Use of Contracts Transactions in E-commerce - Assignment Example

E-COMMERCE CONTRACT Internet shopping has been increasing in popularity over the past 5 years. Many people around the world are finding easy and convenient to shop for various products online. As a consequence of the increasing online shopping, many large, media and small enterprises are setting up their businesses ready for the available online markets. As the world moves online and more people start using e-commerce as their most preferred shopping alternative, there is a need to have established legislations that will encourage more people to get involved in e-commerce and protect them from fraudsters. Some of the laws that are used in general market situations, face to face, should also be applicable to e-commerce. Several conferences have been held during the past decade to brainstorm on possible challenges and solution presented by e-commerce. Many jurisdictions have continued to address the emerging challenges through various methods. Some jurisdictions have already formulated formidable legislations, while others are still ragging behind. New legislations that are being formulated are often related or attached to common laws that guide local and international business transactions. Several global organizations have also responded to the call to have checks on e-commerce. Organizations such as International Chamber of Commerce (ICC) and United Nations Commission on International Trade Law (UNCITRAL) also have imparted the online business transactions through provision of contractual terms and modelling legal provisions that can be adopted by all countries while drafting their own laws, also they can be used by various players during formulation of contract terms (Electronic privacy information centre and junkbuster, 2002). Internet Contracts and Consent Transactions conducted over the internet should only happen there is agreement between the seller and the buyer; this is either through an implied or expressed contractual agreement. Traders should always remember that the law still applies even when their transactions are done exclusively online. Legal Capacity Traditionally, negotiated contracts are made by persons that know each other well to understand the gender, mental capacity and age group of the other party. However, this is not the case with online transactions. Unlike the traditional transactions where a seller can evaluate the age and gender of the buyer without necessarily asking, it is easy to be deceived by online buyers. Underage individuals can easily buy items that are only limited to adults by providing wrong information during sign up. Transgender items can also be accessed by the unintended users, if they provide false information about their genders. An incarcerated individual can also order for dangerous items if they are able to access the internet. A few countries, like Indonesia, pardon kids if they breach contracts. At the same time, personal representing corporate and governments may need to be authorised by their companies, but while transacting online, some information and authenticity of such individuals would be impossible to verify. It is important to enact watertight regulations that will guard contracts and identities. This may require a longer process during registration, but once the real identity of the person transacting or representing an entity is established, it will be easy to regulate other users masquerading as the account users or representatives. Using specific information and security question may be helpful in determination of the identity of the users; however, with online usage still rising at an alarming rate, it is important to have a more authentic method. Online signatures might be the ideal solution (Mills, 2005). Validating a transaction conducted online Different legislations have already been enacted to guide online transactions, and still more controls are being formulated to ensure all the transactions made through different online platforms, not only follow the contract requirements attached by the seller but also are legal. The fact that online transactions are sensitive and should be guided does not mean that they do follow the basic requirements of the contract law, i.e. offer and acceptance, consideration and capacity of an individual to enter into a contract. Another huddle that has been facing online transactions is lack manageable tax regulations for both local and international transactions. E-commerce unlike the face to face transactions are not easy to regulate, and governments around the world are still pondering over the issues, although they are at different levels. Trade agreements and other regional protocols have not been adjusted to serve the online transactions; this may be partly due to the versatility of the platforms being used, and partly due to lack of regulation of some transactions taking place. Service industry is one of the beneficiaries of the online transactions, and millions of jobs are being sent abroad everyday. At same rate, millions of dollars are being paid to online employees in Europe, America, Africa and Asia. However, most of the transactions are not regulated because many platforms that host the transactions are deemed to be too small or owned by persons under different jurisdictions. Regulating the transactions has not been easy. It is worth noting that online transactions are growing at a rate that is beyond many governments around the world. To cover the transactions effectively, it would be apt to have every country that is covered under different protocols engaged; however, past experiences have proved that this may not be easy. This may be the reason that has motivated many governments to encourage centralizations of online transactions, by creating centralized resource centres. It may be a matter of time before governments of the world are able to tract and manage all domain names, portals, stores, et cetera that take part in online transactions. It’s important to be careful when drafting an E-commerce contract and consider the most sensitive issues. An e-commerce contract should not expose you to future liability that would otherwise be avoided it should also give your website visitors the right picture to avoid future controversies. Stages of Contacts There are three stages in contract formation that are legally recognized; however, in some jurisdictions the order and number of stages are different. The most applicable order of the stages is as follows; a) Invitation and Offer Invitation is the intention of the seller to sell the product e.g. advertisement /display of a service or an item on the site .while an offer is the intention or show of interest of the product or services by the buyer. At this point the seller is still free to accept or reject the deal for whatever reasons. b) Acceptance For acceptance to be considered formal it must be communicated. Therefore when both the seller and the buyer agree to the terms they must communicate. c) Consideration The contract should be in way that it benefits both the buyer and the seller. Therefore at this point consideration should be made on various factors (Ramberg, 1999). Forms of e-commerce contracts There are several forms that e-commerce contracts can take. The most common forms are; shrink-wrap, click-through and browse-wrap agreements. Different forms of contract go through varying steps in order to be validated. The customers are required to go through different validation steps before completing their transactions. The most commonly used version of electronic contract is the click-through method and many online shoppers are familiar with it. Through the click-through method, a client is requested to read through a set of rules of engagement before committing to the contract agreement. To validate the contract a client is either required to click a button or check a box before navigating from that page. Shrink-wrap is mostly used to set rules on the use of software. The customer must agree to the licence terms when opening the software package that is by opening the shrink- wrap the user agrees to the software terms enclosed. In browse –wrap the contacts terms are displayed on the websites for the customer to the customer to see before they agree to them. Legal Obligations With online transactions going beyond the legal boundaries ambiguity some times arise. Certain events pass as public policy in some countries, but are legal obligations in other jurisdictions. For instance gambling, which may include sweepstake, raffles and lotteries are legal in some countries and illegal in others. In jurisdictions such as Macau, Monaco and some US states such as e.g. Nevada, gambling is legal. Persons living in jurisdictions that do not allow gambling can easily enter them by providing false information during registrations. In some Islam countries, watching and listening to certain content may be deemed illegal but through the facilitation of various online platforms, curious individuals living in these jurisdictions can access such information. Schools and college students are sometimes blocked from accessing some contents, but through various unauthentic web sources, they can readily access the contents. This means that online transactions may facilitate breaking of law in some jurisdictions (Mark, 1998). Important Elements for creating an e-commerce Contract The process of formulating enforceable contracts for online businesses, traders should take care of both their business needs and legislative requirements. This is to ensure that their do not only benefit from their merchandise, but they also entire that they follow the right procedures and do not engage in unlawful transactions. When traders are in the process of formulating contract details that they need to enforce, there are several things that they should consider (Jacques 2000). The first thing is that the trader should inform the potential buyers that the transactions about to take place are expressly guided by contract law. The next thing is requesting/ensuring that the shopper reads through the terms before committing to follow them. It is also important to have unambiguous statement on what the client commits to when s/he agrees to the terms. E-commerce contracts should meet the same requirements as the traditional contracts, e.g. both the buyer and the seller must intend to be bound by the agreement. Evidence Requirement in Online Transactions When a client purchases a product through an online platform, it is important that s/he gets adequate documentation either in written or electronic form showing all details and terms of the purchase. This information has prove to be important in case there are controversies around the product to transactions that lead to change of ownerships, but without proper documents and records, it is very like to lose products even after purchasing them through legally abiding traders (Jane, 2000). A digital signature is another security measure that can be used to ensure that the transactions that take place are legit. To use the signatures, the users must have private key that is only known to them, and another public key that is readily available to every user of the internet. Digital signature services are supported and supplied by several authorities and are also recognized as online identification certificates. Conclusion Even though many businesses have already started using online platforms to conduct their businesses, it is important to note that every trader and transaction is still bound by local and international laws governing internet transactions and relevant codes of practice. When a transaction is initiated online, both the seller and buyer should know that they are bound by rules, and any attempt to go again the agreements therein can culminate into a law suite. As the online transactions get even more complex it is important to ensure that one understand the legal consequences of entering into certain contracts; this can be done by seeking legal advice from a lawyer. Many countries especially the European Union and the United States have had some successes and failures in their attempts to manage e-commerce and accompanying legislations. The EU has tried to apply umbrella regulations in all contracts formulated in the member countries. However, new challenges have been emerging in line with the evolving online market, thus it is important for all jurisdictions to keep their regulations in line with the most immediate technologies being used for online transactions. References Carl Shipiro and Harl Varian, 2002, Information Rule: A Strategy Guide to the Network Economy, Electronic Commerce, 124. Electronic privacy information centre and junkbuster, 2002, Pretty Poor Privacy: An Assessment of P3P and Internet Privacy Jacques Pelkmans, 2000, The GSM Standard: Explain a Success Story, Working paper No. 132, Centre for European Policy Study Jane, K. Winn, 2000, Making XML Pay: Revising Existing Electronic Payments Methods to Accommodate Innovation, 53 S.M.UL, 1477. Mark A. Lemley and David McGowan, 1998, legal Imprecation of Network Economic Effects, 86, Carl, L. 479. Mills, Karen, 2005, “Effective Formation of Contracts by Electronic Means,” Do We Need a Uniform Regulatory Regime? Ramberg, Supra, 1999, Uniform Transactions Act, National Conference of Commissioners on Uniform Sates Laws, 106-126. Read More