In: Economics
Answer:
When parties enter into contracts with each other and they are interacting face to face, it is easier to avoid mistakes than when they are at a distance and contracting with each other through the internet as medium. When parties enter into electronic contracts the whole contract can literally be concluded within seconds at the click of a button.
The traditional paper based contract law has rules that apply to matters such as jurisdiction, validity, formation of contract, modifications to contracts. In the world of online trading these are all issues that arise in online contracts and is a challenge to the traditional concepts of contract law.
The first issue that arises is to ensure that online contracts are legally enforceable. Before the advent of the internet contracts were normally concluded either in writing or by oral agreement. The United Nations Convention on Contracts for the International Sale of Goods (1980) (CISG) which was adopted in 1980 provides for the recognition of contracts in international sale of goods. It does not provide for E-Commerce but a frequently overlooked article in the CISG provides for a description of what writing means in the context of contracting. Article 13 provides that for the purposes of the convention, writing includes telegram and telex. Hill argues that this article is sufficient to include electronic contracts.
The United Nations Commission on International Trade Law realised that the growth of electronic commerce required it to take steps to recognise that contracts can be validly concluded by using the internet. The steps taken by the UNCITRAL had to ensure that users of E-Commerce should be able to electronically sign the contracts to ensure their enforceability.