The end of legislative islands

A huge problem for the Internet nation

Most of us don’t mind buying something on eBay for 20, 30, 40, or 50 euros/dollars but when it’s more than that…we think it twice. The reason is because we know that if something goes wrong, there’s little we can do about it. We don’t know the other party’s identity, where they live or the law in their country. And even if we knew, we’d probably do nothing about it. We live in a world of legislative islands. Traditional justice is slow, expensive, and complex. It is an inefficient system. No wonder why so many people think it’s not worth facing such a nightmare to recover such sums. Fear, lack of recourse… the end result is that millions of transactions every year never actually happen. The hidden treasure of eCommerce. An unrealised potential. eCommerce, as we know it now, is a shadow of what it really could be.

We have been talking about this problem for ages, however an answer has never been found yet. It’s a hairy problem with different names and different faces: authentication, lack of recourse, non-legally binding contracts and, lately, identity 2.0. People mistake contract validity with contract enforcement. Anyone can open an e-mail account with Yahoo and click on the “I accept Terms and Conditions” button. It’s a valid contract, but you are going to have a hard time trying to enforce it in the real world, in front of a real court of law. Who clicked on the button? From where? Was it you from this particular IP, or was it someone else surfing via a proxy? That’s not a contract, it’s a joke!.

At Tractis, we believe that slow, expensive and complex justice is not real justice. A world of legislative islands is OK for big companies with strong international presence, loads of time, money and expert lawyers; but it’s useless for an individual or SMB. We believe that when online agreements become a joke, you are losing business and money. We’re committed to find a solution. Tractis allows you to negotiate and sign online contracts that you can actually enforce in the real world.

Interfacing technologies and legislations

Tractis technology is capable of processing digital certificates issued by any certification authority, it being a government (i.e: spanish national ID card), a private company (i.e. Verisign), or a professional association (i.e. Bar Association). And we are not only talking about PKI, we’re actually opening Tractis to any authentication method: mobile authentication, OpenID, PGP, Biometric, or one-time-tokens to name a few.

And yes, Tractis is much more. It allows you to easily navigate and edit contracts, make public or private comments that only your negotiation team can read, lock a contract until you finish your changes, review and compare old versions, invite team members to join you, perform multilateral negotiations and grant permissions at an individual level (administrators, editors, readers, invisible?, signer?). Very soon you’ll be able to visit Tractis library, a library of contracts and clauses shared by the community so you can choose a template and start negotiating right away.

What I would like you to keep in mind is that most governments around the world grant the same validity to digital signatures than to their handwritten counterparts. This isn’t only happening in all European Union countries, but also in countries such as US, Canada, China, Brazil, Argentina, etc. In other words, a Tractis contract is valid and enforceable in all those countries.

Think about it. Contracts are everywhere. Software licenses, rental agreements, warranties, broadband Internet, financial services, used-goods auctions… you name it. Once you have an online contract that you can enforce, a world of possibilities opens to you, such as worldwide arbitration with legally binding decisions, or micro-insurance – “buy on eBay with Tractis microinsurance, pay us 5 dollars and, if the other party rips you off, we’ll give you your money back” (and we’ll recover the debt from the other party by enforcing the contract in his/her jurisdiction). Sounds interesting? It is. Tractis solves a very real problem that has been with us for years.

Justice is ripe for disruption

We’ve got as far as we can with informal means: e-mails, pseudo-anonymity, reputation systems. They are fine. But at Tractis we are focused on the formal communications, the 100 euros/dollars barrier where the parties take very seriously things such as authentication, proof-of-content, receipt, delivery, contract enforcement. Think real estate, cars, industrial machinery, jewellery, collectibles… high-end categories that amount for 40% eBay’s GMV last year. We mean real business.

It’s a big problem. It’s an enormous task. But it can be done. In the same way that Skype uses an open, independent and decentralised network to bring the telcos to their knees, Tractis uses the internet to compete with traditional courts and insurance companies where they can’t follow. We are interfacing technologies as much as we are interfacing legislations.

As we speak, we’re working on finishing Tractis and we hope to launch in the first half of 2007. We want Tractis to provide you with the tools to enable a low-cost, simple and fast international system of justice. Justice for, from and by the Internet nation.

Happy new year. It’s gonna be great. Help us to spread the word!

By David Blanco
Saved in: Business, Identity, Justice, Tractis | No comments » | 6 January 2007