EDUCATIONAL SECTION: PCT
For FTNX USCT Endorsed PCT’s , End Buyers and Supplies world-wide.
The signing of a commodity contract digitally
These opinions are served not as it applies to individual circumstances or where local laws within a country or state are contradictory to such opinions; they are served based on actual experience of the author, as enacted upon over decades.
A person goes on online applies for a large loan exceeding lets say $100,000.00. The applicants digitally signs the online document. Approval is secured in 60 seconds thereafter. In another scenario; a commodity deal worth millions of dollars where documents are signed electronically and are sent electronically online ? Are such documents legally binding? Again, the usual answer of “Yes” prevails. If you look up online and ask the question “is a digitally signed document legally binding” the answer is you’ll often arrive at is ‘Yes.’ If you ask you lawyer, the same answer is served. Let us examine the interpretations of matters found online to the reality of the situation in hand. In our example re: the loan application, what will happen is that while the loan was approved online, in most cases before the funds are actually deposited into your account, the applicant will still need to appear before the lender and sign hardcopies of the application already pre approved online. In many situations it may seem that you are entering into a legally binding situation when accepting a deal or contract using digitally served and signed documents; and yet, eventually hardcopy signatures and original documents are still required.
The whole premises of digitally signing a document becomes legally binding, once a dispute is apparent, if both parties have acknowledged and agreed upon, in the first instance to the deal being enacted upon online accordingly. By confirming to the online deal and supporting documents being served therein, the parties to the contract become ‘legally bound ’ to each other. The question whether or not digitally served and signed documents are legally binding is dismissed once the admissions are made and confirmed in support of the deal being applied. The ‘admissions’ made is legally binding and thus enforceable, to which any pre-approval or any other document carrying a digital signature becomes effectively and legally served. The act of digitally signing a document is a lawful one.The act of acknowledging the signing of such a document is legally binding. But ! is the act of using a digital signature legally binding on the basis of actual presentation, if one party later reneges on a deal and then declares that they did not accept nor apply any signature to any document. It’s in this light that a plaintiff may engage a lawyer to sue the other party for breach of contract.Without any witness stating otherwise , the defendant denies applying any signature(s) digitally. Where is the legal force that actually supports the claims made by the Plaintiff? To argue that the document was falsely signed would not readily be dismissed in the realm where millions of dollars are being scammed online daily, and in where digitally documents and signatures could (and are) easily be copied.
All is well when a deal concludes in good stead. But when a deal turns sour; and no admissions are made nor recorded, using digitally signed documents to back your claims that a breach has occurred, is a precarious legal situation. The chances of winning such a case under such circumstance are remote. A sagacious person looking to protect their interest would ensure that a hardcopy of the contract is in hand in where a hardcopy signature(s) are apparent. Often such a person is always the applicant taking out the loan or is e.g; buying commodities. The supplier is only concerned with payments; regardless of the format used to secure such payment. In the case for securing a loan, the lender will require the applicant to sign a contract, a contract which is not open to negotiations on a “take it or leave it” basis, no different to a seller offering goods to and legitimate buyer ( but where some aspects of ‘negotiation’ is allowed). Therefore reviewing and considering a deal ‘on a tablet or computer ’ then accepting the deal with a digital signature instantly, is simply not the same as obtaining a hardcopy of the deal and contracting basis therein to examine such intently and to seek peer advice, within a reasonable amount of time. Furthermore persuasive argument found in the international arena as it applies to the PCT trading in commodities could also find that a digitally signed document sent by email may be deemed as not being an ‘original document’ once Meta Tags are added to the document upon its transmission. Documents marked as ‘original’ are required by banks and therefore should also be relied upon for those conducting business internationally. Thus ‘the original’ status of a document being transmitted online could also be questioned–as matter of legally; then in the same light a digitally applied signature could be argued in a court of law as being a copy of the original signature, and therefore ‘not legally binding’ in the right circumstances where admission have not been made prior.
A PCT may trade on line and may accept an offer ‘subject to final contract.’ The contract may also be signed online and served accordingly. Such a contract must give reference to the offer accepted prior, as there is no contract without an offer under applicable international trade rules and laws of applications. The contract also states that every page has been read and that a hardcopy prevails as a matter of legality and that the PDF version is forwarded to ensure that all important transactional dates applied on the contract remain effective. The online PDF version of the contract is submitted online to allow a deal to continue without delays becoming apparent.This aspect is well prescribed in the FTNX doctrine of trade. However the doctrine also stipulates that the hardcopy of the contract, marked as original and signed accordingly is also posted by courier in where a postal receipt and tracking details are secured. Before the hardcopy contract is posted a witness signs a statutory declaration that they have sighted the contract and have witnessed the courier picking up the document, would also be a prudent move. Tracking details makes it very hard for the other party to deny that the contract never arrived. This one aspect is a far more secure and far more ‘legally binding’ than any online transmitted document or contract alone. The hardcopy contract is posted once the PDF version has been accepted by ay parties to such.
Millions of dollars in value apply to large trade contracts and therefore time and proper considerations must be apparent to ensure the ‘safest’ trading aspect possible has been served as it takes a lot of efforts to close upon one single deal. So many ill informed traders are attempting to trade in commodities online without any considerations to hardcopy documents and signature. Such ill informed traders have no scope in closing on such ill informed deals–may be assumed. Finally a good trade contract is one which is simply and clearly prescribed without ambiguity, in support of the offer made prior, and is under 40 A4 pages long. The larger the contract, the more open to disputes, interpretations and legal challenges become apparent –may also be assumed.
All contracts including those to do with buying and selling commodities internationally must have within its body six essential elements.
The essential elements are:
- The Intention.
- An Offer.
- Valuable Considerations.
- Legal Capacity.
- Genuine Consent.
- Legality of the Contract (objects therein)
Lets take a look at a simple express written contact applicable in the year 2022
All contracts are agreements but not all agreements are contracts.
Date: This agreement made on the 1 first day of January 2022.
The reference or transaction number for all matters of this contract is : DPFTNX-00045
Made between parties: FTN Exporting of Melbourne City located in the State of Victoria, Australia, trading commodities hereby called the ‘seller’
enacting with Tom Smith located within another state in Australia defined herein as the ‘buyer.’
IT HAS BEEN WITNESSED AS FOLLOWS:
(1)The seller agrees to sell, and the buyer agrees to purchase one (1) 20 Metric Ton full container load of Copper Cathodes.
Product offered prior as specified in the accepted offer at the delivery mode of EXW as located in Melbourne Australia, for the total sum of $80,000.00 United States Dollars.
(2) Upon the signing of this contract the buyer will pay the seller a deposit of $8,000.00 United States Dollars dollars. The balance of the payment shall be paid on the day prior to loading taking place.
(3) Goods shall be made ready for delivery at our factory at EXW 3 weeks for the date of the contract.
As witnessed by parties to this contract.
Signed by the seller FTN Exporting Ceo D.G.Papa in the presence of:
Signed by Buyer Mr Tom Smith in the presence of:
Above simple contract on a local deal is legally binding as all 6 elements are apparent. Anything added to the contract basis must adhere to the 6 elements. Our formal doctrine; International Trade and the Successful Intermediary (ITSI) can be purchased online and has a full FTNX commodity trading contract model applied. Other matters may be added to the contract under the appropriate heading.