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Contracts- Online Incorporation of Terms


Submitted By sammygee
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One of the main objects of the Electronic Transactions Act (ETA) was to facilitate transactions of an electronic nature . However, the ETA fails to incorporate clear legislation for courts to follow and interpret in relation to the incorporation of terms of these contracts.

With such ambiguity within the ETA , this can create problems for parties entering into a contract of an electronic nature. This problem extends further to the judicial system, with no clear legislative materials to facilitate courts in the interpretation of how terms are to be incorporated into a contract.

Two common methods of contract term incorporation will be discussed further in both an electronic and non-electronic context. These are incorporation of terms by signature; and incorporation of terms by notice.

Incorporation of terms by signature

Contracts that require a signature for validity will, under common law (for at least traditional written contracts), assume that the signing party has read and agreed to all terms that are stated within the contract, regardless of whether the parties have in fact read the contract terms. This reasoning was established in the English case of L'Estrange v Graucob

The High Court of Australia accepted L’Estrange v Graucob (L’Estrange) as good law in Australia in the case of Toll (FGCT) Pty Limited v Alphapharm Pty Limited (Toll).

Macdonald argues that if signatures were to be recognised as sufficient in the incorporation contract terms for online contracts, Toll and L’Estrange, would be recognised as the applicable law for these online contracts, despite the clear distinguishing features between traditional contracts and online contracts.

McCullagh, Little and Caelli, argue that electronic signatures are capable of being accepted as any signature on a traditional contract would. It is argued that electronic signatures,

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