Business Law - Making a Contract online

It is well established offline how a contract should be formed based on case law through the years and how a contract is concluded. The conclusion of a party is when both parties sign the contractual document which sets out the agreed terms and conditions. It is also well known that a contract can be agreed upon verbally but if either party then turns around and denies the existence of any contract between the parties, it is far more difficult to establish evidence to the contrary and proving that an agreement was made between the parties.

To establish a legally binding contract, four elements need to be established, consideration, intention to create a legal relation, the offer and then acceptance. Consideration means that each party will benefit in some way by the contract that is being entered into. The intention to create legal relations is generally apparent in all cases, because of the fact that both parties have entered into negotiation. The tricky part to establishing a legally binding contract is the offer and acceptance part. An offer is when something id offered to the other party to buy, but it must be of a particular item, including the specific nature of the item, the price to be paid, how it is to be delivered and when payment is due. This is often confused with an invitation to treat. It must be remembered that you cannot accept an invitation to treat and therefore cannot conclude a contract.

Generally acceptance is usually achieved by the two parties signing a document containing the terms and conditions relevant to the item that is offered and possibly any exchange of correspondence. Acceptance would usually determine the time the contract was entered into, the terms of the contract and which jurisdiction the contract is relevant too. This is very common, as most contracts state which jurisdiction the law will relate to just in case there is a dispute on the horizon. Online acceptance is slightly different to a hard copy contract, but the general legal principles are no different. There are essentially two ways to concluding a contract online and that is by email and on the web.

The exchange of emails is similar to exchanging of physical correspondence. It must be that the email accepting the offer must have the same terms as the email giving the offer, therefore a contract will be concluded by a second email, but inevitably questions will always arise as to the validity of the acceptance. Outside the web, the first letter posted to a party after the offer accepting that item is the once which is deemed to be the acceptance which will be the successful one. But when it comes to online contracts, it has not been determined exactly what constitutes the same as posting a letter. It will usually depends on the individual case or situation to determine when an acceptance has been reached.

I am a legal writer covering advice on topics of law including business law, for further text and similar works visit business contracts or contact a solicitor today.

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