Electronic trading
In addition to the difficulties which dealing at a distance may cause, trading
by electronic methods (most commonly by computers over the internet)
may pose further problems because of the speed and method by which the
transactions take place, the facility to authorise transactions automatically
which would possibly amount to acceptance, and the location of the parties.
Apart from the regulations on distance trading discussed above, a further
set of regulations now exists, The Electronic Commerce (E C Directive)
Regulations 2002.
The regulations apply again to the consumer dealing with a business but
also between businesses, and address such issues as broad principles of
contracting electronically, online shopping, access to data, newspapers,
professional services and entertainment online. According to the
Department of Trade and Industry guidelines, the regulations are intended
to ensure that the European Union ‘reaps the full benefits of e-commerce
by boosting consumer confidence and giving providers of information
society services legal certainty, without excessive red tape’.
The Regulations do not change the basic common-law rules on offer and
acceptance but build on them, so the principles still need to be established
clearly. Is an on-line display of goods an invitation to treat or an offer? The
traditional ‘shopping’ situation in English law would indicate that a website
display is an invitation to treat, and this is in line with both case law and
with Regulation 12 of the Electronic Commerce (EC Directive)
Regulations 2002 which says that the customer’s order maybe the offer.
However, the position is not at all clear. Wrongly priced items will present
particular problems, as can be seen in the difficult situation that Argos
faced when advertising Sony televisions for £3 instead of £300 in
September 1999. As soon as the mistake was noticed Argos contacted
customers who had tried to place an order. However, some customers had
placed orders and had received confirmation. Argos argued that they had
been mistaken over the price and that this should have been clear to
customers – see the case in mistake of Hartog v Colin and Shields(p.191).
The importance of uniformity of trading principles and the need for fair
dealings is clear, so the move towards this should be welcomed. However,
the regulations use words that will certainly need interpretation by the
courts to provide definition, such as the requirement to provide electronic
acknowledgement of receipt of an order ‘without undue delay’ and the need
to provide ‘appropriate, effective and accessible technical means’ to correct
input errors before placing an order. An important aspect of the regulations
is that they do not stipulate the way in which contracts are formed, only the
principles of fairness on which they will are based. This means that the
common law principles remain vital and will need further extension, by
analogy, to apply to modern methods of trading.
40 Contract law