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00% safe environment. The network itself may not be safe giving rise to the problem of eavesdropping. The Internet is an open network thus it is not a safe medium for information transfer. An intranet is only marginally safer. Messages may also have to be routed across the globe. Unlike a traditional communication delivery system a limitless number of people may be able to intercept the communication. Finally, the Internet is not owned by anyone and thus it is very difficult to attach blame to one person/State/company.

Nevertheless, the public perception is that the virtual world is a much more lawless place than the real world and thus the virtual world is a more inherently unsafe environment. Thus, to encourage e-commerce, governments have to take action to overcome this reluctance to go online. This perception can be countered through legislative and non-legislative means. Non-legislative measures include technological security measures, consumer educational programmes and the promulgation of Codes of Best Practice by business organisations. Laws can be enacted that engender confidence in online transactions. These laws may create two problems. Firstly, the law may not be technology neutral, since virtual transactions may be subjected to a stricter regulatory regime than those in the real world. Secondly, these strict laws that regulate virtual transactions may actually forestall the utilisation of new technology, that is the law may actually have the opposite effect of what the law was intended to achieve.  

What are the Purposes of Formal Validation/Authentication Rules?
GENERAL
Evidential/Authenticity
A signature acts to authenticate a written document by linking the signer with the signed document. The distinctive sign is attributed to the signer. Authentication is currently achieved in e-transactions through digital signatures and bio-metrics. In the future, quantum cryptography may be used which will be 100% secure and may render mathematical algorithms obsolete.

Ceremonial/Formal
The physical act of signing is a significant act. Thus, the person signing is made aware of the gravity of their actions.

Affirmation/Authorisation/ Non-repudiation
Appending a signature to a document expresses the signer's approval/authorisation of the contents of the document and signifies the intention of the signer that the document shall have legal effect and force.

Efficiency/Simplification
Related to the evidential reason above. The transaction that is the subject of the signed document is to be presumed legitimate. Certain documents, such as negotiable instruments, if formally correct and complete can change hands easily, quickly and efficiently.

Deterrence
The need for signatures will discourage certain transactions from being entered into, that is, a minimum threshold for certain contracts will be required. The need for certain formalities to be complied with offers protection for both parties to the transaction and prevents unfair transactions or transactions with a high risk of non-compliance from being finalised.

Identity
To ensure that each party to the contract is informed as to the true identity of the other transacting party.

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