Kirsty Newman 19:36, 2 Sep 2004 (EST)
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The development of e-commerce can disrupt the application of the basic foundation principles of a contract in some, but not all instances. For instance, once an offer has been made it can only be revoked before it has been accepted. In a traditional contract therefore, the time that the offer was accepted is crucial as to whether the offeror can back out of the deal. For instance, A may offer goods by email to B and B replies via email with his acceptance, but then A revokes her offer after B had sent his email of acceptance, but before A had received it. The time at which acceptance is effective is crucial here, but is it when B sent his email of acceptance, when that email enters A’s system, or when A actually reads the email? If it is when the email was sent then B cannot legally take back his offer, but if it is when A receives the email, then A’s revocation of his offer will be valid. This is just one demonstration of how a new environment such as email requires traditional laws to be developed to accommodate for it.
Since cyberspace may effectively be seen as spaceless, space concepts are disrupted in this environment and modern perceptions of space-time relations are challenged. This is because we conceptualise time and space as being linear, that is, having a certain shape and finite quality. Space, like time, seems to be irrelevant or even non-existent in the internet environment. This will challenge contract issues when the jurisdiction that governs the contract needs to be discerned when the contracting parties are from different jurisdictions, in each of which are different laws.
The postal acceptance rule is a judge-made rule that applies when it is clearly within the contemplation of the parties that the post would be the ascribed method of communication (Adams v Lindsell (1818) 1 B&Ald 681; 106 ER 250). The effect of the rule is that communication is ‘effective’ as soon as it is posted, rather than when it is received (Henthorn v Fraser (1982) 2 Ch 27). For example, if A makes an offer to sell his car to B by post, and B sends her acceptance by post, then her acceptance is considered legally effective from the date she sent the letter. The length of time the letter takes to get to A is irrelevant, and this is also the case if the letter never gets received by A.
Since the time that this rule was formulated, its application has been extended to other forms of communication, but they must be non-instantaneous forms of communication. For instance, it has been extended to communications by telegram because the courts found it to be more akin to ordinary mail (Cowan v O’Connor (1888) 20 QBD 640), whereas communications like the telephone are considered instantaneous to which the rule does not apply.
The problem then, is whether this rule applies to email. This is yet to be determined by the Australian courts (Willmot, 2001: 68). This will be determined by whether e-mail is classified as an instantaneous method of communication, or a non-instantaneous one. E-mail is like the post in that once it is sent, the sender has no control over whether it gets to the addressee. However, once sent it can be instantaneous, but this is not always assured (Christensen, 2001).
This is one example of why the new environment of the Internet can pose problems for applying existing contract laws. This process is challenged due to the fundamental difference between the traditional contract law framework which is paper-based, and that which it is being applied to, electronic contracts, which are a paper-less form in a seemingly spaceless environment. However, the general consensus beginning to form is that cyber-space in general is different enough to merit the formation of new and specifically applicable laws (Biegel, 2001).
Adams v Lindsell (1818) 1 B&Ald 681; 106 ER 250.
Biegel, S. (2001) ‘Beyond Our Control? Confronting the Limits of Our Legal System in the Age of Cyperspace’ Ch. 5, MIT Press, Massachusetts – ISBN 0-262-02504-3
Christensen, S. (2001) ‘Formation of Contracts by Email – Is it just the same the post’ [Online]. Available: http://www.austlii.edu.au/au/journals/QUTLJJ/2001/3.html [ Accessed 5 Aug. 2004].
Cowan v O’Connor (1888) 20 QBD 640.
Henthorn v Fraser (1982) 2 Ch 27.
Willmot, L., Christensen, S., Butler, D. (2001) ‘Contract Law’, Oxford University Press: Victoria – ISBN 0 1955 10062.
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Kirsty Newman 18:12, 25 Oct 2004 (EST)
