Electronic Transaction Act of New Zealand

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Electronic Technology has changed the way we organize our lives, do business or interact with people. The Act aims to give business some certainty when transacting online. The main features of the act are discussed below:


1. The “Opt-In” nature of Electronic Transaction

The Act allows people to substitute electronic technology for paper if they wish to do so. The provision has an “opt-in” nature, which means a business or government doesn’t necessarily has to put in place electronic ONLY means. However, it is expected that each entity will comply by the Act once it has put in place necessary systems and technology in place. The act says if all legal requirements are met electronically, then the exchange of information and electronic transaction is not invalid.


However, the Act allows some information to continue in paper form, such as:

 – notices that are required to be given to the public

 – information that is required to be given in writing either in person or by registered post

 – wills, affidavits and powers of attorney

 – cheques and other negotiable instruments, and bills of lading

 – court documents

 – documents to do with title to land

 – various agreements or notices that are required to be in writing by consumer-protection laws, for example:

 – consent by a psychiatric patient to brain surgery

 – search warrants


“ETA is technology neutral. It provides that you can use electronic methods to meet paper-based requirements and includes rules that must be complied with in order to meet the test of functional equivalence.”

2. Electronic Information Exchange

The legal requirement of electronic information sharing is met, if:

 a. The information is readily accessible, so that it can later be referred to

 b. The other person consents to this.


 To ensure ready accessibility, entity would need to ensure necessary hardware and software to keep, retrieve, and interpret information. The entity should be reliably able to ensure that the information remains complete and unchanged.


 In case of consumer credit contract, the regulation states that lender can give information only if, borrower

 a. has been given the option of receiving information in electronic form

 b. has expressly consented to electronic exchange of information.

3. Electronic Signature

Electronic Signature on an electronic document is equivalent to physical signature on physical document. An electronic signature in legal terms should

 – adequately identifies the person signing and adequately indicates that the person approves the accompanying information.

 – is reliable and appropriate for the purpose and circumstances of signature.

 – the means of creating the signature is linked to and is under the control of the person signing and no-one else

 – Any subsequent change either to signature or information in document is detectable.


 Further the person receiving must have consented to receiving an electronic signature.


4. Rules for Time and Place of sending and receiving Email.

The electronic transaction act sets out rules to provide certainty about 

 – Time of electronic communication (email or Fax) received or sent

 – An email is taken to be sent at the time it first enters an information system outside sender’s control.

 – An email is taken to be received at the time it first enters information system of receiver.


 The rules contained in the Act are only default rules. The parties involved in the transaction can decide for different rules.

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