One of the many ways the internet has revolutionized human interaction is in the way it has transformed how we buy and sell. The concept of trade has gone beyond having to leave the comfort of one's home or office to being able to sit in the comfort of your home and have goods and products delivered to you. This concept of buying and selling becoming more popularized as a result of the pandemic. The main point here being the ease of purchase. Some of the most popular online marketplaces include Amazon, eBay, Alibaba, AliExpress, Wish, Etsy, Jumia, Konga, PayPorte, Jiji Nigeria.
However, there have been cases where products ordered from these online marketplaces arrive damaged or defective or the products delivered are not what the consumer ordered. In this paper we shall consider what party bears the liability for the defective product delivered, the online marketplace or platform or the vendor who has placed their product for sale on the platform and the regulatory bodies set up to protect the final consumer.
PRODUCT LIABILITY ON ONLINE MARKETPLACES OR PLATFORMS
The California Court of Appeal in Bolger v Amazon1 found that Amazon's online marketplace was an "integral part of the overall producing and marketing enterprise that should bear the cost of injuries resulting from defective products". This decision comes from the reasoning that Amazon has a responsibility to ensure that products listed on its website are safe and meet acceptable standards. This is important as the consumer would recognize the online marketplace as the only reasonable member of the enterprise where an injury needs to be remedied.
However, position has been argued by some quarters as counterintuitive, as these online platforms merely connect buyers with sellers and are not in themselves sellers. Some claim it is unusual to impose such liability on platforms liable for transactions they did not initiate. It has further been argued that no contract exists between the consumer and the online marketplace and the online marketplace is not responsible for any breach of contract between the buyer and the seller.
CONSUMER PROTECTION IN NIGERIA
With the rise of the internet, developing countries such as Nigeria are not left out. Nigeria has positioned itself to be a partaker of the revolutionization of trade that the internet provides. Online marketplaces are thriving in Nigeria. However, there have been cases where products ordered from these platforms arrive damaged or defective or the products delivered are not what the consumer ordered. Where a consumer in such a situation, what remedies are available to them.
For such a transaction of sale of goods to occur between a buyer and seller, they must first enter into a contract. A contract has been defined by the Black's Law Dictionary2 as an agreement between two or more parties which creates obligations that are enforceable or otherwise recognizable at law. With the emergence of the internet and online trade, there exists now, three types of contracts namely formal, oral and now online or electronic contract. The valid elements of a contract being offer, acceptance, consideration and intention to create legal relations must be present for a contract to be valid. Irrespective of the fact that there is no legislation that stricto sensu provides for the enforcement of online or electronic contracts, parties can rely on the provisions of section 84 of the Evidence Act 2011 on the admissibility of electronic evidence to prove validity of contracts entered into electronically. The terms of the contract bind both parties and imposes liability on either party. In an online or electronic contract, the terms are provided usually in the Terms and Conditions provided usually by the online platform.
The Sale of Goods Act3 provides that where goods are delivered to the buyer where he has not previously examined them, he is not deemed to have accepted them unless and until a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract. Therefore, relying on the position of the Sale of Goods Act, the buyer retains the right to return goods delivered to him if upon examination he discovers that such goods delivered do not conform to what was agreed between the parties.
The regulatory body of consumer protection in Nigeria is the Federal Competition and Consumer Protection Commission (FCCPC). It is a body established by the Federal Competition and Consumer Protection Act (FFCPA) of 2018 to ensure fair market prices and prevent the exploitation of consumers. The body serves as Nigeria's major consumer protection body.
The FCCPA provides that a consumer has the right to goods that are suitable for the purpose for which they are generally intended, of good quality and free from defects. The goods must comply with any applicable standards set by the industry regulators4. The Act further provides that the consumer has the right to reject goods where the goods are not fit for the purpose which was communicated by the seller; where the consumer did not have the opportunity to examine the goods before purchase and upon delivery it does not match the quality envisaged in the sales agreement; or where the goods are defective and unsafe. The Act provides that in these instances that the consumer is entitled to a full refund of the money paid for the goods and is entitled to return the goods to the seller5. This provision further serves to the consumer as an implied warranty that the products received are reasonably safe, of good quality, not defective and are fit for purpose. Where a consumer has suffered injury resulting from the purchase of damaged or defective goods, the Act provides that the consumer files a complaint to the FCCPC.
Where a consumer seeks to enforce his rights under the purview of the Law of Torts, such an action will come under the doctrine of negligence. The Supreme Court in the case of Diamond Bank v P.I.C6 defined negligence as failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation. It is expected that a manufacturer owes the consumer a duty of care. This duty of care is to ensure that the products being manufactured are fit for purpose and safe for the consumer. The neigbourhood principle as expounded in the case of Donoghue v Stevenson7 provides that the manufacturer has a duty to take reasonable care that goods made by him are free from defects that are likely to cause injury. For a claim in negligence to succeed there must be a duty of care, a breach of that duty, causation and damages. The remedies available to a consumer where there is a claim in negligence, the remedies available to a consumer are damages, specific performance, restitution, rescission and reinstatement.
Going by the above provisions, the contract of sale is between the seller and the buyer. However, when you consider that the seller in this instant may not be easily ascertainable, the online marketplace will be the resort for the consumer where injury arises. Like we earlier saw in the Bolger v Amazon case, the consumer recognizes the online marketplace as the only ascertainable, reasonable party to lay complaints to and as such liability for damaged goods will be imposed on the online marketplace.
CONCLUSION AND RECOMMENDATION
Although they have a duty to protect the consumer, liability cannot be placed completely on the online marketplaces for defective goods as they are not manufacturers or were not involved in the manufacturing process of the product. This would however depend on the facts of peculiar case as there are circumstances where online marketplaces also manufacture and sell products on their platforms, in that instance, it would not be out of place to impose liability for defective products on the online marketplace. They also have a responsibility to ensure the quality of products being advertised and sold on their platforms but there is also a responsibility on the buyer to ensure due diligence when purchasing products online and to be aware of the risk involved in online trade. Imposing strict liability on the online marketplaces may lead to a decline in the growth of online trade as they do nothing more than connect buyers and sellers. Allowing them flourish will promote innovation and lead to a growth in the online market.
1. (2020) 53 Cal. App. 5th 431
2. Garner (n 20) 365
3. Sale of Goods Act 1893, Section 34
4. Section 131 of the Federal Competition and Consumer Protection Act, 2018
5. Section 122 of the Federal Competition and Consumer Protection Act, 2018
6. (2009) 18 NWLR Pt 1172 62
7. (1932) AC 562
Originally Published 30 July 2021
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