When you click "I agree" on websites you are entering
into what is commonly known as a "click wrap" agreement.
Click wrap agreements are binding irrespective of whether you have
taken the time to actually read the terms and conditions to which
you have agreed.
When is an email received
In Australia, unless the contrary is expressly agreed, an email
is taken to be 'received' when the email becomes capable of
being retrieved by the addressee at the electronic address
designated by the addressee. Alternatively if no address has been
designated by the addressee, the email is received when it is
capable of being retrieved by the addressee and the addressee has
become aware that the email has been sent to that address.
'Meeting of the minds'
The legal basis of an agreement is a 'meeting of the
minds'. So what if the person you are dealing with is a
computer that just gives you an automated reply to your offer to
buy a product. This is the way that many sites work - you order
online and everything is done via automatic computer interaction.
How can that be a 'meeting of the minds' when you are
dealing with computers and software only?
Thankfully legislation has been enacted confirming that a
contract can be formed by the interaction of an automated message
system and a natural person. Such agreements will not be invalid,
void or unenforceable on the sole ground that no natural person
reviewed or intervened or "agreed" to the contract.
What that means is that once you put something "in the
basket" and insert your credit card or Paypal details and push
"Buy now", the deal is done and you cannot escape the
contract by using the technical argument that there was no contract
because a computer does not have a mind, and hence there can be no
meeting of the minds that is required to create an enforceable
But what if you got it wrong and inserted "70" items
instead of the required "7". Again, the law now states
that if a contract is created via the use of an automated system,
but a natural person has made an input error in the electronic
communication (and the message system does not allow that error to
be corrected), then the person making the error has the right to
withdraw that portion of the electronic communication that was
inputted in error. Of course, if the person has already received
the 70 items and used/sold them, then the change cannot be
affected, but if contact is made quickly then the contract will not
be considered binding to the extent of the error.
Creating a binding agreement if a signature is required. If the
signature of a person is required on a document to create an
agreement, that requirement is taken to have been met in an
electronic communication if;
The person signing is identified
There is an indication about what the person's intentions
The method used was reliable; and
the person receiving the email has consented to an electronic
signature being utilised.
This means that an actual signature or facsimile of the
signature is not required. A signoff block at the bottom of an
email, together with confirmation of intention will be enough to
create a legally binding arrangement.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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