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- an offer and an acceptance
- an intention to create legal Relations
- consideration
The critical point here is who is making the offer and who is accepting it? A couple of case studies illustrate the situation.
The Hotmail v Money Van Pie (Us Case)
Contracted terms were posted on a web site The customer clicked on anon-screen icon "I agree". The Court held that the customer was in contract. There was an offer and an acceptance. The jargon for this is a "Click Wrap" contract.
The Argos Case
Argos advertised a television on their web site for £2.99 instead of the correct figure £299. They immediately received over £1 Millionworth of orders; one particular punter requesting over 1700 tv's Argos refused to deliver the goods arguing that they had been incorrectly priced. Was there a binding contract? What remedies existed for those customers who had accepted offers?
Invitation to Treat
The invitation to treat is a long established legal concept. This concept has goods simply on display to the customer as in the shelf ofa shop. This suggests the offer was not being made by Argos but by thecustomer by presenting the goods at the checkout. This is where acceptance was deemed to take place. In other words it was Argos who could accept or reject the customer's offer and not the other way round. Thus a web site should only be held out as a shop window so any orders placed simply constitute an offer needing acceptance to create acontract.
Automatic Acknowledgements
For so good for Argos as a customer's order was probably an offer not an acceptance. But the Argos web site had efficiently sent out automatic acknowledgements on receipt of each order. Were these acceptances of the customer order? Very possibly.
(B) An intention to Create Legal Relations
So for your web site you need to be careful with automatic responses asthey could confirm a contract based on your mistake. The safest route is to have automatic acknowledgements merely do that i.e. acknowledging a customers offer and not putting you into contract unless you want to at that point.
Upfront
Obscure small print must be abandoned in favour of prominent links on each page of the web site to clearly set out terms and conditions ofbusiness. Remember if it is unclear whether the terms and conditions have been read and agreed by the customer then it is possible a court would hold that these terms and conditions didn't apply. They must be clearly drawn to the customers attention.
Clicking on an Icon
The difficulty with the WWW is that customers meander all over the place not necessarily in any logical sequence so it is important to have the customer confirm that he has read, understood and accepted theterms and conditions by clicking on an icon. That way a customer wouldhave great difficulty in successfully arguing that he was not aware of the terms and conditions.
Unfair contract terms
Any term in a contract between a seller or supplier and a consumer which has not been individually negotiated and which is unfair is not be binding on the customer. Unfair terms include:-
- Excluding or restricting liability for the company's breach of contract
- Allowing company to perform in a different manner than detailed
(C) Consideration
Consideration is the agreement to exchange value or money. £2.99 forthe TV in Argos case or £299 as they would presumably prefer.
If you would like more information please contact an experienced member of our team profiled on the right of this web page, telephone 0800 052 1541 or email business@wilson-nesbitt.com.
