The EU’s Legal Aspects of Electronic Data Interchange (EDI) Recommendation 1994 is a legal forerunner of today’s digital economy. And the model EDI Agreement it introduced is still being used to help deliver goods and services around the world…
Have you ever thought about what goes on back-end to ensure your can of baked beans gets to the supermarket check out? As soon as the product’s bar code is scanned it’s likely the supply chain system is already ordering more baked beans, metal for the tin as well as product labels using a sophisticated electronic ordering and invoicing data exchange process, known as EDI or Electronic Data Interchange.
EDI is the interchange of commercial data structured through approved standard messages between computer systems and effected by electronic means. EDI facilitates international transactions irrespective of distance and time differences through the instantaneous transmission of data. EDI led the way in establishing the legal validity of transactions by developing trading partner agreements.
The Recommendation introduced a model agreement to promote EDI by providing a flexible approach to the legal issues raised by the use of EDI. It aimed to reduce legal uncertainty. The model consists of legal provisions which need to be supplemented by technical specifications provided in a technical Annex in accordance with the user’s needs.
The model agreement clarifies the means of dispute settlement by providing as first alternative arbitration where the parties agree the nomination and the rules of procedure and as a second alternative a jurisdiction clause where the parties specifically will refer to the courts of a state of their choice which shall have sole jurisdiction. The parties have the right to choose the applicable law regarding recording and storage of EDI messages or confidentiality and protection of personal data, but without prejudice to any mandatory national law
Electronic Data Interchange agreements
EDI is used in the open global supply chain from manufacturers through distribution to retail point of sale.
Millions of electronic messages are exchanged daily so that we can purchase goods and services in supermarkets and other retail outlets. GS1 is the standards body that oversees EDI used in this way. Trading partners already know to each other and EDI is transmitted over value-added networks. Interchange agreements are legal instruments that trace their origins in the transition period from a paper based system to an electronic one. Successful solutions in EDI should guarantee compatibility with international regulations.