The document discusses electronic contracts (e-contracts), which are legally binding agreements made online, such as in online shopping. It outlines the applicability of contract law to e-contracts, highlights consumer rights when dealing with Australian and overseas traders, and provides guidance on resolving disputes and ensuring a secure online purchasing experience. Additionally, it explains different methods of agreeing to terms, such as click-wrap and browse-wrap agreements, alongside best practices for business owners to enhance legal enforceability.

1. Online Contracting
Cyber Law
Bradley W. Deacon
Twitter: @bradleywdeacon

2. Contracting Online

3. What Is An E-Contract
A legally binding contract (electronic contract) made by buying goods or
services through the internet between an electronic agent and the parties who
have no personal contact or pre-existing business relationship. Some examples
of E contracts are:
online grocery shopping
online shopping (eBay), and
online auctions.

4. Does the general law of contract apply to E
contracts?
Yes, the standard legal principles of contract law apply to internet transactions
such as online shopping and banking.

5. What should I think
about before making
an E contract?
Resolving disputes when purchasing goods over the internet
can be complex depending on where the trader is located.
Australian traders are subject to specific laws that give the
consumer rights of protection.
However, if the trader is located overseas, different laws may
apply to the transaction and you may not have the same
level of consumer protection.
It is important that you always carefully examine the internet
provider's company policy on returns, refunds and dispute
resolution.
When buying goods online ensure that the trader has a
physical address so you can contact them later if a dispute
arises.

6. How do I sign an E contract?
You usually sign an E contract by clicking on the "I agree" or "I accept" button.
You should always read any terms of the contract carefully, including the fine
print before clicking on the "I agree" or "I accept" button.
Always ensure that you print out a copy of your agreement (contract).

7. What can go wrong with my E-contract?
ordering the wrong product
receiving the wrong item
difficulty in returning the product
security issues
privacy issues
the goods are not delivered
the goods delivered do not match the
online description
the goods are not delivered on time
the seller failed to disclose all relevant
information about the product or terms
of sale
the goods are damaged in transit, or
scamming.
Although online shopping has many advantages, there are common
problems, which can occur. These include:

8. What is a scam?
Scammers pretend to sell a product (often very cheaply) so they can
steal your credit card or bank account details.
Similarly, they may take your money but send you a faulty or
worthless product instead or even nothing at all.
For a list of identified scams in Australia and tips for protecting
yourself from scams refer to the ACCC website.

9. Goods bought online or overseas?
Yes, you have the same basic rights online as you do offline when
you deal with traders operating in Australia.
However Australian Consumer Law operating from 1 January 2011
may not apply to a seller based in another country. Even if the law
does apply, the distance might make resolving any problems difficult.

10. Goods bought at on online auction?
There are many different kinds of online auctions and generally a
consumer's rights are limited.
Consumers who buy goods at a private auction where an auction
house sells for a vendor are not likely to have the usual consumer
rights.
This includes for online auctions. As the auction house is not part of
the contract between the buyer or seller they are not obliged to
provide a solution (remedy) if goods are not fit for their intended
purpose.

11. What are the steps I take to resolve my E
contract problem?
Always try to resolve your E contract problem directly with the person or
company who you either sold to or purchased the goods from.
For example, Joe bought an item from Mary via eBay.
Joe wants a refund, as the item does not match the description given in the
eBay advertisement posted by Mary.
In this case Joe should firstly try to negotiate directly with Mary. Sometimes a
problem can be solved with a simple conversation between the seller/buyer.
You should keep a diary and any records of any conversations you have with
the person you either bought from or sold to.

12. If you can't resolve the problem by dealing directly with the
seller/purchaser contact the online shopping site (eg eBay) you used
for the transaction and check what (if any) after sales service they
offer to assist you with your problem.

13. What if I don’t know the name or contact
details of the person I bought/sold with??
You may not know the name or contact details of the person/people
you bought or sold from.
Most internet service providers have a process to assist online
consumers with contractual disputes.
You should go to the internet service provider's home page to see
whether they have a "help centre" or "online help" service, for
example, eBay Australia provides an online process through which
the buyer and seller can communicate with each other to resolve
disputes.

14. Does it make a difference what online
payment system I use?
Yes, some eligibility for buyer protection services is determined by the
payment method you use and also the country site where the item
was purchased.
If you paid by credit card and a problem arises you may be able to
contact your bank and ask them to reverse the transaction.
The safest way to avoid problems with online buying is to use a
secure online payment system.

15. What court do I enforce my contract in?
Often the buyer and seller live in different states or even different countries.
It can be difficult with internet contracts to work out where the contract was
made.
As the law that applies to the agreement and the place to start legal action
depends on where the contract was made, it is sometimes the case that
buyers or sellers cannot force the other person to meet their obligations under
the contract made on the internet.
You should get legal advice.

16. What if I bought my good from an overseas
trader?
If you bought your goods from an overseas trader it may be harder for
you to enforce your rights. It may even be difficult to work out where
and in which country you should make your claim. If this applies to
you get legal advice.
For more information about resolving problems with online purchases
from a trader operating overseas refer to the ACCC webpage on
shopping online.

17. Enforceability of online contracts
in Australia

18. Click Wrap & Browse Wrap?
Two common methods of accepting terms and conditions of an
agreement online are the click-wrap agreement and the browse-wrap
agreement.
A click-wrap agreement is an electronic agreement where the terms
and conditions of the agreement are located on the same page as the
“I agree” button. Consumers are usually required to scroll through all
the terms and conditions and then take positive action by clicking “I
Agree” before being able to proceed. This form of agreement is
highly likely to be enforceable as a contract.

19. Click Wrap?
However even in a click-wrap agreement, careful thought needs to be
given to a number of issues such as:
– when is the contract formed? Is the merchant making an offer online
that the customer accepts (that sees the formation of the contract at
that point) or is the customer making an offer which may then be
accepted or rejected by the merchant.
The Terms & Conditions will be need to be tailored accordingly.

20. What if I bought my good from an overseas
trader?
if the contract is formed at the time of clicking “I Agree” other Terms &
Conditions cannot be added later.
– do the Terms & Conditions contain clear rights of the merchant not
to supply in certain circumstances?
– do the Terms & Conditions contain clear return and refund terms
that are compliant with the law in Australia?

21. Click Wrap continued
if the contract is formed at the time of clicking “I Agree” other Terms &
Conditions cannot be added later.
– do the Terms & Conditions contain clear rights of the merchant not
to supply in certain circumstances?
– do the Terms & Conditions contain clear return and refund terms
that are compliant with the law in Australia?

22. Browse Wrap
A browse-wrap agreement is where the terms and conditions are not
on the same page as the “I agree button,” and can be accessed by a
hyperlink on the same page.
The consumer is normally not required to access the hyperlink and
view the terms and conditions before being allowed to proceed with
the contract. This form of agreement is less likely to be enforceable
as a contract.

23. Browse Wrap continued
As outlined earlier the same rules of paper contracts also apply to
electronic contracts. It is therefore important to consider two landmark
cases in the law of contracts.

24. Landmark cases
In L’Estrange v Graucob [1934] KB 394 the court decided that, in the absence
of vitiating factors such as fraud and misrepresentation, a signature is taken to
fully bind the consumer to all terms and conditions of the contract.
It is still unclear in Australia as to whether modern technological advances,
such as digital signatures, count as a signature for the purposes of the rule in
L’Estrange as stated by Elizabeth Macdonald, “Incorporation of Standard Terms in
Website Contracting – ‘Clicking I Agree’” (2011) Journal of Contract Law, 198, 199-210.
Therefore, business owners should construct their website in a way that
provides reasonable notice prior to the formation of the contract, satisfying the
rule in Thornton v Shoe Lane Parking [1971] 2 QB 163

25. Business Owners
Business owners should therefore ensure that all steps are taken to
ensure the arrangement of the terms and conditions and the “I agree”
button express an intention for the terms and conditions to be wholly
incorporated into the Contract formed with the customer.

26. Business Owner Best Practice
The customer is required to scroll to the end of the terms and conditions (in
a scroll box for example) before being allowed to proceed, establishing
reasonable notice of the contract’s terms and conditions.
The terms and conditions are displayed on the same page as the “I agree”
button, but the “I agree” is located at the base of the terms and
conditions, once more establishing reasonable notice of the contract’s
terms and conditions.

27. Business Owner Best Practice Continued
• Any unreasonable terms and conditions should be bolded or highlighted
to draw added attention. J Spuring v Bradshaw [1956] 1 WLR 461; The “red-
hand rule”.
• An “I have read the terms and conditions” tick box should be assented
to (and left blank by default, requiring an additional positive step by the
customer) before being allowed to click the “I agree” button. This is to
provide a visible mark to the contract see In re Cunningham (1860) 164 ER
1491 and
• emphasize the user’s agreeability to the contract see Peekay v Intermark
Ltd v Australia and New Zealand Banking Group Ltd [2006] 2 Lloyd’s Rep 511;
Contractual Estoppel

28. Browse wrap caution
A browse-wrap agreement will place the vendor in a weaker legal
position because it does not provide the same degree of reasonable
notice to the user, and are not recommended for business owners.
Business owners will also need to take into consideration the
application of the Australian Consumer Law (ACL) on their online
standard form contracts.
Particular attention should be given as to whether any of the
contract’s terms may be unfair contract terms.

29. Disclaimer
Please Note: This is not legal advice but it may help
you understand the law.

30. References
Lind, A., Tan, J. (2015) ‘Enforceability of Online Contracts In Australia, accessed
at http://www.corneyandlind.com.au/resource-centre/commercial/enforceability-of-
online-contracts-in-australia/ on 1 November 2015.
WA Legal Aid (2015), ‘E contracts and online buying’ accessed at
http://www.legalaid.wa.gov.au/InformationAboutTheLaw/WorkMoney/Buyinggoods
services/Pages/EContractsOnlineBuying.aspx on 1 November 2015.