VALIDITY OF INTERNATIONAL TRADE CONTRACTS THROUGH ELECTRONIC MEDIA ACCORDING TO THE UNITED STATES LEGAL SYSTEM

VALIDITY OF INTERNATIONAL TRADE CONTRACTS THROUGH

ELECTRONIC MEDIA ACCORDING TO THE UNITED STATES

LEGAL SYSTEM

Introduction

The development of technology in the era of globalization allows trading activities to

be carried out through electronic media which is often referred to as electronic commerce or

e-commerce. Like trade in general, e-commerce requires a contract as a basis for the rights

and obligations of the parties in trade. This contract through electronic media is known as an

e-contract. Edmon Makarim in his book, "Introduction to Telematics Law: A Compilation of

Studies", defines an electronic contract or online contract as an engagement or legal

relationship that is carried out electronically by combining a network (networking) of

computer-based information systems (computer cased information systems) with

communication systems based on telecommunication networks and services

(telecommunication based) which are further facilitated by the existence of internet global

computers (network of networks) "

Based on the above definition, it is concluded that an electronic contract or e-contract

is a contract made by two or more parties using electronic media such as computers, gadgets,

or other communication tools via the internet. Trade is also defined as the activity of meeting

sellers and buyers, but in electronic commerce sellers and buyers do not meet directly. All

contract implementation starting from the offer to the approval of a contract occurs in

electronic media. The existence of electronic contracts as a trading activity has been

recognized as valid by the United Nations in Article 8 paragraph (1) of the United Nations

Convention on the Use of Electronic Communications in International Contracts (hereinafter

referred to as the "Convention"). Electronic Communication Convention or ECC) which

states that a A contract shall not be denied validity or enforceability merely because it is in

the form of electronic media. Based on Article 8 paragraph (1), the UN has recognized

electronic contracts as valid and binding contracts for the parties.

International organizations such as UNCITRAL, United Nations and OECD

(Organization for Economic Co-operation and Development) have attempted to make

arrangements at the international level to protect consumers in electronic transactions. These

efforts are embodied in the UNCITRAL Model Law on Electronic Commerce, the United

Nations Guidelines for Consumer Protection, and the OECD Recommendation on Consumer

Protection in E-Commerce, which basically aim to provide regulations regarding consumer

protection that can be adopted by each member country. Regulations made by these

international organizations need to be adopted by member countries so that they are binding

and can be applied in the national territory, for this reason member countries need to adopt

these regulations including United States.

The Republic of United States in the national scope has recognized electronic contracts

in Article 18 paragraph (1) of Law Number 11 of 2008 concerning Electronic Information

and Transactions (hereinafter referred to as ITE Law) which has been amended by Law

Number 19 of 2016 concerning Amendments to Law Number 11 of 2008 concerning

Electronic Information and Transactions. Based on the recognition of this electronic contract,

the electronic contract in United States is considered a valid and binding contract for the

parties.2 In connection with the recognition of electronic contracts, all legal relationships

carried out by consumers and business actors in electronic contracts must be protected. While

the legal basis for protection consumers in United States still use Law Number 8 Year 1999

on Consumer Protection (hereinafter referred to as UUPK) which still has shortcomings in its

scope which only covers business actors operating within the jurisdiction of the Republic of

United States. In addition, United States still does not have rules regarding e-commerce

which causes United States to have many weaknesses, especially in terms of consumer

protection.

To anticipate these developments, it must be followed by developments in the field of

law, especially in the field of business law, including international trade law. Based on these

developments, United States has determined the direction of policy in the field of law that

supports economic activities, as outlined in the Guidelines for State Policy (GBHN) 1999-

2004, MPR Decree No. IV/MPR/1999, that United States must develop laws and regulations

that support economic activities in facing the era of free trade without harming national

interests.

Based on these reasons, the development in today's era has been very rapidly

developing, the legal system must also develop including in conducting international and

national trade contracts, more specifically in the scope of international trade, the principles of

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international trade law in the GATT-WTO; trade regulations in the field of tariffs; anti-

dumping regulations, subsidy bans, and safeguards in international trade; United States

Foreign Trade Policy; and trade dispute resolution. Electronic trading business activities (e-

commerce) are often encountered by the existence of contracts / agreements to conduct

buying and selling transactions of products offered through internet sites. The contract is

generally in the form of an e-contract i.e. a contract/agreement made by the parties through

an electronic system, where the parties do not meet in person.

This is different from ordinary/conventional contracts in the real world (offline) which

are generally made on paper and agreed upon by the parties directly through face-to-face

meetings. In order for the contract that occurs as a result of electronic commerce transactions

to be valid according to United States civil law, the contract must also fulfill the requirements

for the validity of an agreement according to Article 1320 of the Civil Code. Likewise in

United States, internet users in United States actually started in 1993 and were initially

limited to entertainment, but currently internet users in United States have also included use

for trade. E-commerce is a form of trade that has its own characteristics, namely crossing

regions and even national boundaries, not meeting sellers and buyers directly, carried out

anywhere and anytime. These conditions are beneficial on the one hand for consumers,

because they have many choices to get goods without the need to leave their place of

residence, but on the other hand, violations of consumer rights are very risky, because of the

unique characteristics of e-commerce.

Discussion

Alternative Trade through E-Commerce in a Change in Legal Construction in the Event

of Default

In cross-border distance selling via the internet, business to consumer trade transactions

are carried out directly between traders and consumers. The use of this technology is a

relatively new use for business actors, especially for consumers, to get new offer information

from various countries regarding a product offered. Seeing that the media used to conduct

transactions is an electronic communication tool, where there is no direct face-to-face

between the seller and the buyer, or the bargaining process directly is a risk for consumers to

suffer losses.

Based on an alternative regulation in e-commerce trading activities, there should also be a

change in the legal construction of the principle of caveat emptor or let the buyer bewer,

which is a doctrine that says that the buyer bears the risk of the bad conditions he buys. This

means that buyers (consumers) must be careful about the risks of the goods they buy, before

buying a product. Changing to the principle of caveat venditor or let seller beware, which is

the opposite of let the buyer beware, which means that the seller must be careful about the

risks of the products he sells.

Liability based on default is contractual liability. Thus, when a product is damaged, the

consumer first opens the agreed regulations. Advantages for consumers based on strict

obligation, which is an obligation that is not based on the efforts the seller has made to fulfill

its promise. That means the producer has tried to fulfill its promise, but the consumer still

suffers a loss. Then the producer is still charged with the responsibility to compensate for the

loss.

Default Dispute Resolution in the Perspective of International Law

The dispute resolution path can be through litigation or non-litigation. The litigation route

is the court forum. The court forum is the 'classic' forum chosen by the parties. A classic

forum because this forum has been commonly and quite widely chosen by the parties. The

court is a reflection of the judicial jurisdiction of a sovereign state. All legal events, including

contract disputes that occur within the territory of a state, are in principle under the

jurisdiction of that state.

To exercise internationally recognized jurisdiction, the courts of a country (province or

state in a federal legal system) must have some connection to the parties or the property in

dispute.

The laws used in alternative international dispute resolution include: Conciliation and

arbitration under the International Chamber of Commerce (ICC). According to the preamble

of this provision, it is stated that the settlement of disputes is a settlement of business disputes

of an international nature. The ICC has therefore established these rules of optional

conciliation to facilitate the amicable settlement of such disputes. The ICC conciliation

provisions contain 11 articles in total. Article 1 provides for conciliation jurisdiction. This

article provides that all disputes of an international nature can be submitted to conciliation by

a conciliator appointed by the ICC. Article 5 states that the conciliator must carry out the

conciliation process as he deems fit or appropriate by taking into account the principles of

impartiality, equity, and justice. Article 6 provides that the confidentiality of the conciliation

process must be respected by everyone in it.

According to the provisions of the ICC Paris, the (material) law used by the arbitrators to

decide disputes submitted to them is first based on the law desired by the parties themselves.

If there is no such choice of law, then in principle the law used is the law under which the

arbitration proceedings are conducted. Thus the ICC's jurisdiction extends to all disputes

arising out of applicable controversies settled under the ICC's rules of conciliation and

arbitration.

Forms of default and proof over the internet. An e-commerce transaction is a sale and

purchase agreement as defined by the United States Civil Code. Because i t i s an

agreement, it also gives birth to what is referred to as a performance, namely the obligation

of a party to carry out the things that are in an agreement. The existence of a performance

allows for default or non-performance of the performance/obligations properly imposed by

the contract to certain parties. Default (Clefault or non fulfillilmeny, or what is also known as

hreach of confracl) is the non-performance of a performance or obligation as it should be

imposed by the contract on certain parties as mentioned in the contract concerned. The act of

default has the consequence of the right of the injured party to sue the party who committed

the default to provide compensation, so that by law it is hoped that no party will be harmed by

the default.

In e-commerce transactions, the seller or merchant has the obligation to deliver the goods

sold to the buyer and the obligation to bear quiet enjoyment and bear hidden defects. If the

seller does not carry out these obligations, the seller can be said to be in default. For example,

the online shop kakilima.com offers cakes (birthday cakes). Kakilima.com promises to deliver

the buyer's order within one week after the order is received. If the buyer ordered a birthday

cake on July 12, 2001, the cakes should have arrived at the buyer's place on July 19, 2001.

However, it turned out that the seller could not fulfill his obligations, he did not deliver the

cakes and thus the seller had defaulted.

Performing what he promised, but not as promised. An example or application of this

default is a buyer ordering a flower arrangement on kakilima.com. At the time of the order,

what the buyer sees is an image on his monitor screen showing a picture of a fresh red rose

flower arrangement. However, it turns out that the flower arrangement that arrives at his

place is a wilted red rose flower arrangement or no longer as fresh as depicted on the monitor

screen. Thus, it is clear that the merchant has made a default because it has not performed its

obligations properly.

Performing what is promised but late, for this default is actually similar to the first form of

default. If the ordered goods are late, but can still be used, this can be classified as a late

performance. Conversely, if the performance can no longer be used, classified as not

performing what has been promised. For example, a buyer orders a book from Toko Sanur-

on/zne. An order that should only take three days t o deliver turns out to arrive on the

seventh day.

This clearly shows that the seller has defaulted. However, because the goods can still be

used, this default is classified as a late performance and not a failure to perform. Doing

something that according to the agreement should not be done. For this last default, for

example, a seller who is obliged not to publicly disclose the identity and personal data of the

buyer, but apparently the seller does so. Then it can also be said to have made a default, so

basically the essence of default is negligent in doing what is his responsibility. Whether it is

in conducting national or international scope trade which can be said to be Export Import

trade activities.

Legal Protection for Exporters in the Payment of International Trade Transactions

through Telegraphic Transfer

Payment system is a system that includes a set of rules, institutions and mechanisms

used to carry out the transfer of funds to fulfill an obligation arising from an economic

activity. The Payment System is a system related to the transfer of a certain amount of money

value from one party to another. The media used to transfer the value of money is very

diverse, ranging from the use of simple payment instruments to the use of a system that is

very sophisticated. It is complex and involves various institutions and their rules. The

authority to regulate and maintain a smooth payment system in United States is carried out by

Bank United States as outlined in the Bank United States Law.

In carrying out this mandate, Bank United States refers to four principles of payment

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system policy, namely security, efficiency, equal access and consumer protection: 1).

Security means that all risks in the payment system such as liquidity risk, credit risk, fraud

risk must be managed and mitigated properly by each payment system operator. 2). The

principle of efficiency emphasizes that the implementation of the payment system must be

widely used so that the costs borne by the community will be cheaper due to increased

economies of scale. 3). Then the principle of equal access which means that Bank United

States does not want monopolistic practices in the implementation of a system that can

prevent other players from entering. 4). Finally, the obligation of all payment system

operators to pay attention to aspects of consumer protection.

Meanwhile, in relation to an institution that circulates money, the smoothness of the

payment system is embodied by maintaining the amount of cash circulating in the community

and in a condition that is worthy of circulation or commonly called clean money policy.

Broadly speaking, payment systems are divided into two types, namely cash payment

systems and non-cash payment systems. The fundamental difference between the two types

of payment systems lies in the instruments used. In the cash payment system, the instruments

used are in the form of currency, namely money in the physical form of banknotes and coins,

while in the non-cash payment system the instruments used are in the form of Payment

Instruments Using Cards (APMK), Checks, Bilyet Giro, Debit Notes, and electronic money.

Telegraphic Transfer is a payment method commonly used for export/import trade,

between banks and overseas parties that allows the transfer of local currency or foreign

exchange by telegraph, cable or telex. The term dates back to a time before wireless

communication technology, but is still used today. International trade law is a fast-growing

field of law. The scope of this field of law is quite broad. Cross-border trade relations can

take many forms, from simple barter, buying and selling of goods or commodities to complex

trade relations or transactions. The complexity of international trade relations or transactions

is at least partly due to the existence of technological services (especially information

technology) so that trade transactions are getting faster.

State boundaries are no longer an obstacle in transactions. There are several motives or

reasons why the State or legal subjects (actors in trade) conduct international trade

transactions. One of them was Amanna Gappa, a Bugis tribal chief who was aware of the

importance of trade (shipping) for the welfare of his tribe. The Bugis tribe's superiority in

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sailing using only small Bugis boats had sailed the vast seas as far as Malaya (now Singapore

and Malaysia). This essence of trading is the philosophical basis for the emergence of trade.

As stated earlier, trade is a "fundamental freedom".

Implementation of International Trade Contracts in the Event of Default Between

Parties

International Trade covers a wide range of transactions or legal relationships, ranging

from contracts for the production of goods and services, buying and selling relationships,

payment methods for goods, delivery and collection of goods, delivery and receipt of goods,

and others that are all based on a trade. All of these transactions have the potential to cause

conflicts/disputes between the parties involved in the trade. Generally, trade disputes are

usually preceded by non-litigation settlement efforts (negotiation, mediation, conciliation). If

this settlement fails or is unsuccessful, then other means such as settlement through the courts

or arbitration are pursued.

In the implementation of international trade activities (export-import), nationally

involves various institutions in United States, in addition to exporters and importers as well

as other parties, namely government agencies, either directly or indirectly involved in food

import activities such as: Directorate General of Foreign Trade of the Ministry of Finance of

the Republic of United States; Ministry of Agriculture of the Republic of United States,

Ministry of Health of the Republic of United States; and National Standardization Agency

(BSN), and Food and Drug Monitoring Agency (BPOM) for drugs, processed food and

cosmetics.

Conclusion

From the descriptions of the discussion above, the researcher can draw conclusions from the

discussion that has been formulated as follows: 1). The procedure for resolving default

disputes in trade contracts is an agreement between the two parties included in the trade

contract by determining the choice of law and choice of forum relating to choosing what law

and forum will be used in dispute resolution. According to national and international law,

dispute resolution can be resolved through litigation, which is a procedure that exists in court

or non-litigation by choosing a dispute resolution path with mediation, conciliation,

negotiation and arbitration. The settlement in the path taken is in accordance with the

agreement between the parties in the contract. Dispute resolution decisions must not violate

public order in the country. If the decision is contrary to public order then the decision cannot

be implemented. 2). The validity of the contract according to the ITE Law provides

recognition of this Electronic Contract in article 1 number 17 as 'an agreement between the

parties made through an electronic system', then regarding the electronic system it is

mentioned 'a series of electronic devices and procedures that function to prepare, collect,

process, analyze, store, display, announce, transmit, and/or disseminate Electronic

Information' (article 1 number 5). 3). This requirement to use certified electronic system

means seems to be a preventive effort for people who want to make excuses or cheat after

making an engagement by arguing that electronic contracts are not valid and binding because

they are not specifically recognized by law. The legal effect of the validity of a contract

depends on the fulfillment of the terms of the contract. If the conditions contract formation

has been fulfilled, the contract can be declared valid. However, in the context of electronic

contracts, the problem becomes more complicated because electronic contracts are formed

without direct meetings between the parties and without the use of paper-based documents

that can cause defaults between the parties. 4). The lack of knowledge and expertise of the

parties authorized to resolve disputes that occur in cyberspace, especially electronic buying

and selling transactions. The difficulty of implementing the decision of a dispute resolution

process for default in this electronic trading transaction, because although the existing dispute

can be resolved either by litigation or non-litigation, the implementation of the decision

sometimes requires force from the authorities.