The Functional Equivalent Approach

Section 4 of the Indian Act enacts the same idea in positive form for the writing requirement, and section 5 does it for signature. Chapter 300 owns both.

Article 5 bis: incorporation by reference

"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."

This article was added by the Commission in June 1998, two years after the rest, and it addresses the ordinary web practice of putting the terms behind a link rather than in the message.

It is drafted in exactly the same negative form as article 5, and for the same reason. It does not say that a linked term is incorporated. It says that the mere fact of being linked rather than included is not a ground for denying effect, leaving the ordinary law of incorporation, and questions of notice and assent, to do the rest.

India did not enact article 5 bis, and the point is not academic: the enforceability of a browse-wrap term behind a link is decided in India by ordinary contract principles of notice, without any statutory starting point. Chapter 960 works that out.

Article 6: writing

Article 6(1): where the law requires information to be in writing, that requirement is met by a data message if the information contained therein is accessible so as to be usable for subsequent reference.

Article 6(2): paragraph (1) applies whether the requirement is in the form of an obligation or whether the law simply provides consequences for the information not being in writing.

Work through the method. What is writing for? Chiefly, that the information can be read again later. Paper does that by lasting and staying legible. So the criterion is accessibility for subsequent reference, and that is the whole test. It says nothing about permanence, nothing about format, and nothing about who can read it.

Article 6(2) covers both kinds of statute: those that say a thing must be in writing, and those that merely attach a consequence to its not being, such as unenforceability.

Section 4 of the Indian Act is article 6, and its wording is close: where any law provides that information or any other matter shall be in writing or in the typewritten or printed form, then that requirement shall be deemed to have been satisfied if such information or matter is rendered or made available in an electronic form and accessible so as to be usable for a subsequent reference.

Article 7: signature

Article 7(1): where the law requires a signature of a person, that requirement is met in relation to a data message if (a) a method is used to identify that person and to indicate that person's approval of the information contained in the data message, and (b) that method is as reliable as was appropriate for the purpose for which the data message was generated or communicated, in the light of all the circumstances, including any relevant agreement.

Ask the same question. What is a signature for? Two things: it identifies the signer, and it shows that the signer approved the content. Those are the two limbs of article 7(1)(a), and they are the functional part.

Article 7(1)(b) adds a reliability standard, and it is deliberately relative. The method must be as reliable as was appropriate for the purpose, in the light of all the circumstances. A typed name at the foot of an email may be appropriate for confirming a delivery date and plainly inappropriate for executing a mortgage. That relativity is the difference between article 7 and the Indian provision.

Section 5 of the Indian Act is narrower. It provides that where any law requires a signature, that requirement is satisfied if the information is authenticated by means of an electronic signature affixed in the manner prescribed by the Central Government. India chose a prescribed method rather than a reliability standard, so an Indian statutory signature requirement is met by the techniques in the Second Schedule and not by any method that happens to be appropriate. Chapters 300 and 310 work the difference, which is the most important single divergence between the Model Law and the Act.

Article 8: original

Article 8(1): where the law requires information to be presented or retained in its original form, that requirement is met by a data message if (a) there exists a reliable assurance as to the integrity of the information from the time when it was first generated in its final form, and (b) where presentation is required, the information is capable of being displayed to the person to whom it is to be presented.

Article 8(3)(a) supplies the test of integrity: whether the information has remained complete and unaltered, apart from the addition of any endorsement and any change which arises in the normal course of communication, storage and display.

Article 8(3)(b) makes the standard of reliability relative to the purpose for which the information was generated and to all the relevant circumstances.

This is the hardest of the three and the most instructive. What is an original for? Not that it is the first copy, because for a data message that is a meaningless idea; every copy is identical. An original is required because it is the version that has not been tampered with. So the criterion is integrity, and the exceptions in article 8(3)(a) are exactly the changes that do not touch integrity: an endorsement added on the way, and the format changes that happen in transmission and display.

India enacted this in section 7A and, more importantly, in the electronic evidence provisions, and the integrity idea is what section 63 of the Bharatiya Sakshya Adhiniyam is testing when it requires a certificate. Chapter 1270 owns that.

Article 9: admissibility and evidential weight

Article 9(1): nothing in the application of the rules of evidence shall apply so as to deny the admissibility of a data message in evidence on the sole ground that it is a data message, or, if it is the best evidence that the person adducing it could reasonably be expected to obtain, on the ground that it is not in its original form.

Article 9(2): information in the form of a data message shall be given due evidential weight, and in assessing that weight regard shall be had to the reliability of the manner in which the data message was generated, stored or communicated, to the reliability of the manner in which the integrity of the information was maintained, to the manner in which its originator was identified, and to any other relevant factor.

Two ideas are kept apart here, and they are the two ideas Indian courts have struggled with. Admissibility is a threshold: the record comes in. Weight is what the court makes of it afterwards. Article 9 says the electronic form is no answer to admissibility, and lists the factors that go to weight.

India took a different route, requiring a certificate as a condition of admissibility rather than treating reliability purely as a matter of weight. That choice is why Anvar P.V. and Arjun Panditrao were needed at all, and chapter 1270 works both.

Article 10: retention

Article 10(1): where the law requires that documents, records or information be retained, that requirement is met by retaining data messages provided that (a) the information is accessible so as to be usable for subsequent reference; (b) the data message is retained in the format in which it was generated, sent or received, or in a format which can be demonstrated to represent accurately the information generated, sent or received; and (c) such information, if any, is retained as enables the identification of the origin and destination of a data message and the date and time when it was sent or received.

Condition (c) is the one students miss. It is not enough to keep the message. You must keep enough to say who sent it, to whom, and when. That is the metadata, and chapter 20 explains why it is fragile.

Section 7 of the Indian Act is article 10 almost word for word, with the same three conditions, and section 7(2) adds that the section does not apply to information automatically generated solely for the purpose of enabling a message to be sent or received. Chapter 360 owns it.

The five requirements and their criteria, side by side

A worked example

Nandini sells industrial valves. Her customer sends a purchase order by email; she replies "Confirmed, Nandini Rao" and ships. The customer refuses to pay and says there was no contract in writing signed by the seller.

Writing, article 6. The emails are stored in both mailboxes and can be opened and read. They are accessible so as to be usable for subsequent reference. The writing requirement is met.

Signature, article 7 as the Model Law has it. The typed name at the foot, together with the fact that the message came from her business account, is a method that identifies her and indicates approval. Is it as reliable as appropriate? For a routine order of this size, between parties who have traded this way for two years, plainly yes. So the signature requirement is met.

Signature, section 5 as India has it. The typed name is not an electronic signature affixed in the prescribed manner, so section 5 is not satisfied. That does not end the matter, because section 5 is engaged only where a law requires a signature, and the general law of contract does not require one for a sale of goods. Chapter 930 works out what section 10A then does.

Original, article 8. If the customer produces a version of the confirmation with different terms, the question is integrity: which version has a reliable assurance that it has not been altered since it was first generated in final form. That is the practical reason the mail server logs and the message headers matter more than the printout.

Retention, article 10. Nandini keeps the emails with their headers, which show sender, recipient and time. Had she copied the text into a word processing file and deleted the mail, she would have kept the content and lost condition (c).

What this does NOT mean

It does not mean electronic always equals paper. The approach is requirement by requirement. A record can satisfy the writing requirement and fail the signature requirement, as the worked example shows.

It does not mean the Model Law makes anything valid. Article 5 removes one reason for refusal. Everything else that could make the transaction bad still can.

It does not mean India adopted the approach wholesale. It adopted it for writing and retention, narrowed it sharply for signature, and departed from it for evidence. Those three divergences are the substance of chapter 110.

Quick revision

• The method: identify the function the paper requirement serves, then set criteria an electronic record must meet to serve it. Not redefinition, not imitation.
• Article 5: information is not to be denied legal effect solely because it is a data message. Article 5 bis, added 1998, does the same for information merely referred to. India did not enact 5 bis.
• Article 6, writing: accessible so as to be usable for subsequent reference. Indian section 4.
• Article 7, signature: a method that identifies and indicates approval, and is as reliable as appropriate in the circumstances. Indian section 5 requires a prescribed method instead. This is the main divergence.
• Article 8, original: reliable assurance of integrity from the time it was first generated in final form, plus capability of display. Integrity means complete and unaltered apart from endorsements and normal changes in communication, storage and display.
• Article 9, evidence: no denial of admissibility for electronic form; the reliability factors go to weight. India made reliability a condition of admissibility.
• Article 10, retention: accessible, accurate format, and origin, destination, date and time. Indian section 7.

Test yourself

1. State the functional equivalent approach and say what two alternatives it rejects. Identify the functions a paper-based requirement serves, then treat a data message as satisfying the requirement if it performs those functions to an appropriate standard of reliability. It rejects redefining paper words to include electronic ones, which either over-includes or under-includes across hundreds of statutes, and it rejects requiring the electronic record to imitate paper, which discards the advantages of the medium.

2. Why is the criterion for writing different from the criterion for original? Because the two requirements exist for different reasons. Writing exists so the information can be read again, so the criterion is accessibility for subsequent reference. An original is required because it is the untampered version, so the criterion is a reliable assurance of integrity. Applying one criterion to the other requirement would satisfy neither.

3. How does section 5 of the Indian Act differ from article 7, and what turns on it? Article 7 accepts any method that identifies the person and indicates approval and is as reliable as appropriate in the circumstances. Section 5 requires an electronic signature affixed in the manner prescribed by the Central Government. India therefore has a closed list of acceptable techniques where the Model Law has an open reliability standard, so a typed name or a scanned signature can never satisfy an Indian statutory signature requirement however appropriate it is.

4. What are the three conditions in article 10 and which is most often overlooked? Accessibility for subsequent reference; retention in the format generated, sent or received or one demonstrably accurate; and retention of information enabling identification of origin, destination, date and time. The third is the one overlooked, because it requires keeping the metadata and not only the content.

5. Why is article 5 drafted as a prohibition rather than as a grant of validity? Because it is not trying to make electronic communications valid; validity depends on the ordinary law. It removes one specific ground of objection, that the communication is electronic, and the word "solely" preserves every other ground. Drafting it as a grant would have made electronic records effective in circumstances where a paper record would not have been.