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Economy Economy

Give businesses the right to digital cancellation of contracts

Last updated: 03:18pm 8 December 2019

We will give businesses the right to insist on a digital signature and the right to digital cancellation of contracts.

Conservative Party Manifesto 2017, p.78

Our verdict

Electronic commerce in the EU is regulated by Directive 2000/31/EC, requiring member states to ensure that contracts can be concluded by electronic means. In line with the directive, domestic laws should set out technical procedures to conclude contracts, and must not create barriers to that process. In UK law the directive is applied through the Electronic Communications Act 2000, which established that electronic signatures are admissible as evidence, while exempting some types of contracts from that principle. The Consumer Contract Regulations 2013 stipulate that businesses should clearly inform customers – or other client businesses – about cancellation rights. This policy is a promise to give businesses the right to digital cancellation of contracts.

In December 2017, following a round of consultations, the Law Commission chose 14 areas of law to reform, including smart contracts. The Commission found that digital signatures are valid in terms of UK and European Law. However, the Commission’s report, the Thirteenth Programme of Law Reform, does not mention provisions for giving businesses the right to digital cancellation, nor to extend previous cancellation rights to include exempt categories.

We found no evidence that the government has worked on digital contract cancellation rights specifically for businesses. As a result, this policy is ‘not started’.

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