such a contract is allowed by a current law.According to Samtani Anil, many governments and regulatory bodies inAsia have recognized the economic potential of electronic commerce andare considering the legal framework to encourage the development ofelectronic commerce The enactments of laws attempts to deal with theemerging legal issues that electronic commerce raises

In a related research, Praveen Gauravaram and Ernest Foo (2006)indicates that the parties should consider to use some securityrequirements when contracting in electronic commerce These securityrequirements generate confidence by minimizing abuse by the contractingparties in electronic environment

In comparison with papers listed, my main attention of this thesis will bedevoted to legal issues of e-contracts in Vietnam position In the period of2005-2017, Vietnam Government has passed laws aimed at completing thee-commerce legal framework, but, there is no specific law on e-contracts

My thesis will be focused on legislative attempts to perform an electroniccontracts by analysing related regulations in Vietnamese scenario Inaddition, I also demonstrate on the way in which the Vietnamese Internetusers should use to enforce the others to do their obligations whenengaging in an electronic contract

1.3 Research objective

The objective of this study is to research and analyse legal issues in contracts regarding its formation, types, performing, especially creatingbinding and legally enforceable obligations between parties to transaction

e-In addition, I will illustrate jurisdictional issues of electronic contracts,those are, how should contracts be formed and controlled, which legalsystems should be used to regulate them and how should contractingparties enforce the others to do their obligations.

Rapidly changing technology means that we have to keep up withchanging times as best as we can Studying this topic would results inachieving the tremendous revolution when engaging in e-commerce

During study this topic, I would make an effort to answer the followingquestion:

(a)What is e-contract?

(b) What are different ways to form an e-contract?

(c)What are legal issues in e-contract?

(d) What tools is suggested to bind the parties when engaging in

an e-contract?

(e)How should the parties solve the issues when entering in an contract?

e-(f) What are the global frameworks?

(g)What are the legal frameworks in Vietnam?

To answer the proposed research question, I would utilize qualitativemethods The qualitative research originated from analysing regional andinternational legal framework helps me have a brief view on the conflict oflaws and difficulties of the parties when entering a contract With this type

of method, I will have a clear understanding on the targeted topic Inaddition, examining the related cases about e-contracting helps me to getinsight a complex issue and to analyse several events or conditions andtheir relationships in detail This helps me to learn an integral areapertaining to e-commerce, as well as in trade law generally

of this paper to give an extended discussion Future research would havebeen more convincing if the researchers have related more factors to solvethe other issues in e-contract.

The second limitation is the methods of this research Because quantitativemethods were not used in this research, it was not possible to explore theneeds of Vietnamese internet users on using online contracts Had it beenpossible to include both quantitative and qualitative methods in thisresearch, better insight view may have been gained into learning about theproblems of which Vietnamese internet users concerned when theyengage into an electronic contract

The last limitation in this research regards to the lack of domestic priorresearch study of e-contracts Related research studies help to form theliterature review and lay a foundation for learning the topic of this study Ihave to develop an entirely new research on this topic due to a lack ofdomestic researches But this limitation can serve as an opportunity todevelop the more complete research in future

1.6 Structure of research

This research consists of three chapters:

Chapter 1 will be the introduction to the topic This chapter provides thebackground information of electronic commerce and contracts It showsthe brief view on the development of e-commerce and the practicalities of

e-contracts in Vietnam commercial market place In addition, it providestheoretical and empirical framework of the research by analysing some e-commerce reports and related researches.

Chapter 2 is the most essential part of the paper At this point, the variouselements are taken into account, clarified in accordance with legal issueswhen entering in an e-contract This part will be supported by some casesstudy about each way of forming an online contract and the results thatthe contracting parties have to suffer when breaching a contract

Chapter 3 will be the conclusion section of this paper which is thesummary of the main points made in the previous chapter This partensures a development of the research ability towards a positive outcome

CHAPTER 2 LEGAL ISSUES IN THE PROCESS OF ENTERING INTO AN E-

CONTRACT

It is known to everyone that computer is amongst the greatest moderninventions of humankind In addition to computer, the advent of internethas brought drastic change in field of information technology The Internet

is used mainly for dispute resolution, communication, sending mails,online messaging, etc Out of these, electronic commerce is one of thesignificant features of internet

The term ‘E-commerce’ is ‘basically defined as the application of electronic means in business and commerce’11, it includes all the activities ofbusinesses or individuals such as buying and selling products and services

by using communication technology With the development of

e-11 Vietnam E-Commerce and Information Technology Agency 2014 Vietnam E-commerce Report Ministry of

Industry and Trade p.g.05

commerce, a seller can sell his products all over the world and the buyerhas boundless choices to reach any sellers

New communication systems have replaced the traditionalcommunication systems, and electronic contract are born out of the needfor speed and convenience

In this chapter, the focus will be on the legal issues in the process ofentering into an electronic contract, such as legal validity of electroniccontracts, different modes through which e-contracts are concluded andtools used by contracting parties to create an binding and legallyenforceable obligation between them

According to Ravindra Kumar Singh, ‘an e-contract is the computerized facilitation or automation of a contract in a cross-organizational business progress’12 It is also created and negotiated by electronic tools Electroniccontract is also modeled, enacted, controlled, monitored, concluded andterminated by a software system, (partly or fully) Singh assumes that ane-contract is equivalent to traditional paper-based contract except theirways of contract forming

On the other hand, Ambika S.Patil believes that the traditional definition ofcontract cannot be applied to electronic contract, because the realm ofelectronic contract is merely different from traditional contract.13 E-contract is any transaction which is made on internet by transactingparties, so it is under the terms of different regulations to the hard copycontract People do not have the same concerns for negotiating anddrafting contracts in the electronic contracting as they do in traditionalways

E-contract can also be defined as below14:

12 Ravindra Kumar Singh 2015 Conception of contracts in the era of information technology a critical study and appraisal of the diverse aspects of the electronic contracts Gujarat University page.82

13 Ambika S.Patil 2015 Legal regulation of E contract In India an Indian perspective Gujarat University.

page.48

14 [online source] https://definitions.uslegal.com/e/e-contract/

E-contract is any kind of contract formed in the course of commerce by the interaction of two or more individuals usingelectronic means, such as e-mail, the interaction of an individualwith an electronic agent, such as a computer program, or theinteraction of at least two electronic agents that are programmed

e-to recognize the existence of a contract

In 2005, to promote the rise of electronic commerce, Vietnamesegovernment has passed a new legislation, namely Law on E-transaction

2005 (hereinafter referred as LOE) The law came at the right momentwhere there is a need for a legislative framework for facilitating therapidly use of commercial electronic transactions

The LOE refers to ‘electronic contract’ as ‘contracts established in the form

of data messages’ The term ‘data messages’ is defined in the definition article of LOE as ‘information created, transmitted, received and stored by electronic means’ In broader view, the law defines electronic contract as a

contract which is formed electronically, through information andcommunications technology(as known as ICT) It does not defineelectronic contract as a contract which has particular objects in electronicforms

However, the definition of electronic contract in LOE is different fromprovision in UNCITRAL Model Law on Electronic commerce UNCITRALModel Law has not provided any provisions to define electronic contract, itonly sets out the basic legal rules for electronic contracting These rulesconcentrates on issues that has to be undertaken in order to formcontracts electronically, such as formation of contract, legal recognition,attribution of data messages, acknowledgement of receipt and legal effect

of each stage of forming an electronic contract

As also provided in Law on E-transactions, contract which is formedelectronically shall not be denied legal effect, validity or enforceabilitymerely because it is expressed in electronic form The law states clearly asfollows:

(i) Information in data messages shall not be declined its legal

validity due to expression through electronic communication

methods [article 11];

(ii) Data messages shall be considered as valid as written documents

if it is accessible and usable for reference when necessary [article 12];

(iii) Data messages shall be regarded as legal as original copy if the

contents of data messages are granted original and unchanged,

except for appearance changes [article 13];

(iv) Data messages shall be referred as valid as evidence if it is a

meeting of provided requirements [article 14].

The above provisions are correspondence with a provision which iscontained in Electronic Signatures in Global and National Commerce Act(as known as E-SIGN) 200015 The provision in E-SIGN states that ‘no contract, signature, or record shall be denied legal effect solely because it is

in electronic form’ It is also provided in UNCITRAL Model Law that

‘Information shall not be denied legal effect, validity or enforceability solely

on the grounds that it is not contained in the data message purporting to give rise to such legal effect, but is merely referred to in that data message”.

These provisions deals with the validity of contractual intention expressed

by ICTs and declares that these cannot be denied on the sole ground thatelectronic record was used to transfer them

Electronic contract is sometimes described as ‘online contracts’, however,e-contract is not similar to online contract due to its broader definition.Online contracts is only created by using online function In contrast tothem, e-contracts may be made by exchanging digital records or electronicmessages via software system, network or Internet, like Short MessagesService16 (SMS), Multimedia Message Service17 (MMS), audio file, e-mails

15 The E-SIGN Act, also known as the “Millennium Digital Commerce Act”, was signed by President Bill Clinton

by an electronic signature on Jun 30, 2000 and went into effect on October 1, 2000 [online source]:

https://www.gpo.gov/fdsys/pkg/PLAW-106publ229/pdf/PLAW-106publ229.pdf

16 SMS stands for short message service and is also called texting or text messaging [online source]

http://www.bbc.co.uk/webwise/guides/about-sms

17 MMS messaging, which stands for multimedia messaging service, takes SMS text messaging a step further

by allowing for longer lengths beyond the traditional, 160-character SMS limit [online source]

through mobile phones, tablets or computers Electronic contracts cannot

be restricted to a transaction over the Internet Besides the Internet,people can conclude an e-contract by any kind of a computer network

2.1.1 Essentials of e-contract

A brief view of e-contract elements is crucial in this chapter Sinceelectronic contracts have the same requirements as traditional contract, itrequires several necessary elements Once all elements are matched, it will

be a valid contract

2.1.1.1 Offer

The Vietnamese Civil Code 201518 states that an offer is ‘a clear expression’

to show the offeror’s intention to engaging into a contract and be bound bythe contract obligations In addition, the Decree No.52/2013/ND-CPassumes that an offer is made by the customer when he sends the seller anelectronic document by using online function

As in any commercial transaction, an offer must be made to form anelectronic contract However, the offer is not made directly face-to-face inautomated environment The consumer searches the goods and servicesdisplayed on the seller’s website and then chooses what he would like tobuy Or he can offer for the goods by sending messages to the vendorthrough electronic communication methods

2.1.1.2 Acceptance

An offer needs to be accepted to create agreement As stated in Article 17

of Decree No.52/2013/ND-CP, and an acceptance of an offer is made whenthe vendor responds to accept it through online function However, thelegislators have only provided provisions of time and place of sending andreceiving date messages instead of time of entry into electronic contracts.This will lead to disputes when performing electronic contract because the

https://www.lifewire.com/what-is-mms-picture-messaging-578671

18 Civil Code 2015, issued on 24 Nov 2015, enforced from 1 Jan 2017 [online source]

http://thuvienphapluat.vn/van-ban/Quyen-dan-su/Law-No-91-2015-QH13-The-Civil-Code-303230.aspx

time of entry into e-contracts play an important role to claim e-contracts’effect by providing the answer to the questions whether or not thecontract is formed, and when the contract is formed

As many paper-based contracts, an electronic offer can be revoked at anypoint of time before it is accepted However, in some cases of formingcontract through e-commerce website, where the vendor immediatelyfollows the placing of customer’s order and fulfills his duty after accepting

it, the buyer cannot withdraws his offer due to time constraints

2.1.1.3 Intention to create legal relations

This phrase can be defined as an intention to be legally bound Itconstitutes one of the most necessary conditions of a valid e-contract.There is no intention of the parties to create legal relationship, then nocontract is undertaken between them This condition is satisfied when theparties to agreements intended that it should be governed by law Itresults in creating legal obligations between transacting parties andconcerning to the law of remedies when the other parties breach thecontract

2.1.1.4 Free consent

Article 26 of Decree No.52/2013/ND-CP clearly states that an agreement

in electronic commerce must be established on the basic of free consent.Consent is considered to be free and genuine when the parties doubtlessshow their consent to the agreement It represents their willingness to,acceptance of, agreement to entering into the contract Free consentcannot be caused by fear, misconduct, duress or fraud In other words, incyberspace, where there is no physical connection between thecontracting parties, a real agreement cannot be made when the partiesunintentionally entered into the contract For example, D offers B entering

a contract via email, then C uses B’s email to accept that offer without B’sawareness In this situation, genuine consent cannot be given because Bdoes not voluntarily accepts the offer on his behalf

2.1.1.5 Legal object

It is written in Article 26 of Decree No.52/2013/ND-CP that object of thecontract must be lawful and not contrary to the rules of public policy Thecontracting parties are free to form a contract, but it must not be violated

to any provisions of law and not against to cultural traditions, nationalethics Thus, an agreement for selling weapons or opium online is void

2.1.1.6 Signature

Similar to signature in traditional contract, an electronic signature isconsidered as the identity of its creator An electronic signature and ahandwritten signature are particularly equivalent, and the contractingparties can bring both of them to trial Its legal validity will be discussedlater in chapter 3

2.1.2 Methods of e-contracting

In cyberworld, people are now able to form agreements in instantaneousways through computerized device However, the way in which anelectronic contract can be arranged is the same as a traditional contract:invitation to treat, offer and acceptance

According to Article 33 of Law on E-transaction 2005, electronic contractcan be established in various methods, such as electronic documents, e-mails, facsimiles, telegrams and other similar forms The law stipulates theprimary requirements to bind an electronic contract but it is not required

to be formed by any specific method or to be in any exact form

As written in Chapter 1, there are two vital way which usually used in theelectronic contract formation An e-contract can be created either throughelectronic communication or by accepting to a completed document on anonline website Both methods of e-contracting can be dealt with byapplying terms of Vietnamese law

2.1.2.1 Contract formation through electronic communication

A contract which is made by transferring electronic messages may beknown as a electronic version of a contract which is made by exchangingdocuments through the post office In cyberspace, offers and acceptancescan be exchanged totally by e-mails, or can be combined with facsimiles,telephones, etc

(i) Telephones:

As mentioned before, Vietnamese lawmakers refer electronic contract as

an exchange of electronic documents It is clearly stated in Article 3 ofDecree No.99/2011/ND-CP19 that a contract concluded between aconsumer and a trader via electronic device and telephone is construed as

a long-distance contract It means that the lawmakers assume thattelephonic contracting is not the same as electronic contracting They areseparately defined as two different kinds of distance contracts despite thefact that telephone can be regarded as an electronic communication.Contracting parties now possibly not only speaks on the telephone butrecords the conversation on a tape Telephones today have visual camerasadded to them which helps the transacting parties seeing each other

Telephonical contracting seems to be a form of instantaneouscommunication of messages, and it meets all the conditions to be regarded

as a method of electronic contracting The Vietnamese regulators shouldjointly provide a decree for regulating all of them instead of separating.(ii) Facsimiles transmissions:

Fax messages seem to hold a transitional position between postal andinstantaneous communications The sender does not have to take thedocuments to the post office but he can send them from anywhere through

a fax machine

19 Decree No.99/2011/ND-CP on detailing and guiding a number of articles of the Law on Protection of Consumer Rights, issued on 27 Oct 2011, enforced from 15 Dec 2011 [online source]

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