E-Commerce Contracts

The proliferation of e-commerce technology continues to transform the way companies and individuals do business with each other.  As the opportunity for cross-border commerce greatly increases, the traditional physical indicia of ‘bricks and mortar’ businesses are disappearing. So are traditional paper-based contracts.

Whilst there have been no earth-shattering developments in the law specifically regarding to on-line transactions,  recent authorities indicate that electronic transactions are to be regarded as having exactly the same governing principles, at least in Australia and New Zealand, as “bricks and mortar” transactions. I deal with these in my forthcoming E-Commerce and the Internet – a Practical Handbook on Law, Practice and Precedents.

In Australia, the Electronic Transactions Act 1999 and the corresponding enactments of the various states (“the Australian legislation”, collectively) now codify the law conveniently, and recent authorities show that courts are not slow in drawing an intention to be bound from words in emails.   On the other hand, e-commerce may make the enforcement of a contract a little harder, but if a vendor has chosen to incorporate in, and choose the law of, say, Samoa, so as to make litigation almost impossible, a purchaser only has herself to blame if she feels cheated.  It’s not the law which is lacking; one’s lack of awareness is the problem.

US authorities point towards limitations on “shrink-wrap” as opposed to “click-wrap” contracts, but clicking the “accept” button is, apparently, as much a signification of consent as, say, entry into a place having had an opportunity to read terms and conditions displayed at the entrance or using a product having broken the seal on the package.
 
For over 100 years, there has been no limit on a machine making a contract on behalf of one party.  In Balmain Ferry , the machine was the turnstile at the terminal,entry through which after reading the termsand conditions signified consent; in Thornton v Shoe Lane Parking Ltd , a parking machine issued a label containing terms and conditions. In 2010, one clicks on terms and conditions produced by a computer program.  
 
No longer can Australian courts deny legal effect to electronic documents because electronic documents are not considered a writing; the Australian legislation deems an electronic acceptance, which is not limited to an electronic signature, sufficient to signify agreement.  

Before suggesting this  accessible, low-cost, user-friendly guide with some handy precedents, to my publisher, I looked for one in the market-place.   I couldn’t find one so I negotiated with my publisher… and then I wrote one.  I cover recent developments in Australia, New Zealand, UK, the USA and in the European Union, as well as developments of international treaties.  I include handy precedents for sales of goods and sales of services, as well as handy precedents dealing with privacy, outsourcing, international on-line arbitration and general website terms of use. It’s priced so that you’ll make your money back with the first e-commerce contract you write.  Production date is set for early November 2010.

By Yaakov Gorr