Lecture 3. Electronic Contracts

Online Agreements

There are numerous categories of online agreements which include contracts for sale of tangible goods, the supply of digitised products and the supply of services/facilities. The principles of contract law apply to online agreements and to be valid, they must comply with the essentalia of a contract as outlined above.

Online contracts may be concluded in various ways. These ways are categorised by the manner in which the purchaser is presented with, and assents to, the terms and conditions of the sale. So, we speak of shrink wrap, click-wrap and browse-wrap contracts. These categories refer to the way in which the contracts are concluded and not the content thereof.

Shrink wrap contracts are those where the terms and conditions are printed on paper and placed within the shrink-wrap packaging of the goods sold (for example a CD containing a software package). The purchaser signals his assent to the terms and conditions by opening the package. Browse wrap contracts bind the user of a website to a contract created by the user’s mere browsing of the website. With regard to click-wrap contracts, the purchaser or user of a website is required to indicate their assent to the contract by clicking on an icon.

Whilst each of these types of concluding a contract are valid and can create binding contracts, some contracts may be voidable if the buyer’s attention not drawn to terms and conditions. The seller or provider is required to take reasonable measures to bring the content thereof to the attention of the consumer and to highlight unusual or unexpected terms. The consumer must also be given an opportunity to accept or decline the proffered terms and conditions (Durban’s Water Wonderland (Pty) Ltd v Botha and Another 1999 1 SA 982 A).

When it comes to enforcement of online contracts, a traditional contract law approach is taken and a party seeking recourse has to consider the same factors as considered by a person suing on a contract concluded in the bricks and mortar world. Applicable consumer protection provisions are discussed in the next lecture.