Electronic Data Interchange: Uses and Legal Aspects in the Commercial Arena, 12 J. Marshall J. Computer & Info. L. 511 (1994)
The John Marshall Journal of Information Technology &
Privacy Law
Volume 12
Issue 4 Journal of Computer & Information Law
Electronic Data Interchange: Uses and Legal Aspects in the Commercial Arena, 12 J. Marshall J. Computer & Info. L. 511 (1994)
Robert W. McKeon Jr. 0
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Article 1
by ROBERT
W. McKEON, JR.*
Electronic Data Interchange ("EDI") is computer-to-computer
communication. EDI is broadly defined as the exchange of coded electronic
mail messages which originate in the sender's computer and travel to
the recipient's computer.' EDI is revolutionizing communication
be*
Member of the New York State Bar; Licence sp6ciale, Universit6 libre de
Bruxelles (1992); J.D., Case Western Reserve University (1991); M.A., Middlebury College
(1988); A.B., College of Holy Cross (1987).
Special thanks to Stuart N. Brotman, Esq., Chairman of the International
Communications Committee, Section of International Law and Practice, American Bar Association.
1. Benjamin Wright, AuthenticatingEDI: The Location of a Trusted Recordkeeper, 4
SorrwARE L. J. 173 (1991).
Computers think in terms of binary digits. A binary digit, or bit, is either a zero or a
one. The computer recognizes a zero or one based on voltage or current streams,
sequences or fluctuations. When the voltage or current is on, i.e. above a certain threshold
limit, a one is registered. When the voltage or current is zero, or below this threshold, a
zero is registered.
A group of eight bits (zeros and ones) is called a byte. The American Standard for
Character Information Interchange ("ASCII") has developed a code permitting 255
various symbols (letters, punctuation marks and numerals). Each symbol, e.g. the letter
lower-case "a", is derived from various eight bit combinations of zeros and ones.
Therefore, the computer uses the ASCII code to translate a byte (eight bits) to one of 255
characters recognizable by humans.
Digital communication via telephone cable involves sending data to a modem. The
modem converts the digital impulses, representing bits, to analogue (frequency). The
information is then transmitted over a telephone cable to a recipient modem. This modem
then deconverts from analogue back to digital for the recipient computer. When fiber
optic cables are used, a modem transmits information by a stream, sequence or fluctuation
in the levels of light intensity.
Computers have two levels of memory. The first is called Random Access Memory
("RAM"). RAM is the working memory of the computer, and data in RAM is lost once
the computer is turned off. Data in RAM is reproduced for permanent storage on the
hard disk drive of the computer, also known as secondary storage.
The ability to store a transmission, or modify it,is the distinguishing factor between
computers and facsimile ("fax") machines. With a transmission between fax machines,
the only processing which occurs is the compression and decompression of bits. The
decompression results in a copy of the original, and the transmission cannot be stored
(extween suppliers and purchasers. They will now be able to electronically
exchange information within a matter of seconds. This more efficient
communication is critical to keeping administrative costs down, and
makes US industry more competitive.2 Companies in Europe have
already been using EDI to increase efficiency. As stated best by one
European businessman, "we can't afford to be inefficient."'3 This article will
analyze in three respective sections: EDI, evidentiary issues posed and
commercial contracts.
I. ELECTRONIC DATA INTERCHANGE
EDI messages are transmitted via telecommunication systems,
usually by telephone networks or satellites. These systems are faster and
more efficient than mail, personal meetings or telephone
communications.4 Currently, between 80 and 85 percent of EDI trading partners
communicate using a third party service provider.5
A.
GREATER EFFICIENCY BY LOGGING ORDERS WITH EDI
EDI messages are structured and coded in alphanumeric characters
according to a syntax already agreed upon by the sender and receiver. 6
cept as duplicated on paper). However, a fax received by a computer can be stored and
altered before printing. Chris Reed, AuthenticatingElectronicMail Messages - Some
Evidential Problems,4 SoFrwARE L. J. 161, 163 (1991). The terms compression and
decompression simply refer to the process whereby only the bits necessary to transmit the
symbols on a page are sent over the cable (compression), and the receiving fax
decompresses in order to duplicate the page which was sent (i.e. spacing and location of symbols
on the page).
2. See PCS Health Systems Inc. Activates New Interactive Computer Network for
Health Care Transactions,BUSINESS WIRE, Sept. 7, 1993. [hereinafterPCS Health Systems
Inc.].
3. Bruce Fox, To Tesco, EDI is Nothing New; U.S. Supermarkets Lag Behind UK
Chain; Electronic Data Interchange, CHAIN STORE AGE ExEcUTIVE wrrH SHOPPING
CENTER AGE, July, 1993 at 40.
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