Legality of e-contracts

What is an E- Contract?

A legally binding contract (electronic contract) made by buying goods or services through the Internet between an electronic agent and the parties who have no personal contact or pre-existing business relationship. Some examples of E contracts are:

  • online grocery shopping
  • online shopping (eBay)
  • online auctions.

Does the general law of contract apply to e- contracts?

Yes, the standard legal principles of contract law apply to Internet transactions such as online shopping and banking.

What should I think about before making an e - contract?

Resolving disputes when purchasing goods over the Internet can be complex depending on where the trader is located. Australian traders are subject to specific laws that give the consumer rights of protection. However, if the trader is located overseas, different laws may apply to the transaction and you may not have the same level of consumer protection. Is important that you always carefully examine the internet provider's company policy on returns, refunds and dispute resolution. When buying goods online ensure that the trader has a physical address so you can contact them later if a dispute arises.

How do I sign an e-contract?

You usually sign an E contract by clicking on the "I agree" or "I accept" button. You should always read any terms of the contract carefully, including the fine print before clicking on the "I agree" or "I accept" button. Always ensure that you print out a copy of your agreement (contract).

What can go wrong with my e- contract?

Although online shopping has many advantages, there are common problems, which can occur e.g.:

  • ordering the wrong product
  • receiving the wrong item
  • difficulty in returning the product
  • security issues
  • privacy issues
  • the goods are not delivered
  • the goods delivered do not match the online description
  • the goods are not delivered on time
  • the seller failed to disclose all relevant information about the product or terms of sale
  • the goods are damaged in transit
  • scamming.

Do I have any legal protection if I bought goods on the Internet, e.g. buying from eBay or online auctions?

Goods bought online or overseas

Yes, you have the same basic rights online as you do offline when you deal with traders operating in Australia. However WA laws may not apply to a seller based in another state or country. Even if the laws do apply, the distance might make resolving any problems difficult. If unsure about which laws apply get legal advice.

Every time you buy goods or services you are entering into a contract with the seller. This means that consumers are protected by a number of statutory conditions and warranties with every purchase of good and services including:

  • goods must be of merchantable quality- they must meet a level of quality that matches their price and description and be free from defects
  • goods must be fit for their intended purpose
  • goods must match the description given to the consumer, or the sample shown.

Goods bought at an online auction

There are many different kinds of online auctions and generally consumer's rights are limited. Consumers who buy goods at a private auction where an auction house (including online auctions) sells on behalf of a vendor are not covered by all statutory rights. This means that the auction house is not part of the contract between the buyer or seller so they are not obliged to provide a solution (remedy) if goods are not fit for their intended purpose. If this applies to you get legal advice.

What are the steps I should take to resolve my e- contract problem?

Always try to resolve your E contract problem directly with the person or company who you either sold to or purchased the goods from e.g. Joe bought an item from Mary via eBay. Joe wants a refund, as the item does not match the description given in the eBay advertisement posted by Mary. In this case Joe should firstly try to negotiate directly with Mary. Sometimes a problem can be solved with a simple conversation between the seller/buyer. You should keep a diary and any records of any conversations you have with the person you either bought from or sold to.

If you can't resolve the problem by dealing directly with the seller/purchaser contact the online shopping site (e.g. eBay) you used for the transaction and check what (if any) after sales service they offer to assist you with your problem.

If the problem cannot be resolved contact:

If all negotiations and attempts to reach an agreement fail then you could apply to the court to decide the matter.

What if I don't know the name or contact details of the person I bought/sold with?

You may not know the name or contact details of the person/people you bought or sold from. Most Internet service providers have a process to assist online consumers with contractual disputes. You should go to the Internet service provider's home page to see whether they have a "help centre" or "online help" service e.g. eBay Australia provides an online process through which the buyer and seller can communicate with each other to resolve disputes.

Does it make a difference what online payment system I used?

Yes, some eligibility for buyer protection services is determined by the payment method you use and also the country site where the item was purchased. If you paid by credit card and a problem arises you may be able to contact your bank and ask them to reverse the transaction. The safest way to avoid problems with online buying is to use a secure online payment system.

What court do I enforce my contract in?

Often the buyer and seller live in different states or even different countries. It can be difficult with internet contracts to work out where the contract was made. As the law that applies to the agreement and the place to start legal action depends on where the contract was made, it is sometimes the case that buyers or sellers cannot force the other person to meet their obligations under the contract made on the internet. You should get legal advice.

What if I bought my goods from an overseas trader?

If you bought your goods from an overseas trader it may be harder for you to enforce your rights. It may even be difficult to work out where and in which country you should make your claim. If this applies to you get legal advice.

Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
  • Does not constitute legal advice by Net Lawman;
  • Does not create a contractual relationship;
  • Does not form part of any other advice, whether paid or free.
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