Proposed New Developments in Electronic Contracts, Web Page Advertisements and E-mails
If you respond to a web site that advertises goods for sale at a particular price – is the website provider bound to sell them to you at that price?
If you send an email accepting an offer, but it is never opened by the recipient (and then the price goes up) are you entitled to the goods at the price when you sent the email?
A Bill to update Australia’s electronic transaction regime was introduced into the Federal Parliament earlier this year. Since 2005 Australia has been party to the Convention on the Use of Electronic Communications in International Contracts and these new laws will bring the Commonwealth’s position more closely in line with international conventions. These law are not yet in force, but are expected to be in place later this year.
Essentially, for the purposes of the law of the Commonwealth (and unless otherwise agreed) the following will apply:
Time of Sending and Receiving an Electronic Communication
Knowing when (at law) an email is sent and when it is received may become very relevant if there are issues regarding whether or not a contract has been entered into by the exchange of e-mail or other ecommerce communications.
Sending:
An electronic communication will be deemed to have been sent at the time when it leaves the information system under the control of the sender of the electronic communication unless the electronic communication goes between two parties using the same information system (ie between work colleagues) in which case the electronic communication is deemed to be sent at the time it is actually received by the addressee.
Receiving:
Where a person has provided an e-mail address to the sender, the e-mail sent is deemed to have been received when it becomes capable of being retrieved by the addressee at the electronic address provided (whether or not it has actually been retrieved, open or read).
If no electronic address has been provided then the e-mail is deemed to have been received when it is capable of being retrieved and when the addressee has become aware that the email has been sent to that address.
How will the law deal with automated responses
A contract can be formed by the interaction between an automated message system and a person or between two automated message systems. Such contracts are not invalid, void or unenforceable on the sole grounds that no person reviewed, intervened or actually agreed to the actions carried out by the automated system.This is the fundamental change to older notions of contract law that required an actual “meeting of the minds”. If your computer systems are set up to automatically deal with e-mails or e-commerce transactions then any contract so created may be binding.
When does a web page communication constitute an offer capable of being accepted?
A request to form a contract made through an e-mail or web page advertisement that is not addressed to one or more specific parties (and is generally accessible to any party making use of the relevant information system) is not considered to be an offer capable of being accepted. Such e-mails are considered to be an invitation to the receiving party to make an offer which the sending party then has the choice as to whether or not to accept.
What this means is that if a business advertises goods on an internet site that are available by purchase via e-commerce then, unless there is a clear indication by the business that they intend to be bound, the advertisement is not an offer capable of being accepted. If a customer wishes to purchase the goods their response will be considered an offer to buy at the advertised price, following which the business can then accept or reject that offer.
Other changes
There are other changes that relate to electronic signatures and deeming provisions about where a contract is made (important for international or interstate transactions).
These changes are likely to become more and more relevant as electronic communications become more frequently used.
The Bill should be dealt with by Parliament shortly.
Tal Williams
Partner
T: +62 2 9390 8331
E: tal.williams@holmanwebb.com.au Disclaimer