Question

To be enforceable, every contract must include an offer and an acceptance. Consider a typical online retail transaction in which an item is ordered and paid for online by a purchaser and shipped by the seller. In two paragraphs. identify specifically and describe the actions that constitute the offer and the acceptance

Answer 1

There are three fundamental requirements for the formation of a legally enforceable contract, and they are as applicable online as offline. First, the contracting parties must agree on the terms of the contract, through the issue and acceptance of a contractual offer. Second, they must intend to create a legally binding agreement. Third, the contract must be supported by consideration: an exchange of value. An offer has been defined as an "expression of willingness to contract on specified terms, made with the intention that it is to become binding as soon as it is accepted by the person to whom it is addressed". An offer must be sufficiently clear, certain and communicated to the offeree (the person to whom the offer is made). The acceptance from the offeree must be equally clear, unequivocal and in response to the offer. And the acceptance must mirror the terms of the offer and be communicated to the offeror (the person making the offer).

Internet transactions typically require the completion of web order form by the customer followed at some point by the clicking of a "complete order" button or link. After the submission of an order, the customer will usually be taken automatically to a new web page confirming whether or not the order has been placed successfully. A confirmation email may also be sent. In the absence of any factors to the contrary, there is a risk that the contract may be formed once the confirmation page is displayed or the confirmation email is sent or received. An online trader’s T&Cs of sale may distinguish a confirmation page or email from a contractual acceptance. In these circumstances, the buyer’s order will typically be categorised as a contractual offer. Accordingly, the trader will not be obliged to fulfil the order until after acceptance. This approach recognises that an online trader’s stock will be limited, and also that a trader may wish to retain some discretion over the persons with whom he contracts.

The trader’s T&Cs should specify what acts will constitute the offer and the acceptance. For instance, in relation to the sale of goods, the T&Cs may specify that acceptance will only take place once the customer is notified that goods have been shipped. However, a statement in the T&Cs may not be conclusive in all circumstances. If the order process has been configured in such a way that a reasonable customer would consider that a contract of sale has been formed, then a statement to the contrary buried away in the T&Cs may not assist a seller trying to avoid a contract. Acceptance isn't always communicated by words; sometimes actions suffice. For example, if a buyer places an order to buy goods at a certain price, and the seller responds by shipping the goods, the seller's actions signal acceptance of the offer. When you click the "Place Your Order" button at Amazon.com, tell the cab driver where you want to go, or hand a $20 bill to the cashier at the movies, you are accepting an offer to enter into a contract. An acceptance is a necessary part of a legally binding contract: If there's no acceptance, there's no deal.