New Jordanian Legislation for Electronic Transactions

A new enactment for electronic transactions has been recently promulgated in Jordan. The Law number 15 for the year 2015 relating to Electronic Transactions was published in the Official Gazette on May 17th, 2015. And it has come into effect on the same date of publication.

The new law aims to enhance e-commerce by clarifying the legal framework for doing business online or for making contracts via electronic means of communication. Moreover, the law affords to electronic records the same legal value as documents made in writing. As such, ledgers and other book-keeping obligations can be satisfied by electronic records, provided such records meet certain security and technical requirements.

This legislation repeals the former Law number 85 of the year 2001 that governed the same subject matter. Compared with the repealed Law, the Law number 15/2015 contains elaborate provisions on electronic signatures and defines more clearly the authentication authorities of electronic signatures.  Broadly speaking, the new legislation draws on the UNCITRAL Model Law for Electronic Signatures. Yet, the Law leaves out many issues to be regulated by subordinate legislation.

As far as authentication authorities are concerned, the new law indicates various possible bodies mandated with authentication powers. The Ministry of Telecommunications and Information Technology is the principal authentication authority for governmental entities. However, the law empowers the government to mandate other entities with the task of the Ministry of Telecommunications in this regard. Besides, private agencies may be licensed by the said Ministry to provide authentication services. Moreover, the Central Bank carries out the authentication mandate in respect of electronic banking transactions.

Notably, the new legislation omits articles 27 and 28 of the repealed law of 2001. These articles purported to delimit the liability of banks for electronic banking transactions, the risks of which were most likely borne by the client. Thus, a bank could avoid liability if it proved that it had appropriate security measures in place or established fault on the part of the client. The Supreme Court had ruled, under the repealed law, that clients were responsible for the (alleged) unauthorized use of their ATM cards, even when such cards were for the first time used outside Jordan and the bank did not notify the client of the unusual transaction. It remains to be seen whether the abolition of articles 27 and 28 of the Electronic Transactions Law could trigger a second thought on the matter by the courts – approximating banks’ liability for losses resulting from electronic transactions to banks’ liability for banking forged checks might be possible now.

Unlike the repealed law, the Law number 15/2015 lays down explicit legal basis for electronic government. It recognizes governmental dealings and actions executed through electronic means. Further, the Law now recognizes explicitly electronic money and electronic checks, while authorizing the Central Bank to issue pertinent Instructions to put these instruments of payment into actual legal use.

It is worth noting that the law still assumes that electronic contracts are formed mainly by and between business enterprises and merchants. It makes no specific mention of consumer-business dealings.