If you have ever made or accepted an offer by any form of
electronic communication (eg e-mail, social media or an instant
messaging service) then the latest developments in the area of
electronic contract formation will affect when that offer and
acceptance is legally enforceable. The Electronic Transactions
(Contract Formation) Amendment Bill
(Bill) has passed its first reading and has been
sent to the Commerce Committee. The Bill, if passed, will clarify
that the communication of acceptance by electronic communication
will be deemed to be accepted at the time of receipt of the
In practice this will mean that when acceptance of an offer is
made electronically, for example responding to an offer by e-mail
stating "I accept the terms of your offer", then this
acceptance will be enforceable when that e-mail is received by the
party making the offer. This development signifies a departure from
the application of the normal postal acceptance rule, which
provides that acceptance is deemed effective when acceptance is
posted to the offeror.
The question remains of what actually constitutes 'receipt of
the acceptance'? Will it take place when the electronic
communication accepting the offer is actually opened by the
offeror, or when it enters the offeror's electronic
communication system? The Electronic Transactions Act 2002
(Act) outlines that where the offeror has
designated an information system (eg an e-mail address) to which to
receive an electronic communication, that electronic communication
will be deemed to be received when it enters that designated
information system. In all other cases, the Act provides that an
electronic communication will be taken to be received when the
e-mail reaches the attention of the offeror. We assume that these
rules will also apply to 'receipt of the acceptance',
however the Commerce Committee will hopefully confirm the exact
position on this.
As a general best practice rule, if the electronic/email system to
which you are communicating the acceptance of an offer crashes, or
an e-mail sent accepting an offer bounces back, you should send a
follow up e-mail to ensure that your acceptance is effectively
relayed to the other party. This may mean resorting to a
different means of delivery.
Submissions are due by 27 June 2013. If you are
interested in making a submission, or require any further
information on the Bill or the submission process, please feel free
to contact below.
This publication is intended as a general overview and
discussion of the subjects dealt with. It is not intended to be,
and should not used as, a substitute for taking legal advice in any
specific situation. DLA Piper Australia will accept no
responsibility for any actions taken or not taken on the basis of
DLA Piper Australia is part of DLA Piper, a global law firm,
operating through various separate and distinct legal entities. For
further information, please refer to www.dlapiper.com
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
We discuss whether certain clauses commonly found in ordinary commercial contracts could be considered to be penalties.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).