Levan Kokaia – Guest lecturer at Georgian Institute of Public Affairs (GIPA)

Nowadays internet trading has the high indicator as a platform of buying and selling goods and services. Different purchase agreements, signatures and other related issues transformed in the electronic space, which makes new legal requests as for the business sector and for customers. When the origination of the contracting parties belongs to the different country, the legal regulation of e-contract will have character that is more complex. Namely, considering the high comfort of e-commerce there are more legal risks to protect contractual parties’ legal security. To avoid these negative aspects, different states have enacted special legal regulation to recognize and defense electronic legal transactions. To ensure the legal security of each party through the e-commerce there are several aspects, which have to consider by all party. One universal law because of the complex character of the electronic legal communication does not regulate these aspects.

This paper describes the legal nature of e-commerce, existing Georgian legal mechanisms protecting the parties of e-commerce and highlights the necessity of elaborating a new law of e-commerce.

1. Nature of e-commerce

Electronic commerce consists of buying, selling, preparing or exchanging goods, services and information through the internet.
There are three main forms of E-commerce:
1. Consumer-to consumer transactions (C2C);
2. Business-to-consumer transactions (B2C);
3. Business-to-business transactions (B2B).

Electronic contract is the main legal mechanism to regulate the transaction via internet.

The forms of e-contracts are most commonly as “Click Wrap” or “Web-Wrap” contacts. These forms require the contracting party (user) to familiarize with the conditions of the contract and to accept or deny these conditions by taking some technical actions (for example clicking on the “I accept” or “Deny”).

As a rule, different web pages or software products introduce “Click-Wrap” agreements, while “Browse-Wrap” agreements consists of the main legal conditions for the user.

These conditions are for the appropriate web panels and in many cases; the user has not an opportunity to negotiate with the party for the purposes of changing one or another point of the electronic agreement. This situation is actual to protect the customer’s rights, as the customer should accept or deny the conditions.

Effective legal mechanism should provide the balance between the administration of the web page and the customer.

2. Objects of legal protection through the e-commerce dealings.

The strategy of regulating one or another agreement is depended on the legal nature of the agreement. With the classical legal aspects, it is important to consider all of the technical processes, which indicates the legal force of the electronic agreement.

In any case, the effective legal mechanism of e-commerce should consider protecting three objects:
1. To adequately defense the rights of the users;
2. To foresee and defense the rights of the business entity, which introduces its material products or services for indefinitely potential customers;
3. To ensure all of the general legal provisions which are equally vital for both parties.

Users’ legal protection is mainly concentrated to the free delivery of information. This information should include all aspects of the payment and getting the good or service systems. With the free delivery of information, the personal data of user is one of the main aspects while dealing electronic agreement.

Protection the intellectual property rights is the central issue to protect the e-commerce business entity party, which introduces good or service. Namely, an effective mechanism should differ issues of intellectual property rights-holders and users and to ensure the impact of Internet technology on the protection of intellectual property rights.

Parties’ general interest includes in ensuring the technically secured space of e-commerce, identify the mutually acceptable dispute resolution forum and correctly define the taxation issue.

3. Georgian existing legislation and some perspectives

The main legislative normative acts in Georgia, which regulates e-commerce issues, are the following:
1. Constitution of Georgia;
2. Civil Code of Georgia;
3. Law on international private law of Georgia;
4. Tax Code of Georgia;
5. Law on protecting the personal information of Georgia;
6. Law on trademark of Georgia;
7. Georgian patent law;
8. Law on electronic document and electronic trusted service of Georgia;
9. General administrative code of Georgia.

These laws separately regulate different aspects of e-commerce process.

There is initiated the draft law of Georgia on “electronic commerce”. The main reason of elaborating such law are the following:
• To develop the e-commerce industry in Georgia;
• To compliance Georgian legislation with the requirements of the EU Agreement on deep and comprehensive free trade area;
• To regulate internet service provider’s activity.

For the purposes of this paper it is important to indicate, that from 2012 Law on protection of consumers’ rights of Georgia is invalid and there is no consolidated legal regulation to protect any kind of consumer’s’ rights. This gap negatively reflects on the effective e-commerce environment. Considering the fact, that via internet, the offered agreement is the product of the business entity and there is no chance to change or negotiate one or another provision of this agreement, to protect the user’s right is quite vital for bilaterally protected agreement.

The draft law specially consists of the provisions to solve this problem. Besides, this law will ensure the general standards of elaborating and treating the electronic agreement and the legal responsibility of intermediate deliverer of information.

4. Conclusion

All types of the electronic agreements face the problems regarding to the effective protection of the contractual parties. Separate legal regulations do not satisfy the new requirements of the fast growing e-commerce demands. In case of dispute if the party, which gives an offer of agreement via internet does not consider the provision about the dispute resolution forum the problem will get more complex character. All of these issues have to regulate by consolidated legal act, where all related legal aspects maximally should be determined to avoid dishonest results of the e-agreements.