Here is the Japanese repsonse which also contains our inquiry.
---------------------- Forwarded by Mark Taylor/HOU/ECT on 05/08/2000 10:32 
AM ---------------------------


Yasuyoshi.Goto@BAKERNET.com on 03/14/2000 01:23:57 PM
To: Mark.Taylor@enron.com
cc: Alan.Aronowitz@enron.com, Paul.TYO.Davis@BakerNet.com 
Subject: RE: EnronOnline in Japan


Dear Mark:

I refer to you e-mail of March 3 sent to my partner, Paul Davis.  I am in 
charge
of our Information Technology/E-Commerce Dept.  Please accept my apology for 
not
having responded earlier.

Please see our comments below.

Should you have any questions, please let us know.

Best regards,
Yasuyoshi Goto

> -----Original Message-----
> From: Mark Taylor [mailto:Mark.Taylor@enron.com]
> Sent: Friday, March 03, 2000 9:17 AM
> To: Paul.TYO.Davis@BakerNet.com
> Cc: Alan Aronowitz
> Subject: EnronOnline in Japan
>
>
>
>
> Dear Paul:
>
> I believe Alan Aronowitz and Mark Haedicke of our office met
> with you a week or
> so ago and mentioned that we would need advice from you
> regarding the use of our
> internet trading website with customers in Japan.  Below is a
> list of initial
> questions regarding which we would be grateful for the
> benefit of your advice.
> For your background information as you consider these
> questions, be advised that
> counterparties must sign a written "Password Application"
> which provides that
> the counterparty intends to be bound by agreements entered
> into by "clicking" in
> the appropriate spaces on the website.  Please feel free to
> contact me with any
> questions you may have.  I can be reached either by e-mail at
> Mark.Taylor@enron.com or by telephone at (713)853-7459.
>
> 1.   Have relevant regulators in your jurisdiction made any
> statements regarding
> marketing of or dealing in any of the following types of
> products through the
> internet or other electronic systems:
>
>      Commodity transactions relating to oil, gas, electricity
> or other energy
> commodities, whether derivative
>           transactions (cash settled) or physically settled.
>      Financial derivatives - i.e. interest rate, foreign
> exchange or credit
> derivatives.
>      Weather derivatives.
>      If so, please could you provide us with a brief summary.

Our research has revealed no statements of regulators in Japan in connection
with the marketing or dealing in the above types of  products through the
internet or other electronic systems from publicly available source.  We will
let you know if we find any previous or future statements.

>
> 2.   Do any specific laws or regulations exist in your
> jurisdiction which would
> prevent or in any way impact upon marketing or trading of any
> of the products
> set out in question 1 above through the internet?  In
> answering this question
> please address issues relating to contractual formation and
> enforceability of
> contracts entered into via the internet.  In particular, if a
> transaction
> entered into via the internet is enforceable under U.S. or
> U.K. law and the
> transactions contain a choice of such law, will such
> transactions, including the
> choice of law, be enforceable in Japan?


We do not have any specific laws or regulations which would marketing or 
trading
of any of the products set out in question 1 above through the internet.  
Under
Japanese law, formation of any contract does not require any formality.

Japanese law generally does not require any formalities for offers or
acceptances to be valid as such. There is no Statute of Frauds, and parties 
may
make most types of contracts orally. If there is enough evidence establishing
that the offeree agreed to the terms offered, an offeror may rely on it. In 
most
simple sales contracts for consumer goods, for example, it would be easy to
prove that the customer agreed to pay x yen for product Y. The Seller's
electronic records showing that the customer clicked on the icon to buy 
product
Y should be enough in this context.

In more complicated contracts, the structure of the seller's Web pages should 
be
carefully designed. Having no court decisions, we have no definite answer to 
the
question of enforceability of shrink-wrap agreements in Japan. However, the
legal implications of the Web-wrap, the online version of shrink-wrap, may be
somewhat different from shrink-wraps (e.g. licenses for software sold over the
counter).  Under a typical shrink-wrap license in the real world, for example,
the customer cannot break the wrapper until after the customer purchases the
product. However, in an on-line environment, a customer has a choice to click 
on
an Accept-to-Buy icon before the customer purchases the product. Further, 
with a
carefully compiled sequence of screens or pages which would in effect be able 
to
let the customer read the terms and conditions before rushing to click on the
icon, it would be easier to prove that the customer read the terms and
conditions than in a typical shrink-wrap license situation. Unlike shrink-wrap
in the real world, the seller may obtain an electronic record showing that the
customer clicked on the icon. Given these differences, the result possibly may
be more favorable to sellers online than to those using shrink-wrap licenses.

If a transaction entered into via the internet is enforceable under U.S. or 
U.K.
law and the transactions contain a choice of such law, such transactions,
including the choice of law, will be enforceable in Japan.


>
> 3.   If the answer to either of question 1 or 2 is "yes",
> please indicate
> whether the impact of any relevant statements, laws or
> regulations will differ
> depending upon whether (a) the relevant internet site is
> maintained in your
> jurisdiction or elsewhere; or (b) the party effecting the
> marketing/trading
> through the internet is locally licensed.

N/A

> 4.   Please confirm that by marketing to or trading with
> counterparts in your
> jurisdiction via the internet local relevant regulatory
> bodies/local laws or
> regulations will not consider the party maintaining the
> relevant website to have
> established a physical establishment/branch in your jurisdiction.

We do not have any clear cut answer to this since we have no relevant laws,
regulations, or court cases.  So long as  the party maintains the relevant
website with a computer server located outside Japan, the likelihood of 
Japanese
regulatory bodies to consider that the party maintaining such website
established a "physical" establishment/branch in Japan is negligible.


>
> Thank you in advance for your attention.  We look forward to
> hearing from you.
>
> Sincerely,
>
> Mark Taylor
>
>