The legal consequences of internet contracts
Johnson, J. M. C.
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Prior to the enactment of the Electronic Communications and Transactions Act in July 2002, the position in South African law regarding contracts concluded via electronic means was very uncertain. In the absence of applicable legislative guidance, South Africa relied almost exclusively on the flexibility of its Roman Dutch Common Law principles to accommodate the new challenges created by technological advances. While the Common Law succeeded commendably in being able to address the majority of issues raised by the new technology, it became increasingly clear that some of the questions fell beyond the scope of principles designed long before the idea of a computer was ever contemplated. In July 2002, the Electronic Communications and Transactions Act came into operation. The thesis begins by examining the Common Law requirements for the conclusion of a legally valid and binding contract and investigates the provisions of the Act in order to shed light on the requirements of “writing” and “signature” in relation to online agreements. Questions regarding the contractual capacity of parties in relation to electronically concluded contracts are investigated with specific reference to the position in the event of a minor or other person with limited capacity entering into an electronic agreement. The requirement of consensus enjoys detailed attention. The different types of online agreements, including click-wrap and browse-wrap agreements are examined to ascertain the circumstances under which effective acceptance of an offer will have occurred. The position regarding the acceptance of unread terms is also considered as well as the validity of agreeing to terms referred to by means of a hyperlink, but not displayed. The various theories relating to when and where a contract is concluded are also examined with a view to determining the correct theory applicable to electronic contracts. Once the requirements for a valid and binding electronic contract have been determined, the consequences thereof are discussed. The rights and duties afforded by and placed upon parties in 161 accordance with the Act are investigated, with particular reference to the rights of consumers in commercial transactions. The enforcement of rights flowing from agreements concluded via electronic means is examined and some of the potential pitfalls facing litigants, ranging from the viability of litigation to high legal costs, are discussed. In particular, the problem of conflicting legal systems in relation to international agreements is addressed and the methods by which the appropriate system can be identified, are investigated. The question of attribution is examined in addition to the various presumptions applicable in terms of international law as well as the Act, so as to determine upon whom the responsibility for electronically performed acts should be visited. The limitations of the Electronic Communications and Transactions Act are discussed and particular attention is paid to certain types of transactions and agreements that are prohibited from being concluded in terms of the Act and its Schedules. In conclusion, a brief overview of the influence of the Internet on other branches of the South African law is included as a reminder of the vast and wide-ranging influence that recent technological advances have had on our society.