Electronic Data Interchange: Uses and Legal Aspects in the Commercial Arena


Robert W. McKeon, Jr.


VOL. XII • Spring 1994 • NO. 4 (table of contents)

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Cite as:

12 John Marshall J. of Comp. & Info. Law 511


Electronic Data Interchange (EDI), computer-to-computer communication, allows rapid exchange of information and is capable of dramatically increasing commercial efficiency. Faster than mail, personal meetings and communication via telephone, EDI will include recordkeeping, communication between governments, retail use and healthcare streamlining. EDI may pose future evidentiary problems including proving the source and content of the message. Numerous techniques may offer greater reliability of authentication of electronic messages by creating an audit trail when EDI is used.

Using EDI for commercial transactions involving the sale of goods raises questions of contract law and the Uniform Commercial Code regarding the statute of frauds and the parole evidence rule. Since such EDI transactions are signed writings, are stored on a hard disk drive and have some symbol identifying the parties, EDI transactions will satisfy the statute of frauds. EDI transactions will make the parole evidence rule, allowing the admittance of a trading partner agreement to prove additional contract terms, a necessity given the difficulty of including all the terms agreed upon in the EDI message.

The reduction in cost associated with EDI will ultimately benefit the consumer. The greater efficiency afforded by EDI is imperative to United States companies seeking to compete in a global market. Fortunately, United States contract law concerning EDI will not hinder the development of EDI in the commercial setting.

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