Electronic Contracts For Modernized World: Understanding Offer And Acceptance

The Comparison

Discuss about the Electronic Contracts for Modernized World.

Electronic means of contract have been touching new heights in this modernized world. All the contracts between huge organizations are being used by the means of electronic medium.  The entire business contract between big and renowned companies has been under this factor only to form any sort of an agreement. The rapid growth in the electronic medium for these companies, the contracts between these companies and its clients has been executed in the process of electronic means. The wide spread use of Email, fax and online resources have been utilized by the people across the world. It is because of these reasons, various social networking websites have been established as well because of which the companies are being able to connect with the general public across the world. Not only this, these social networking sites are being used to advertise the products of the company, which are being offered by the companies. Hence, it has to be stated for a fact that as the world is approaching towards the better process of modernization. [1]

The contract as made in the electronic form and other forms, it should be noted that Authenticity is one of the most important factors, which is to be considered in this scenario. In any sort of any electronic contract, be it with the companies or any individual, the authenticity of the contract greatly depends upon how the offer is being made on the online platform. For this reason, all the companies have to make sure that its contract has been perfect enough for the people to believe the same and be as per the rules and regulations of the same. Once the person, who is being involved with the contract, is considering the whole aspect reviewing all the clauses and other aspects of the whole contract should authenticate it. Therefore, before entering any sort of an electronic contract, all the parties involved with it should be focused on the fact that how much of this contract would be trusted when compared to that of other means of contract. [2]

In Australian Law, or any other law for that matter, the simple establishment of offer and acceptance comes off the pretext of what they know a legally binding contract as (Clarke, 2012). Technically, the aspects of these two subjects in contract law is pretty clear, there must be 100% consensus between the two or more-than-two parties coming forth to get into a contract. The grounds of these terms were established in the case study of Smith vs. Hughes (Court of Queen’s Bench [1861] LR 6 QB 597) wherein the intention of one Smith was to sell oats to another Hughes, irrespective whether they were old or new production-wise. Herein, Hughes who used to train racing horses bought the oats because he thought they were old and racing horses like old oats more. However, this wasn’t established as a criterion and hence when they entered into an agreement, none of the parties could withdraw since the roles of offer and acceptance were given birth to. In the following paragraphs, we shall dwell upon how offer and acceptance may take place between the parties. [3]

Offer and Acceptance

When a party is offering another party and the other party has accepted the offer then both order and acceptance is present in it. Once an offer is made by one party it is considered as an offer and once the offer is accepted by the party then it is known as acceptance. 

According to Moles and Sangha (2003), offer is nothing but a specific promise to do (or not do) a set of tasks or acts, in order to achieve the ultimate objective of the contract within a stipulated period of time. An offer comes through different forms, i.e., offer of employment, offer to sell a particular product of service, etc [4]

Offer might take place in the following mannerisms:

Offer to a subject: Individual or to the world at direct.

An offer can be directed to an individual or a group of individuals. However, it must be noted that as stated in the pointer, an offer need not be directed to simply just one individual or a bunch of them. It can be holistically offered to the world at once. This was creased, folded and served to the law world through the case of Carlill v Carbolic Smoke Ball.

Under this case, the carbolic smoke ball producing company advertised in a leading newspaper about influenza could be avoided through the prescribed means of consumption of three balls a day for 2 weeks; if anyone caught the influenza nonetheless, they would be offered 100 pounds. A certain Mrs. Carlill purchased the balls, caught influenza irrespective and sued the company for 100 pounds after being denied the same (Clarke, 2012).

An offer must be thoroughly distinguished from an invitation to deal. The underlying objective of an offer is pretty simple; unlike invitation to deal, it attempts to establish a proposal which would conclude as an agreement. In an invitation to deal, it would merely be an invite to the other party to come forward and further negotiate the involved compensation.

One of the leading cases to establish offer against invitation to deal would be the Pharmaceutical Society of Great Britain v Boots (Court of Appeal [1953] 1 QB 401; [1953] EWCA Civ 6; [1953] 1 All ER 482, [1953] 2 WLR 427). In this case, the English Court of Appeal communicated clearly about how the taxonomy of an offer would have commercially affected the case study. [5] 

Acceptance might take place between two parties (or more) in the following mannerisms

Offer v Invitation to Deal

In any contract, when the offeree accepts the offer of the offeror, it is termed as acceptance. In other words, the offeree has just given consent to his parts and roles of the contracts, and is legally bound to abide by them, unless and until the contract is amended. The performance of a certain act with correspondence to the offer having been made to the offeree guarantees the perimeters of acceptance (Emery and Associates, 2016). Acceptance between two parties (or more) can be communicated in the following ways:

Unless and until an offer is accepted by the offeree and communicated via written means to the offeree, the offer stands revocable. It was clearly established in Powell v Lee(1908) 99 L.T. 284; Robophone Facilities Ltd v. Blank [1966] 3 All E.R. 128. Prior to acceptance, an offer may be withdrawn.

In the case of unilateral contracts, acceptance is merely performed through the means of simple execution of the acts required to do so. The offeree might began his performance of the act prior to the offer being revoked, and the issue of what happens if the offeree has not concluded his act still remains a mystery in the clouds of legal studies.

However, in the case study of Daulia v Four Millbank ([1978] 2 All ER 557), the grounds were made clear through the following statement.

“Whilst I think the true view of a unilateral contract must in general be that the offeror is entitled to require full performance of the condition which he has imposed and short of that he is not bound, that must be subject to one important qualification, which stems from the fact that there must be an implied obligation on the part of the offeror not to prevent the condition becoming satisfied, which obligation it seems to me must arise as soon as the offeree starts to perform.  Until then the offeror can revoke the whole thing, but once the offeree has embarked upon performance it is too late for the offeror to revoke his offer.”[6]

Some agreements are created without the clear presence of offer and acceptance. If we pick up the case of Clarke v Dunraven ([1897] AC 59), Clarke and Earl of Dunraven entered into a yacht race along with yachts from Yacht Racing Association which provided the fact that if a yacht were to be damaged by means of anyone’s negligence, they were to be liable to pay for damages. In this case law, Clarke’s yacht damaged Dunraven’s yacht which made Dunraven liable for the payment of the same (Clarke, 2010).

Offers on the Internet

It is also to be noted for a fact that there are certain offers, which are being made by companies all across the world regarding the products, which are being offered to the general, public. Any fast food joint or any sort of a fitness company, i.e. gym or any other agency, can make these offers. These companies with the help of social media are making most of the offers only. The offers as being made by the companies on the internet are actually for real and if any person is actually accepting the same would be provided with the stated of electronic agreement or contract. The basic thing, which should have ben considered by the people is the fact that if any sort of an offer is being made by any person, on the internet, that nobody had attended him with the same issue. Whenever a company is actually going to start its own corporations, it is important to actually keep and eye as to how the whole process was being trusted by the people. And anyway, if any company is offering its details in the public, without being any sort of a hesitancy for the same. Initially the companies just give an offer to the general public in the same form. Hence, the contracts as it has been made in the internet should be having more conditions regarding the same and hence should be noted that any company having these forms of contract should be giving all the details as per is “conditions apply”. [7]

The Australian law also allows any person to withdraw from the offer, which has been accepted by a person, be it in the form of electronic contract or in any other manner. As per the Section 34 of the contract act of the country, a person can actually withdraw from its activity, which was offered to him or her by the means of an offer made. The electronic contract is also managed with the same and the section 42 (3) states that any person, who has accepted the offer online, has the right to move away from the contract by withdrawing from the offer before the date of its execution. Therefore, there is no limitation, as such, to any party of the contract. If there would be any limitation, then it is obvious that the contract would not be executed in the best possible manner by either of the parties. For this reason, the law has been introduced by the government of the country to make sure that no parties will have to face any sort of a situation, where the company or an individual would be going against the government for not have any sort of a provision to withdraw from the contract. [8]

As mentioned above, about the sections, which are being involved in the contracts of the people, should be as per the requirements of the people. If the people are not be satisfied with any sort of the laws or the principles, they should make sure that, all the laws and other matters related to the same is effective enough for the people. Section 34 of the Contract Act, has given the provisions related to withdrawing of the contract, if any of the party feels that it is necessary to be done so. Not only this, The Contract Act, does play an active role in the whole scenario as it leads to the effectiveness in the contract between any two parties, be it an individual and any sort of a company. Similar situation is in the case when any company is involving itself in offering a contract to the general public, in the form of electronic media. The Electronic Act had also given certain principles and other measures, to make sure that the parties related to the contract do not have to bear any sort of a situation, where the company or an individual will have to suffer. [9]

If there is any sort of a dispute between the parties, the relevant acts should be referred. Not only this, if the matter is not being resolved in the scenario, the concerned parties would make sure that they take the whole case to the court in order to have a verdict on it. This dispute might be for the company or any individual and if there has not been a situation regarding the same, the court of law can use the same case for the future references, once the judgment has been passed in the same process. Therefore, it should be said that the companies and other individuals, would make sure that the provisions in their respective act has been stated and proper action can be taken when there is a need to do the same.

Conclusion

The electronic contract can still be improvised in the best possible manner, as there are certain discrepancies in the whole scenario. These scenarios can be avoided by the people concerned with the electronic contracts, by making sure that all people across the country are actually following the principles as stated in the electronic act of the country. For this reason, it can be said that the people should review the whole scenario in order to have a conviction with all these things for the betterment of the contract and how the whole matter will be released in the best possible manner. Other than that, all the companies would require to read the rules and regulations to be executed in the best way possible as these contracts form the most important aspect for any contract. And as the same is an online electronic contract, measures are to be taken as per the laws and the rules regarding the same. Same scenario had happened, when Britannia, an Indian company had refused to oblige a contract as mentioned in the TV commercial.[10]

References 

Electronics Transactions Act 1999 . 2016. Electronics Transactions Act 1999 . [Online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/eta1999256/. [Accessed 22 September 2016].

Electronic Transactions Act 1999 . 2016. Electronic Transactions Act 1999 .[Online]  Available at:https://www.legislation.gov.au/Details/C2011C00445. [Accessed 22 September 2016].

Michael Gisler. 2010. Legal Aspects of Electronic Contracts. [Online] Available at: https://ceur-ws.org/Vol-30/paper7.pdf. [Accessed 21 September 2016].

E Contracts and Issues Involved | Simran Morakhia – Academia.edu. 2016. E Contracts and Issues Involved | Simran Morakhia – Academia.edu. [ONLINE] Available at:https://www.academia.edu/8719077/E_Contracts_and_Issues_Involved. [Accessed 22 September 2016].

Murdoch University. 2010. The Requirements of Writing for Electronic Land Contracts. [Online]  Available at: https://eprints.qut.edu.au/4169/1/4169.pdf. [Accessed 21 September 2016].

A Comparison of the Legal Use of Electronic Signatures. 2016. A Comparison of the Legal Use of Electronic Signatures. [Online]  Available at: https://www.admdlaw.com/a-comparison-of-the-legal-use-of-electronic-signatures/#.V-K3KT5941I. [Accessed 22 September 2016].

Kidd_Full. 2016. Kidd_Full. [Online]  Available at: https://cyber.harvard.edu/ilaw/Contract/Kidd1.html. [Accessed 22 September 2016].

Key Differences. 2016. Difference Between Agreement and Contract (with Comparison Chart) – Key Differences. [Online]  Available at: https://keydifferences.com/difference-between-agreement-and-contract.html. [Accessed 22 September 2016].

SkilledUp. 2016. Comparing Two E-signature Apps: DocuSign and Adobe EchoSign | SkilledUp. [Online] Available at: https://www.skilledup.com/insights/comparing-e-signature-apps-docusign-adobe-echosign. [Accessed 22 September 2016].

Formation of Electronic Contracts under traditional Common Law … | Self-Publishing at GRIN . 2016.Formation of Electronic Contracts under traditional Common Law … | Self-Publishing at GRIN . [Online] Available at: https://www.grin.com/en/e-book/176367/formation-of-electronic-contracts-under-traditional-common-law-principles. [Accessed 22 September 2016].

Nolo.com. 2016. Electronic Signatures and Online Contracts | Nolo.com. [Online]  Available at:https://www.nolo.com/legal-encyclopedia/electronic-signatures-online-contracts-29495.html. [Accessed 22 September 2016].