The Commerce Select Committee has reported back on the Electronic Transactions (Contract Formation) Amendment Bill with some recommended amendments.

This is a Member's Bill that provides for an amendment to the Electronic Transactions Act 2002 (ETA) to confirm that the general rule of contract formation applies to contracts accepted by electronic communications.

Under the proposal in the Bill "an offer is deemed to be accepted by an electronic communication at the time of receipt of the acceptance by the offeror".

The select committee considered that this approach was too rigid, as it could create a misapprehension that an offer could be deemed to be accepted electronically "only at the time of receipt". Instead, the committee has recommended that for the purpose of the formation of a contract, an acceptance by electronic communication is taken to be communicated to the offeror at the time determined by section 11 of the ETA to be the time of receipt for that electronic communication - unless the parties to the contract have otherwise agreed or an enactment provides otherwise.

Section 11 of the ETA provides that an electronic communication is taken to be received:

  • in the case of an addressee who has designated an information system for the purpose of receiving electronic communications, at the time the electronic communication enters that information system; or
  • in any other case, at the time the electronic communication comes to the attention of the addressee.