What Are the Legal Aspects of Electronic Contracts?
The traditional paper based contract law has rules that apply to matters such as jurisdiction, validity, formation of contract, modifications to contracts. In the world of online trading these are all issues that arise in online contracts and is a challenge to the traditional concepts of contract law.
Right now our industrial and service society is changing to an even more modern information society. One of the most important indicators that shows this change is the growing digital economy. But without any trust of the economic community in electronic contracts the new economy will not be able to unfold its full potential and the benefit for our society will stay behind the possibilities the new technology is able to offer. Either we can build up the trust in technical solutions for electronic contracts or we have to find a new concept for the exchange of goods in the digital age. It surely is easier to create a technical solution for legally valid Electronic Contracts than to redefine a legal mechanism that exists since centuries. But on the other hand a legal system that was generated thousands of years ago does not have the necessary basics to include modern ways of communication. We may have to rethink and to broaden our contract law to enable legally binding Secure Electronic Contracts (SeCo).
Thus, it is crucial to consider new legal issues raised by e-contracts and find whether the relevant legal framework is appropriate to meet new challenges posed by them or not. But before switching to the discussion, it is pertinent to give the definition of e-contracts. E-contracting is ‘the automated process of entering into contracts via the parties’ computers, whether networked or through electronic messaging.’ E-contracts are treated the same as offline contracts according to the Article 9 of the E-Commerce Directive 2000. However, despite the established legal framework for online contracts, new legal issues raised by them still cause certain challenges and vagueness to the specifics of contract formation. Even if the established legislation tries to deal with the issues online contracts raise, are they effectively addressed in practice? Do the rules of offline contracts really apply to online scenarios?
These fast and deep transformations are now being considered worldwide as the second most important revolution behind the industrial one. Using e-mail application for various services that different institutions and companies are offering to citizens enables lowering costs of printing, color, archiving requiring considerable space, and is also faster than service, and more quality.
Chris Reed, Computer Law (7th edition, OUP, 2011) p 268
Jeremy Newton, ‘Online contracts: web hosts beware’ (1999) 1 (5),EBL, 5
Andrew Murray, ‘Entering into Contracts Electronically: The Real WWW’ in L Edwards and C Waelde (eds), Law and the Internet: A framework for Electronic Commerce, (2nd edition, OUP, 2000) p 19