The Law of E-Commerce

side honor has ample been recognized as reckoning freedom of fill. In near opposite words, the state has non, gener ally, laid vote out economy which has interfered with the freedom of parties to agree the hurt of their captures. In more than recent years, on that point handle been a number of inroads into the belief of freedom of twitch, in particular with respect to consumer protection. It authentic much re principal(prenominal)s the go that position impartiality does provide parties with consider able-bodied flexibility some(prenominal) as how they conclude ingests and the legal injury that they include.Offer and borrowingIn de lineine for a weigh to be fertilisation downstairs English law it requires an tin, word meaning, mark to create legal relations, consideration and capacity. With wishing to electronic commerce, the experienceual requirements need elaborate consideration.OfferA provider offers an unlearned offer which could be beha veed by every potential client. If the guest informs the provider that he or she accepts the offer , there bequeath be a backrest flummox. On the differentwise hand, the provider could provide to the guest what is known in legal equipment casualty as an invitation to treat. This is non a binding offer, solely an invitation for the guest to stag an offer, which the supplier abide then accept.It is very classic for suppliers wanting to sell goods through on line to ensure that their websites and different on line advertisements atomic number 18 understand as invitations to treat. If a suppliers website constituted a formal offer to provide current work or goods, the supplier may be in br all(prenominal) of the local anesthetic laws (both civil and criminal) if there be positionual(a) kind of guests who would non ordinarily be entitled to mould the purchases which atomic number 18 creation offered.For subjects, the careen of alcoholic products to m inors and guns or other weapons into all countries, when some countries trim back more addressfully the tidy sum in which guns or other weapon tin coffin nail be purchased. espousalEnglish law is generally very flexible somewhat how an offer atomic number 50 be accepted. Acceptance could be communicated by an acknowledgement (e.g. email) or by physical act much(prenominal) as the shipping of the goods. What is more perplexing under English law is when bridal takes situation particularly in an ne devilrk resolution.The general encounter is that an offer is not accepted until acceptance is communicated to the offeror. So ut around there is no case relating to this recoer which applies to blesss do all over the internet. But however, there is case law which applies to other fast forms of converse, such as telexes and facsimiles, provided that such communication theory are direct during the agate line hours. With the outside(a) use of electronic trade, the qu estion of when each business day begins may be difficult to de terminationine particularly when the client kittynot easily work out where the master of ceremonies accessed is found.The major censure to the general rule on acceptance concerns acceptance by post. In the majority of cases, acceptance takes rig when the acceptance is posted and not when it is stock by the offeror. The postal rule meat that the contract provide already dupe been make and the offeror pass on be bound to complete his obligations, provided that the other fel natural depressionship can prove that the acceptance letter has been posted.In some ways, notwithstanding its instantaneous nature, acceptance by electronic heart and soul does have similarities to postal acceptance. A uncouth carrier will assume the tariff in transmitting the message (in this instance the carrier is the meshing Provider). With this kind of communication, it is not easy to determine the receipt with respect to email sent over the internet. What this path is that the sending party will not know when or if the acceptance has been received. pr unrivalled the fact that it is not clear when acceptance of an offer will occur, each supplier should take care to consider how and when acceptance will take place. This has long been the ruler adopted in EDI contracts, and those doing business on the network have to ensure that they do not leave anything out for challenge later in the contract. Any supplier should have no difficulty in exercising control over the pick oution in which the that contracting mathematical process is conducted.Unlike the Internet most real world contracts are quarter on a soulfulness to person unlesst, all by a side to sheath conversation or verbally over the ph maven. By contrast, most Internet contracts are remotely made, impersonal and above all automated. If there is any am superuity or uncertainty over the transaction alone a more credibly rejoinder to whethe r there was a contract at all.Contract term and obligationEnglish law gives the contracting parties the freedom to piece more of the scathe upon which they will contract the business. But this will be subjected to two areas where the law will imply scathe. First, certain damage will be implied by statute. Secondly, the law will imply impairment skilful to give business power to a contract. This happens where either parties have forget to deal with an issue expressly in bunch where they would have done so had they thought virtually the issue at the time f the contract was finalized.The main impairment implied by statute in contracts to sell goods is the deal of Goods conduct 1979. This damage will imply to any contract that* the goods will be of satisfactory tint* where expressly or impliedly known by the supplier, the goods will be intellectably beseem for the purchasers purposes* where goods are sold by fictional character to a description, the goods will corres pond to that description. This term is particularly important for internet gross r compensateue where a buyer may progress to a purchase of certain goods having visited a suppliers website.If a supplier provides service, the implied term for the services will be that they will be dealt with tenable skill care, and within a reasonable time frame in (Supply of Goods and Services work out 1982).Under the unsporting Contract footing modus operandi 1977, these terms cannot be allayed in any circumstances with respect to consumers. Sometimes in the contract for a business, a supplier can exclude financial obligation for breach of these implied terms where it is reasonable to do so.Not lone(prenominal) the unsporting Contract equipment casualty flirt 1977 in which the implied terms under the Sale of Goods Act can be exempted, plainly the Act too imply other liability can be exceptional as far as the services concerned. The main provisions deal with* liability for death an d personal injury this cannot be exempt under any circumstances* liability in inadvertence other than for death and personal injury this can be exempt where reasonable* liability to a consumer this can be exempt exclusively where reasonable (except in the case of liability for breach of the terms implied under the Sale of Goods Act* liability when traffic on the suppliers standard terms and conditions a supplier can only be exempt liability to his nodes where it is reasonable to do soThere are a number of matters with get word to the reasonableness that the dally will take into account when inquiring each case individually. The questions are doubtless related to the insurance carried by both parties what other sources were open to customers and whether the buyer knows or ought to know the exclusions and go underations clauses incorporated into the contract.If there are any ambiguities in the terms of the contract, the court will be in choose of the customer. And the s upplier will be left-hand(a) to prove that his exclusions are to be reasonable with respect to doing the business.No doubt that creationy online contracts will incorporate standard terms and publicy exchanges will be directly to consumers, the Unfair Contract Terms Act will play a role in determining the painting a supplier may face in providing the services or goods victimisation the Internet as a communication mechanism. The UCTA will only be use the English law system for a contract of consumers if they are based in the UK and for a contract where there is a choice of law other than English law, when it is selected for the purposes (mainly or wholly) of essay to avoid the erect of UCTA.Apart from the Unfair Contract Terms Act, there is one exception with regard to the contracts conducted over the Internet. It concerns the external supply contracts where the offer and acceptance of the sale of goods take place in different countries or the goods are physically shipped fr om one jurisdiction to another. some(prenominal) companies wishing to sell goods through the Internet could use this exception whereby the purchaser accesses the server to gear up goods from other location which is orthogonal of the English jurisdiction. It should be realized that this exception can be applied even where the English law is governing law of contract.When a contract is considered to be an international one, the Unfair Contract Terms Act will not intervene and a supplier is free to limit or exclude his liability without having to look at the UCTA to see whether if it is reasonable to do so. Although it is likely to apply to sales to businesses only in the light of certain parallel consumer commandment the Unfair Terms in Consumer Contracts Regulations 1994.In add-on to UCTA, any supplier considering doing businesses over the Internet must also gestate in mind the impact of the Regulations when relations with the consumers. These Regulations incorporate into Engl ish law of the European Community Directive on Unfair Terms in Consumer Contracts, which provides the entire states of the European Union cases in which it is unfair to limit or to exclude certain unspoileds of consumers by contract terms. If the terms of the contract is considered to be unfair, then it will be verbalise as void.Furthermore, the Regulations could assist the consumers if the consumers are engageed to wage a penalty in the outcome they fail to complete their contractual obligations and when the supplier restrict the consumers legal recourse in the event of a breach (for instance, by making the consumer go to arbitration). It is for this reason that it was suggested that the international supply contract with the exception in UCTA will only be of real benefit to those selling goods to businesses.Furthermore, there are also other helpful pieces of legislation which a consumer can depend on* The Consumer Credit Act 1974 if a customer has paid for the goods by cred ence neb and the value of each item is one C or more then the credit card company assumes the same responsibilities as the supplier does and a consumer can make a complain to them.* The Misrepresentation Act 1967 may give a customer the right to return goods and have his cash back if he/she has been told something factual about them that made him/her decide to buy moreover which turns out to be untrue.* The Trades Description Act 1968 if a vender makes a particularly gross misrepresentation about an condition or if he or she is on a regular basis misrepresenting the qualities of any goods then this may representative a complaint to and investigation by Trading Standards who have the power to prosecute.* direct Prices Regulations the law does not control sets as such but does requires that prices are accurately displayed or advertised. If a vender has falsely displayed a price a customer cannot force a sale at that price but it may secondment a complain to Trading Stand ards.So how can businesses conducting sales over the Internet protect themselves from the inevitability of determine errors? therefore thousand of runs can be determined with online retailers before they can detect the problem. When the prices are incorrectly displayed and contracts are formed, the sellers are hale to choose between accepting that price as a financial sledding in goodwill or trying to consider the contracts under the doctrine of slanted luxate.Otherwise to avoid the contracts to be binding with customers with the incorrectly pricing, the sellers should employ protective methods of contract formation that assist them to prevent loss.The risks and be of pricing errorsMany online errors result from the fact of proofreading drop offs and software problems, but a chance of steals keep increasing because many sellers online hightail it to change their prices more often than customary and convenience high street stores 1. Furthermore, online businesses pract ice sales self-loadingally and therefore lapse the added safety of having the human eye embody the price.The Internet, with all the richness of information resources, can cause some harm. Many of the online shop combine with chat rooms, emails and bulletin get on which in turn can result in a flood of coifs and thousands of sales being processed before the sellers is able to pinpoint and correct the mistake. For instance, in 2001, Kodak offered a 329 digital camera for speed of light 2. At the time the case was decided that Kodaks mechanical verifyation email formed legitimately binding contracts 3, and in the end, the company was strained to honour the sales. The incident caused the company important losses of more than 2 cardinal 4. Kodak argued that, if there was a contract formed, that contract could be void by reason of mistake (i.e. the price of the goods offered was so low that there was obviously a mistake).Kodaks refusal to execute orders was widely reported. The cat valium law lot was that Kodak would lose any actions brought against it because 1) its standard terms were unfair to the consumer 2) a camera deserving 300 being sold as a special offer for 100 was not an obvious mistake and 3) Kodaks resolution not only to acknowledge the sale, but used the words this contract, Kodak agonistic to accept the orders.In another example involving Argos, a inventory online retailer, who advertised a TV on its website for 2.99, one one-hundredth of its normal price. Argos received orders worth over 1 millions, none of which were acknowledged. Argos argued that there was no contract between the customers and itself, because Argos did not confirm any orders as far as the product concerned. The case was decided confidentially and it is believed that Argos did not fulfill the majority of those orders.The ingenuous doctrine of biased mistakeWhen the online seller make honest and honourable mistake on pricing which result in big losses, their mistake could be considered based on the doctrine of unilateral mistake. What this office is that one partys mistake could make the contract voidable when the mistake concerns a rudimentary assumption on which the contract was formed and has a material effect on the agreement that is adverse to that party 5. Furthermore, the naturalized party must prove that a) the mistake is such that enforcement would be unconscionable, or b) the other party had reason to know the mistake or should have known that the price was a mistake 6.An unconscionable contract is defined as no man in his senses, not under delusion, would make.and which no fair and honest man would accept. 7. The contract, if was formed, must cause grimness to the effected party 8. In addition to this, the court would look to see whether the sale would cause the seller a big loss and not merely a diminished profit 9.Alternatively, the online seller could also prove that the customers had reason to know or ought to know th at the price was wrong 10. land to know means that a person has a duty to another and he would not be acting adequately in the protection of his own intimacys were he not acting with reference to the facts which he has reason to know 11.Rescinding the contract is the only remedy option under the unilateral mistake it is not a basis for reformation 12. It means that the seller cannot ask the customer to go ahead with the sale at the actual price. But instead, the seller must cancel all customers order and re-offer the good at the actual price. However, after the re-offering the good the customer might not show any more interest in purchasing it.In some instances, the court might stand firm to order rescission. The court will consider whether one party has so detrimentally relied on the contract it would be inequitable to order rescission 13, will be disadvantage by rescission 14, or cannot be returned to the status quo 15. Furthermore, the court might refuse to rescind the contra ct when the mistake resulted from the sellers negligence or lack of due care 16.Case of an e-seller policyvirago.com provides an example of an online seller who has incorporated a policy into its website to deal with potential pricing mistakes. It provides a direct link to its pricing policy from its term of use. In its term, Amazon states that the price of any products is not confirmed till the customer completes the order. Additionally, Amazon further states that the items in the catalogue may be mispriced and the price will be verified before its sent out. If the actual price is tear down than the stated price, Amazon will charge the lower price and ship the good. On the other hand, if the actual price is higher, Amazon will either contact the customer or cancel the order and notify the customer of its cancellation.Despite all these precautions, however, Amazon has been knotted in a number of agate line concerning the incorrect pricing. Recently, in the UK Amazon made a mistak e in advert iPaq handheld computers priced at less than one fiftieth of the retail price. But fortunately, Amazon has managed to avoid big losses because its conditions of sale explicitly stated that the contract is not formed till the good was dispatched, loose Amazon the right to cancel most of the orders it has received.The contents of its conditions statement were the same throughout. On the same token, in America, Amazon mistakenly put on sale a memory module priced at 10% less than the actual price and DVDs priced at 75% of their list price. Amazon in America emailed notices to customers, in according to their pricing policy, requesting if they could pay for the actual price of the products or cancel their order completely. Several customers filed complaints to the federal Trade Commission and the Better trade Bureau. But it is not clear how these complaints have been resolved.ConclusionIn short, to avoid losses caused by pricing errors, online seller can employ a few meas ures ensuring that his business is protected. One of the thing the seller should do is he should include the terms and conditions in the contract stating that he reserves the right to cancel orders and an explanation that the customers order only constitutes an offer, which the seller can accept by charging the customers credit card or by dispatching the good. In addition, the customer should be mandatory to assent to those terms and conditions by clicking I accept during the checkout process.The English cases steer that the terms of a contract are binding if a seller has made sufficient efforts to bring the terms to the direction of the buyer and if the parties agree to the terms. It is very important that the buyer who buy things online ought to see and accept the terms before an order is placed. However, the terms should allow the sellers to reject orders at any stage before dispatch. Any automatic response to an order ought to let the buyer know that a binding contract has not been entered into and the price is subject to change until it is shipped. Although these precautions has taken place, a seller online may still face potential litigation and consumer complaints, concerning any incorrect prices confirmed by auto-reply emails.The Internet is undoubtedly will arouse in importance and it is no more than a tool of communication just like the telephone, telex or fax. Furthermore, electronic contract is becoming more common and right now a positive percentage of both commerce and consumer contracts is reason in cyberspace. Although e-commerce contracts suffer some problem, but they can be overcome by applying the three basic questions, when was the contract cogitate? What are the terms of the contract? and where is the contract governed? These questions would help us to deal with any contract whether it is formed electronically or by more traditional means.It is the moralistic equivalent of being given too much change in a supermarket and pocketing t he money instead of handing it back ( tip Thompson, technology analyst).