Approximately eight years ago, an electronic invention called the Internet has initiated a phenomenon of exuberant fascination and economic upturn of individuals and businesses at the same time. The steady increasing amount of online users presents a beneficial medium through which commercial entities can advertise and sell their commodities without mentionable delay. Potential consumers have borderless access to products at competitive prices independent of regional distances.
Consequently, it is simply to ask the question "How do people contract over the Internet and are the familiar Common Law principles applicable?" This question is in particular in such an extent controversial and important to resolve, since there is no English court which has dealt with this subject so far.
As the traditional contract law has been developed and modified due to new and unfamiliar communication means over centuries, it may be that the existing principles are hardly applicable and insufficient to determine the formation of an electronic contract. Though, it is also imaginable that courts may easily alter the contract law rules to an appropriate extent as they already did with other communication methods.
This dissertation is concerned with the demanding topic of formation of contracts in the area of electronic commerce. It tackles legal issues in an environment of various forms of commercial and non-commercial activities using electronic means. As the fields of electronic commerce and practicing business online are constantly increasing all over the globe, legal issues of complex content are steadily challenging traditional law principles, courts, lawyers and legal scholars to develop governing laws and adequate solutions.
The dissertation faces and investigates how existing concepts of contract law may apply to cyberspace in a variety of contractual situations and which kind of issues may occur. Hence, the dissertation endeavours to provide contributions in order to clarify imaginable e-commerce conflicts and discloses possible solutions to dispel existing uncertainties of e-commerce users.
In order to determine why certain sectors of electronic commerce comprise a multitude of interesting and challenging aspects for every legal practitioner and every person operating online, it is necessary and expedient to provide a comprehensive overview of the broad field of e-commerce and to what extent the dissertation investigates present issues.
Table of Contents
1. THE PHENOMENON AND SIGNIFICANCE OF ELECTRONIC COMMERCE
1.1 INTRODUCTION
1.2 MEDIUM OF E-COMMERCE
1.3 HISTORICAL DEVELOPMENT OF E-COMMERCE
1.4 SIGNIFICANCE OF E-COMMERCE VIA INTERNET
1.5 METHODS OF ONLINE CONTRACTING
1.5.1 ELECTRONIC MAIL (E-MAIL)
1.5.2 CLICK-WRAP AGREEMENTS
1.6 LEGAL CHALLENGE OF E-COMMERCE
2. LEGAL GAPS OF ELECTRONIC COMMERCE
2.1 LACK OF ELECTRONIC TRANSACTION LAWS
3. THE OFFER IN THE ELECTRONIC CONTRACT
3.1 APPROACH
3.2 REQUIRED ELEMENTS OF CONTRACTING
3.2.1 THE OFFER IN CLASSICAL SCENARIOS
(1) DISPLAY OF GOODS FOR SALE
(2) ADVERTISEMENT AND UNILATERAL CONTRACT
(3) MECHANICAL PROCESS ON ONE CONTRACTUAL SIDE
3.2.2 APPLICATION OF OFFER RULES TO E-COMMERCE
(1) EMAIL
(2) MECHANICAL CONTRACTING
(3) UNILATERAL CONTRACT OFFER
(4) DISPLAY OF GOODS AND ADVERTISEMENTS
(a) PASSIVE SITES
(b) ACTIVE SITES
(5) OUTLOOK AND ADVICE
4. THE ACCEPTANCE IN THE ELECTRONIC CONTRACT
4.1 ACCEPTANCE OF AN ELECTRONICAL OFFER
4.1.1 TRADITIONAL POSITION AT COMMON LAW
4.1.2 COMMUNICATION OF ACCEPTANCE
4.1.3 THE POSTAL RULE
(1) ACCEPTANCE BY POST
(2) JUSTIFICATION AND CRITICS
4.1.4 POSTAL RULE AND MODERN COMMUNICATIONS
4.2 APPLICATION OF COMMON LAW TO E-COMMERCE
4.2.1 ACCEPTANCE BY EMAIL
(1) TECHNOLOGY OF EMAIL TRANSMISSION
(2) ARGUMENTS IN FAVOUR OF POSTAL RULE
1. DIGITAL EQUIVALENT
2. EMAIL INSTANTANEOUS
3. COMMON AGENT
4. TIME OF COMMUNICATION BY EMAIL
5. PLACEMENT OF RISK ON OFFEREE
(3) ARGUMENTS AGAINST POSTAL RULE
1. EMAIL “ALMOST” INSTANTANEOUS
2. DELAY OF TELEX SIMILAR TO EMAIL
3. SENDER HAS CONTROL OVER COMMUNICATION
4. EXCEPTION TO GENERAL RULE
5. INTERNET SERVICE PROVIDER NO AGENT
6. SIMILARITIES OF INSTANTANEOUS AND NON-INSTANTANEOUS METHODS
7. CHOICE OF COMMUNICATION METHOD CONSENSUAL
8. DETERMINATION OF APPLICABLE LAW
9. RECEIPT RULE APPLICABLE IN FOREIGN JURISDICTIONS
10. GENERAL RULE UNDER VIENNA SALES CONVENTION 1980
11. GENERAL RULE OF THE MODEL LAW ON E-COMMERCE 1996
12. GENERAL RULE OF THE UN CONVENTION ON THE USE OF ELECTRONIC COMMUNICATIONS IN INTERNATIONAL CONTRACTS 2005
4.2.2 ACCEPTANCE BY CLICK-WRAP
CONCLUSION AND RECOMMENDATION
Research Objectives and Key Themes
This dissertation investigates the formation of electronic contracts under traditional Common Law principles within the United Kingdom. Its primary research question addresses whether established contract law, developed over centuries for traditional communication, remains sufficient to govern modern digital transactions or if judicial adaptation is required. The work focuses on identifying legal gaps in online contracting, specifically regarding the mechanics of offers and acceptances.
- Applicability of traditional Common Law contract formation to the internet.
- Legal classification of online commercial actions, such as website displays of goods.
- The "postal rule" versus the "general receipt rule" in the context of email and electronic communications.
- Challenges of jurisdiction and applicable law in borderless electronic transactions.
- Strategic recommendations for e-merchants to manage contractual risk.
Excerpt from the Book
(1) DISPLAY OF GOODS FOR SALE
Most of the judge-made contract law has been developed long time ago, when negotiations and bargains took place in an analogous way in typical retail stores. Hence, it is necessary to highlight the principles, which have been established in cases involving traditional sales surroundings in the physical world, and examine the controversies occurred after the decisions. Subsequently, the dissertation establishes if the findings are applicable to e-commerce.
In order to determine whether or not a contract has been concluded it is crucial whether or not an offer was made.
But the identification whether goods on display in a shop window or on a supermarket shelf are an unequivocal offer or an invitation to treat has caused many legal problems in the past. This legal question is relevant to online commerce and may be exacerbated because of the use of automation processes by Internet businesses that launch websites and other e-commerce methods as part of their operation.
A similar issue arose in 1999 by an incident involving the UK online retailer Argos, when Argos accidentally displayed 21-inch televisions for £2.99 instead of £299 on its website. Nearly one million orders were taken before Argos noticed and corrected the mistake, with one purchaser placing an order for 1700 sets alone. Argos subsequently refused to fulfil the orders and argued that no contract was formed. At least one purchaser issued proceedings against Argos for breach of contract, but the case was settled out of court so, unfortunately, there does not exist any legal precedent on the formation of online contracts generated by the incident. Also the repetition of a similar incident in 2005 by Argos does not clarify the legal issues, where Argos again made a pricing error of a television on the website for £0.49 instead of £349.99. But this time Argos has excluded the formation of contract of items incorrectly priced through accepting its terms and conditions. Hence, it is still unclear whether the Argos display on the website was an invitation to treat or an offer which could have been accepted.
Summary of Chapters
1. THE PHENOMENON AND SIGNIFICANCE OF ELECTRONIC COMMERCE: This chapter introduces the rise of e-commerce, defines the medium, and outlines the core legal challenges arising from internet-based trade.
2. LEGAL GAPS OF ELECTRONIC COMMERCE: This chapter analyzes the lack of specific electronic transaction laws in the UK and discusses the government's minimalist regulatory approach.
3. THE OFFER IN THE ELECTRONIC CONTRACT: This chapter explores how traditional Common Law principles of offer and invitation to treat apply to website displays and online automated processes.
4. THE ACCEPTANCE IN THE ELECTRONIC CONTRACT: This chapter examines the critical timing of contract formation, comparing the traditional postal rule with modern requirements for actual communication in email and click-wrap agreements.
Keywords
Electronic Contracts, Common Law, Offer and Acceptance, E-Commerce, Postal Rule, Internet Law, Digital Communication, Click-wrap Agreements, Contract Formation, Legal Uncertainty, Cyberspace, Electronic Mail, Jurisdiction, Consumer Protection, Contract Law Principles.
Frequently Asked Questions
What is the core subject of this dissertation?
The dissertation examines the formation of electronic contracts under traditional Common Law principles, specifically within the jurisdiction of the United Kingdom, to determine how established legal concepts apply to online transactions.
What are the primary thematic areas covered?
Key themes include the legal status of online advertisements, the application of the postal rule to emails, the classification of website interactions, and the challenges of determining jurisdiction in borderless trade.
What is the main research objective?
The primary goal is to resolve uncertainties regarding whether existing contract law is sufficient for e-commerce or if new interpretations and modifications are required by the courts.
Which scientific methodology does the work employ?
The work utilizes legal analysis by comparing historical case law, such as the "Boots Cash Chemists" and "Entores" cases, against modern electronic scenarios and global conventions like the CISG and the UNCITRAL Model Law.
What topics are discussed in the main body?
The main body details the transition from traditional to electronic communication, the legal definition of offers versus invitations to treat in virtual settings, and an exhaustive analysis of the postal rule in the digital age.
Which keywords best describe this work?
Primary keywords include Electronic Contracts, Common Law, Offer and Acceptance, E-Commerce, Postal Rule, Digital Communication, and Contract Formation.
How does the author characterize "click-wrap" agreements?
The author treats click-wrap agreements as an instantaneous form of contracting, noting that they involve direct machine-to-machine communication with an error-checking mechanism (checksum), thereby requiring receipt for a binding agreement.
What is the significance of the Argos case studies?
The Argos cases serve as practical illustrations of pricing errors on websites, highlighting the legal uncertainty regarding whether website displays constitute an offer or an invitation to treat, which remains a debated area.
Why does the author advocate for the receipt rule?
The author argues that the postal rule, designed for 19th-century mail delays, is ill-suited for modern technology; the receipt rule offers greater commercial certainty and aligns with international business practices.
- Quote paper
- Timo Siemer (Author), 2008, Formation of Electronic Contracts under traditional Common Law Principles, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/176367
