E-Contracts

 

The legal requirements of a valid and enforceable e-contracts within the ambit of the Electronic Communication and Infrastructure Act has become more prevalent in the fast pace changing techno world that we live in.

Due to the nature of the contract concluded online, there exists many uncertainties regarding this form of electronic data interchange.

Types of Transactions

There Are Mainly:

1.Negotiations via email or sms.

This communication set out the terms and conditions and can constitute an offer of acceptance as was widely dealt with in Jafta vs Ezemvelo KZN Wildlife and Sihlali, Mafika Vs South African Broadcasting Corporation Ltd.

2.Contracting via the internet.

Party controls a website that advertises goods and services. The online client accesses website completes an electronic form and purchases the goods.

3.Trade under an EDI

The computer-to-computer transmission of data in a standardised forum.

4.Contract via a handheld device

or a wireless application service provider to download applications, ringtones, etc.

Validity of These Contracts

In common law, a valid and enforceable agreement must comply with the elements of consensus, contractual capacity legality physical possibility of performance and compliance with formalities.

South African law is based on freedom of contracts;

  1. Parties are free to negotiate and construct the contract according to their needs;
  2. No formalities under required by law or agreed by parties;
  3. Section 11 & 22 of ECT promotes this principle.

The requirements of a valid offer and acceptance must also be complied with. The offer must set out precisely the essential elements of the contract to ensure that an offeree can unequivocally accept the offer.

There are two theories to determine whether or not a valid offer and acceptance took place:

  1. Information theory (direct communication);
  2. Reception Theory (indirect – a including data messages, sms, emails)

It is the South African position that, unless clearly indicates otherwise, ADVERTISEMENT on websites will only be regarded as an invitation to business and NOT an offer.

When electronic signature is required and the parties have not agreed on the type of an electronic signature to be used, that requirement is met off:

  1. A method is used to identify the person and to indicate the person’s approval of the information communicated;
  2. Having regard to all the relevant circumstances at the time the method was used, the method was reliable as was appropriate for the purposes of which the information was communicated;

When electronic signature is required by the parties to an electronic transaction, an expression of intent is not without legal force and effect merely on the ground that:

  1. It is in the form of a data message;
  2. It is not evident by an electronic signature.

Time and Place Of Conclusion

Importance of place: Contract has to compile with the law of the place it was concluded to determine the jurisdiction of the court.

Importance of time:  offerer can retract the offer before a valid acceptance.

Hugo vs Wessels: the first principle depends whether one of the grounds of jurisdiction exists and the second depends upon whether the court can give an effective judgment.