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In the case of traditional paper-based contracts, non-repudiation is not a problem. Both parties to a contract retain a copy of the contract on which the authorised persons signed their names on behalf of the particular parties. It makes contracts reliable and enforceable. However, this is not the case for electronic contracts unless the corresponding technology is available.
It is impossible to sign physically a contract on line because they have different ways of communications and different carriers of contracts. Therefore, any attempt trying to apply the whole characteristics of manuscript signatures to online transactions is doomed to fail. The realistic and practical solution is to summarise the main functions of signatures and thus to find a functionally equivalent technology to signatures. As L. Jean Camp said “in electronic commerce nonrepudiation is obtained through use of digital signatures”.
Someone may argue that email contracts basically can solve the problem of non-repudiation on the grounds that email contracts are composed of several .eml documents which can not be easily altered but readable. A .eml document contains the names, email address of the sender, time for sending and receiving the email and main contents of the document. The email address appearing on the .eml documents are reliable since the email accounts are exclusive unless the password is disclosed. Therefore, basically email contracts can be evidenced in the proceedings of court trials by checking the email inboxes of both parties and other related records stored in the computers.
However, if they take a look at masquerading technology, by which it is not difficult to accomplish “a creation of false online identities and e-mail messages that appear to be from a different source than the actual origin of the message” , they will change their minds. Chissic and Kelman even said that email signatures “are easily forged: a fraudster need only type another person’s name or ‘cut and paste’ over another signature-file. The forger does not even need to go through the pains of stealing or recreating letterhead and the loops and lines of a ‘traditional’ signature.” As a matter of fact, it is already a common sense that it is not difficult for a deliberate offender to hack into other people’s email system. Although the email signatures may be accepted by courts conditionally, as this paper will discuss later, more sophisticated methods to ensure secure and reliable on-line transactions are required.
B What are the Functions of Signatures?
Chris Reed had a view that a physical signature has three functions: the identity of signatory; “the signatory intended the ‘signature’ to be his signature”; “the signatory approves of and adopts the contents of the document.” Robert Moskowitz’s definition seems succinct and accurate. He said digital signature serves four legal functions: (1) evidence, (2) ceremony, (3) approval, and (4) efficiency and logistics.
When a signer makes a mark in a distinctive manner, it serves as evidence that the item is attributable to the signer. The ceremony of signing a document calls the signer''s attention to the legal significance of the act. The act of signing also expresses approval or authorization of the document. In addition, the signature provides a document with finality (a function of efficiency and logistics), often allowing the document to change hands and rapidly come to its end.
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