In this millennial period, there is a huge inclination towards the electronic techniques in relation to the trading approaches and matters related to the payment. This can be noticed in various scenarios such as virtual errands or automated business, automatedfinancial transactions, or online endorsement by categorization of merchandises on auction through social media platform which is determined to be the means of communication. Furthermore, acknowledging the vital components or the nature of the customary contract, electronic contract is equally lawful and enforceable by law. The aim of this essay is to determine all the important elements related to the electronic contracts by acknowledging the Electronic Transaction Act of Victoria 2000 and Australian contract law and will also focus on the legal principles applicable on the offer and acceptance through E-mail.
A voluntary agreement whether it is oral or written which is enforceable by law amid the two or additional parties to ensue with specified act or deny from doing so with the purpose to form legitimate relations and simply not just a common deal with a existence of assurance imitative from the agreement to provide something of price as consideration is known as contract.
Contract is considered to be a mutual lawful matter to be commenced whether the motive is secluded or commercial. Grounded on the notion of free will of contract, parties are given the freedom to form contract according to their will which is grounded on the inclination to initiate the responsibilities accountable in the contract. Authentication of agreement into a contract is an essential element amid the parties who agrees to the terms and conditions of the agreement with the purpose to be lawfully destined with the promise of consideration (something in value).
The initial components of a contract comprises of intent to form legitimaterelationship, offer and acceptance, and consideration. While the subordinate aspects deals with the capacity of contract, free consent, and legality of object.
Intention to create legal relation is when the parties who are entering into a contract must be envisioned to make their agreement legally enforceable by law. Offer is determined to be a precise proposal that once accepted outcomes in the formation of a contract. Acceptance is considered to be an approval from the other party to the offer proposed. Acceptance of an offer must fulfill some conditions and the condition are:
Consideration is acknowledged as a common promise or promises made by the parties to be providing to one another with the occurrence of something of value as a contract. A contract deprived of consideration would outcomes in the deed formation.
Capacity of contract is considered to be the capability needed to form a contract, a contact may be limited if one of the party is under incapacitiesas all the entities are not entitled to enter into the contract. Free consent is the vital element for entering into the contract amid the two parties. Free consent is considered as a mutual consent amid the parties where the terms and condition of the contract are equally understood without the implementation of misrepresentation, mistake, fraud, undue influence. The legality of object is the sole determination of the contract as an enforceable contract which must be legal and abide by law and should have a legal objective.
The Electronic Transaction Act 1999 (Cth) and Electronic Transaction Act 2000 (Vic) signifies about the scope of electronic contracts made by the parties through Email. The Act also depicts that the electronic contracts are legal and enforceable by law same as compared to the traditional contract. The Act also states that the electronic contract does not lack its validity with the necessities it is likewise same as text and initials generated by the electronic message. The party is allowed to produce the official papers with another party. According to the given scenario, it can be stated that the as per the modern period, the advance method of communication is done through email. This type of communication is acknowledged as “E-postal rule” in an email communiqué that enabled the parties to accept the offer given by the other party just by clicking the send button which ensures the recipient about the retrieval of the mail. Under the common contractual law principle, it is stated that the acceptance of an offer is in function when it is conversed to the offeror. Whereas, in the postal rule, the receiving of the offer will be functional at the time of receivingis posted via email slightly than connected to the offeror. As it is difficult to determine the time of the formation of the electronic contract, there must be a vibrant rule in the contractual deal which should postulate how the approval is to be conversed and when an approval of the proposal will be considered to be in effect.
As per the scenario, Lisa wants to open the coffee shop for which she communicated to Tom, who is a carpenter to make her six tables. For the purpose of wood, Tom contacted Bob who was a timber seller who told that the woods would cost $1800 to which Lisa agreed after giving the instruction that table would be made of hardwood and would be light in color and the Tom’s labour cost and timber was settled at $3000. After sometime, Tom mailed Lisa that the amount of timber has been increased to $3800 and also informed her that the wood would be hardwood but it is not confirm that it would be light in color as it is totally depends on the branch of the wood. After reading the terms and conditions mailed by Tom, Lisa agreed and allowed Tom to proceed in the work and also transferred $500 to the Tom’s account for the payment of wood. The problem occurred when Tom made the tables and gave it to Lisa, Lisa refused to accept the table as they were dark in color and she was unsatisfied with the work and demanded her money back. Tom reminded her that there was a contract made amid them to which Lisa refused to agree by saying that she has not signed anything so there is no contract amid them.
According to the facts mentioned in the brief a contract is formed between the Lisa and Tom as she offered Tom to make six tables for her coffee shop to which Tom accepted. There is an electronic contract formed amid them as all the communication held amid them is through E-mail. According to the scenario, Tom mailed Lisa about the details of the timber wood to which she agreed. It was also mentioned by the Tom that ‘he will make sure that there would be hardwood but he will not guarantee about the color of the wood as there are variations amid the different batches of timber’ so there is no case of misrepresentation, mistake, fraud or undue influence. There was the existence of free consent by Lisa as she was agreed after reading all the terms and conditions mentioned by the Tom in the Email. It can be proved that there was a free consent in the mail as Tom at the end of his mail asked Lisa that if she is alright with the deal. After which, Lisa transferred $500 to Tom’s account. Hence, it can be stated that there was a proper communication between the parties when an offer was given and was dully accepted with free consent.
The Electronic Transaction Act 1999 (Cth) and Electronic Transaction Act 2000 (Vic) states about the section 14 and section 14A which talks about the time of dispatch and time of receipt in electronic communication. The time of dispatch is when the automated communiqué leaves from the information system by the action of the offeror or the sender. Similarly, when the electronic communication is conventional by the recipient if there is defect in the communication such as hang or the message has not left the system of the sender or the offeror. Section 14A states that the time of receipt when the automated communiqué is capable of being recovered by the recipient at a particular address or they have become conscious that the electronic communiqué has been address to them. In this case, both the cases of time of dispatch and time of receipt has been noticed. Postal rule is determined to be a vital concept in offer and acceptance regulations. In the case of Smythe v Thomas, the court apprehended that by enlisting the article for sale on eBay which institutes aproposal to vend the aircraft instead of an incitement to give. This is reasonable because of the detail that the seller and the buyer have settled to admit the terms and condition of a virtual sale facility. Therefore, the contract will occur straight amid the seller and the buyer.
In the second part, as it is stated in the scenario that Lisa is not owning anything to the Tom as in their last trip Lisa owned $800 to Tom. According to the contact law, she is liable to pay Tom his damages caused due to the refusal of the tables done by the Lisa. Tom is competent to claim his damages as he has not been awarded his labour pay. As the Australian contract law states the term ‘breach of contract’ which is determined as a condition where one party breaks the promise made during the formation of contract. This sort of remedy that a party would be entitled to pay the damages according to the sternness of the contract as well as the amount of damages occurred to the other party because of the breach. It is stated that if the damages occurred is minimum, then the remedy for the breach of contract must be comprised of contract rescission or alternation.
Furthermore, if the damages occurred is acute and at large, then the party breaching the contract is ordered to pay the amount to the other party in order to compensate the loss. It is done to reinstate the injured party as they were before entering into the contract. In this case, compensatory damages must be applied in which the breaching party is liable to pay the non- breaching party the amount of loss occurred due to the breach of contract. In the case of Plenty v Dilon, the court held that an award of damages compensates for the actual injury to the plaintiff. Actual damage can comprises of corporeal or psychiatric damage, property damage, or other economic loss. It is obligatory for the plaintiff to prove before the court that the damage was caused due to the tort and comes within the relevant principles of ‘remoteness of damages’.
In conclusion, there is a whole endorsement in regards to legality when functioning a contract electronically. The electronic means do not disturb the legal implementation as long as it has the intention to form legal relations, consciousness of the term and conditions of the agreement and the presence of the consideration. It is noted that if there is delegation ascends from the online transaction the consumer and the corporation can perform the intervention and pursue aid from the upper establishments if it is essentially required while facing the legal conflict. Nevertheless, although electronic contracts are apparently dependable as it has demonstrated certain loopholes like ambiguity in regards to time period when it is formulated as well as the legitimacy of the electronic signature. Consequently, when a contract is made this improbability must be determined and terms and conditions must be evidently specified with complete empathetic to evade undesirable circumstances and probable misfortunes.
Brendan Penton, et al, Understanding Business Law (LexisNexis 3rded, 2003)37.
Daniel Khoury and Yvonne Yamouni, Understanding Business Law (LexisNexis 8thed, 2010) 16.
David Parker and Gerald Box, Business Law for Business Students (Thomson Reuter, 3rd ed, 2013) 63.
Electronic Transaction Act 2000 (Vic) part 1.
Richard Stone, The Modern Law of Contract (Cavendish Publishing, 6th ed, 2005) 49.
Stephen Graw, An Introduction to the Law of Contract (Lawbook Co., 7th ed, 2012) 27.
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