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Lecture 3. Electronic Contracts

Automated Agreements

Automated transactions are defined by s1 ECTA as electronic transactions ‘conducted or performed, in whole or in part, by means of data messages in which the conduct or data messages of one or both parties are not reviewed by a natural person in the ordinary course of such natural person’s business or employment’. The principles of contract law, as briefly outlined above apply to these contracts. However, due to their unique nature, protection for the parties needs to be expressly provided for where an error has occurred.

Accordingly, s 20 ECTA provides that an agreement will not be formed where a natural person (X) interacts directly with the electronic agent of another person (Y) and has made a material error during the creation of a data message and—

(i) the electronic agent did not provide that person (X) with an opportunity to prevent or correct the error;

(ii) that person (X) notifies the other person (Y) of the error as soon as practicable after that person (X) has learned of it;

(iii) that person (X) takes reasonable steps, including steps that conform to the other person’s (Y) instructions to return any performance received, or, if instructed to do so, to destroy that performance; and

(iv) that person (X) has not used or received any material benefit or value from any performance received from the other person (Y).