Problems relating to the formation of online contracts: A comparative perspective

Abstract

The formation of online contracts has enjoyed considerable judicial and academic attention in American law. Generally, American courts are of the view that the rise of online contracts has not necessitated any changes to the fundamental principles of the law of contract, although commentators argue that the enforcement of online contracts has stretched the requirement of mutual assent beyond recognition. This article engages in a comparative evaluation of these arguments, as well as some proposals contained in the American Law Institute’s Draft Restatement of the Law, Consumer Contracts. Ultimately, the aim is to identify whether the principles regarding the formation of contracts in South African law ought to be adapted or supplemented to accommodate online contracts. It is found that both legal systems subscribe to fairly lenient formation requirements. The possibility of recognising more stringent assent-related requirements, such as imposing specific disclosure requirements, is investigated. It is concluded that there is little to be gained by insisting on stricter formation requirements for online contracts in general, because consumers rationally choose not to read these contracts. Instead, recognising these concerns may provide the impetus for increased reliance on other forms of control, most notably regulating the use of certain problematic standard terms.