On 23 November 2005 the United Nations General Assembly adopted a new Convention on the Use of Electronic Communications in International Contracts. The Convention on e-contracting is the most important and long awaited development in international electronic commerce law. This paper analyses the most important provisions of this convention and its potential impact on global electronic commerce.

The new Convention aims to enhance legal certainty and commercial predictability of international contracts where electronic forms of communication are used. Being primarily concerned with the formation of electronic contracts, it recognizes the value of electronic communications and modernizes the terminology of older conventions to embrace the impact of digital technologies. Another advantage of the Convention is its broad scope of application as it goes beyond sale of goods and covers trade in services and information. It also confirms widely recognized principles such as that of functional equivalency or irrelevancy of the geographical location of information systems.

However, it also has certain shortcomings. It does not deal with important areas of electronic commerce such as B2C e-commerce or online financial transactions. Furthermore, many provisions are of general nature and hence may actually introduce more legal uncertainty than predictability. In addition, the Convention is not binding yet. The knowledge of potential pros and cons of the Convention can become very useful for any businessmen engaged in global electronic commerce.