1. “Click Wrap” agreement

When you click “I agree” on websites you are entering into what is commonly known as a “click wrap” agreement.  Click wrap agreements are binding irrespective of whether you have taken the time to actually read the terms and conditions to which you have agreed.

2. When is an email received

In Australia, unless the contrary is expressly agreed, an email is taken to be ‘received’ when the email becomes capable of being retrieved by the addressee at the electronic address designated by the addressee. Alternatively if no address has been designated by the addressee, the email is received when it is capable of being retrieved by the addressee and the addressee has become aware that the email has been sent to that address.

3. ‘Meeting of the minds’

The legal basis of an agreement is a ‘meeting of the minds’. So what if the person you are dealing with is a computer that just gives you an automated reply to your offer to buy a product. This is the way that many sites work - you order online and everything is done via automatic computer interaction. How can that be a ‘meeting of the minds’ when you are dealing with computers and software only?

Thankfully legislation has been enacted confirming that a contract can be formed by the interaction of an automated message system and a natural person.   Such agreements will not be invalid, void or unenforceable on the sole ground that no natural person reviewed or intervened or “agreed” to the contract.

What that means is that once you put something “in the basket” and insert your credit card or Paypal details and push “Buy now”, the deal is done and you cannot escape the contract by using the technical argument that there was no contract because a computer does not have a mind, and hence there can be no meeting of the minds that is required to create an enforceable contract.

4. Input errors

But what if you got it wrong and inserted “70” items instead of the required “7”. Again, the law now states that if a contract is created via the use of an automated system, but a natural person has made an input error in the electronic communication (and the message system does not allow that error to be corrected), then the person making the error has the right to withdraw that portion of the electronic communication that was inputted in error. Of course, if the person has already received the 70 items and used/sold them, then the change cannot be affected, but if contact is made quickly then the contract will not be considered binding to the extent of the error.

5. Electronic signature Creating a binding agreement if a signature is required. If the signature of a person is required on a document to create an agreement, that requirement is taken to have been met in an electronic communication if;

  • The person signing is identified
  • There is an indication about what the person’s intentions are;
  • The method used was reliable; and
  • the person receiving the email has consented to an electronic signature being utilised.

This means that an actual signature or facsimile of the signature is not required. A signoff block at the bottom of an email, together with confirmation of intention will be enough to create a legally binding arrangement.