With the adoption of the new Law “On Electronic Commerce” (https://lex.uz/acts/-6213382) No. 792 dated 29 September 2022 (hereinafter – the “Law”), Uzbekistan takes further steps in the development of e-commerce. In this regard, the Law regulates the contract's conclusion and the payment methods, including the delivery and return of goods.
Leges Advokat team hereby has prepared a brief analysis of the new Law “On e-commerce”.
SCOPE OF LAW:
The purpose of the Law is to regulate relations between parties in the field of electronic commerce, in particular, the process of formation of contracts, payment methods, and the consequences of improper execution of contractual obligations (Article 1).
Unlike the previous version of the Law, it was clarified that the Law does not apply:
- in the field of public procurement;
- for exchange transactions.
Previously, only legal entities and individual entrepreneurs could be sellers in e-commerce transactions. Upon the entry into force of the new edition, self-employed individuals may also become Sellers in e-commerce.
FORMATION OF E-CONTRACTS:
The contract in electronic commerce is formalized by submitting an offer in an electronic form which must contain:
- name of the person sending the offer;
- contact information;
- service license (permit) information;
- terms of the contract;
- payment methods and conditions;
- terms of delivery;
- procedures for amending and canceling the contract (Article 16 (3)).
Upon acceptance of the terms of the offer by the other side, the contract will be formalized:
- in the form of an electronic document, confirmed by Electronic Digital Signature;
- in the form of an electronic message or “face ID” containing consent;
- taking actions to fulfill the conditions contained in the offer.
In addition, any evidence confirming the completion of works, including invoices, and receipts may also be considered as confirmation of the validity and conclusion of the contract (Article 14 (5)). In addition, сontracts concluded in electronic commerce must comply with the requirements of the Civil Code of the Republic of Uzbekistan, the Law, and other legislative acts of the Republic of Uzbekistan.
Subsequently, electronic documents in e-commerce are equivalent to those issued on paper and signed manually.Contracts concluded electronically cannot be invalidated just because they were concluded electronically (Article 15).
PAYMENT METHODS IN E-COMMERCE
Payments can be made:
- in cash – by presenting to the buyer documents confirming that cash funds have been received through virtual terminals as a means of payment, as well as documents that reflect information about the seller and the sold goods;
- by a bank transfer – transferring funds from a bank account;
- using electronic money – by means of transferring funds to the e-wallet.
Operators of trading platforms, payment service providers and legal entities providing delivery services of the goods are eligible to implement “escrow” service in their information systems or bank accounts (Article 24).
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Escrow account – a special account for secure settlements of transactions between a buyer and a seller. The buyer transfers funds to the seller’s account, and the latter may receive them only if the contract terms are fulfilled.
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During the payment of the goods by the buyer, the provider of the “escrow” service has the right to keep the funds paid by the buyer until confirmation of the receipt of the goods. If the goods are not delivered or do not match the description, the “escrow” service provider will return the funds to the buyer or, if the goods are accepted by the buyer, the funds will be transferred to the seller’s account.
DELIVERY OF GOODS SOLD in the E-COMMERCE
The delivery of goods sold electronically is considered an obligation of the seller and must be delivered to the place indicated by the buyer.
The delivery period should not exceed 30 days from the date of acceptance unless otherwise specified in the contract (Article 25).
In case of late delivery, the Seller is liable in accordance with the legislation of the Republic of Uzbekistan. For example, under the Law “On Contracting and Legal Basis of Activity of Business Entities” dated August 29, 1998, No. 670-I (https://lex.uz/docs/4403244), in the event of late delivery, shortage of goods, non-performance of work, or non-provision of services, the supplier (contractor) pays the buyer (customer) a penalty in the amount of 0.5 percent of the unfulfilled part of the obligation for each day of delay, but the total amount of penalty should not exceed 50 percent of the value of the undelivered goods.
EXCHANGE OF GOODS AND RETURNING THE PAYMENT
If the delivered goods do not comply with the terms of the contract or are not of the appropriate quality, the Buyer has the following rights:
- canceling the contract and withdrawing money;
- demanding replacement of goods;
- reducing the price of goods.
The law establishes the features of the replacement of goods with defects, the elimination of defects in the goods, as well as the return of paid funds to buyers:
- upon detection of defects in the goods, they should be replaced within – 7 days (with additional verification - within 20 days);
- in case of termination and the delay in the return of payments, the seller, in addition to returning the money, must pay a penalty in the amount of 1% of the amount for each delayed day (not exceeding the total amount of money in return).
The Law will be in force from 1 January 2023.
