Analyzing the issue of electronic contracting, it can be stated that most of the people who are regularly using personal computers and internets already participated and confirmed their advantages of such approach. Most of the people have at least once signed an electronic contract, even if they were not aware of such factor. Instances of installing particular software, using services of a specific website, and buying from electronic store, imply agreeing on terms and conditions of a contract and accordingly implied a transaction, if the product or a service was not free.
In that regard, it can be assumed that such instances of buying or using retail products would not contain much controversy in solving disputes, although it will not exclude such cases. Nevertheless, when electronic contracting is related to business-2-business deals, and where contract agreements require more than just clicking on the “I agree” button, the issue of electronic might have far more impact and accordingly potential hidden pitfalls. This paper examines the issue of electronic contracting providing a brief analysis of the long term impacts of electronic contracting and potential pitfalls.
One of impacts of electronic contracting can be seen in the sufficient increase in the efficiency of business transactions, specifically in the cases of international trade. Such consequence can be logically expected, as in case the standards of the electronic contracting will be settled, business deals can be agreed upon and completed in minutes. Thus, the use of IT in business-to-business contracting processes will most likely result in optimization and globalization through improving the speed, efficiency and reach of the business processes (Angelov & Grefen, 2001).
Another possible impact of electronic contracting can be seen through the security requirements for making transactions. In that regard, it can be predicted that a whole sector in the security industry will emerge as one of the most demanded in the electronic business. The security issues are of special concern to the e-business today, thus, it can be assumed that in case electronic contracting will be the most frequent option in business, the demand for security solutions will increase sufficiently. Additionally, a rise can be predicted in the services of 3rd party online witnessing and authentication, such as Data Witness SignOff (Datawitness, 2009).
The pitfalls of electronic contracting can be predicted in several issues. One issue can be seen in the differences in the jurisdiction of different countries on electronic contracting. For example, cases when a deal should be made between a country which have an electronic contracting law and a country which does not, the options are to chose either a jurisdiction where the contract will be interpreted and enforced, a process that might require long negotiation, or using a paper contract (ABANET Newsletter, 2002). Such differences might lead to that the process of negotiating and confirming the rules and the type of legal agreement to be followed will eliminate any efficiency advantage of electronic contracting. This statement can be specifically true for single operations, in which the partners intend to sign a one-time deal.
Another possible pitfall for electronic contracting can be seen through the requirement of specific technological standards, which potentially might differ from country to country. Accordingly, the introduction of new technologies will result in certain countries transferring their operations to the standard, while the others do not, which might create a disagreements between the parties when conducting a deal. It can be assumed that the introduction of universal standards might be a solution, but nevertheless, the differences in specifications between the vendors can still be a problem.
It can be concluded that electronic contracting is a perspective approach, which is already being implemented in the sphere of business. The analyzed impacts and potential pitfalls, even if taking place, will not hinder the development in that direction. The current growth of e-commerce demonstrates a demand for electronic contracting, and therefore it will certainly be fulfilled.
References
ABANET Newsletter (2002). E-Contracting Guidelines. American Bar Association. Web.
Angelov, S. A., & Grefen, P. W. P. J. (2001). A Framework for Analysis of B2B Electronic Contracting Support. CTIT technical reports series.
Datawitness (2009). Electronic Signature: Increasing the Speed and Efficiency of Commercial Transactions. Datawitness Online Ltd. Web.