What are the legal implications in e-commerce transactions? | The New Times
These days, technology has changed our every way of life including how we buy and sell products and services. Fewer clicks on our smartphones or computers now and we can book a cab, a hotel room, a cinema ticket, buy salt, pizza, groceries and a lot of other products and services.
To do so, we often download apps or go to certain web platforms, create accounts by providing personal information and agree to the terms and conditions. We are then able to buy the products and services we are looking for.
I will confess that shopping on your fingertips, getting the products on your doorsteps make our life a lot easier and feels like a walk in the park, but from a legal point of view, do we really know what it means?
These contracts are construed as valid and binding sale contracts. But what is contained in these contracts? How are they effective? Are they legal when compared to the traditional contracts? To answer these questions let’s first see how contract is usually made;
Traditionally, one party invites another to a contract by making an offer and the other party may accept the offer right away or make a counter-offer.
When the offer is accepted, the contract is then formed though some other elements should be taken into account like consideration, capacity of the contracting parties and the legal intent for the contract to be valid. Whereas, contract of sale concluded through an online transaction is considered to meet these elements mostly due to the presumptions that; if a person concludes a contract with another party, acknowledges that she understands and agrees that the terms provided therein (in the contract) are true and also if she goes ahead and signs the contract (agrees to the terms), she is subjected to it, thus creating a legal obligation. Although it is presumed that way, it has been established that most users of these platforms do not read those terms before agreeing to them.
What is in the terms and conditions?
These terms and conditions contain mainly responsibilities and rights of the parties (platform and the user). However, one of the differences between these kinds of contractual terms and the traditional ones is that in the later, parties have a chance to negotiate and make objections. Whereas in the former it is a “take it or leave it” kind of deal. Terms are drafted and imposed by one party (platform) and the other party can either agree to the terms or not, there is no negotiation or objection option available to the other party (user). This one sided terms of contract may lead to inclusion of unfair clauses such as liability exclusion clauses which is mostly the case.
Let’s take some examples to understand these kinds of clauses; below is an excerpt from one of the ecommerce platforms in Rwanda “Disclaimer of Warranties; Limitation of Liability”, “Terms of Service” reads “ In no case shall (the platform) , our directors, officers, employees, affiliates, agents, contractors, interns, suppliers, service providers or licensors be liable for any injury, loss, claim, or any direct, indirect, incidental, punitive, special, or consequential damages of any kind, including, without limitation lost profits, lost revenue, lost savings, loss of data, replacement costs, or any similar damages, whether based in contract, tort (including negligence), strict liability or otherwise, arising from your use of any of the service or any products procured using the service, or for any other claim related in any way to your use of the service or any product, including, but not limited to, any errors or omissions in any content, or any loss or damage of any kind incurred as a result of the use of the service or any content (or product) posted, transmitted, or otherwise made available via the service, even if advised of their possibility…”
These clauses limit or exclude liability resulting from the products or services displayed on the platforms. In some jurisdictions, laws prohibit unfair terms in contracts especially those excluding or limiting liability, however, in Rwanda we are yet to have a particular legislation of that kind.
In some other instances, these ecommerce platforms invoke clauses that tell the users that they are concluding a sale contract with a third-party vendor and that the platform isn’t party to the contract whatsoever. These clauses imply that the user is entering into a contract with another unknown party on terms dictated and set by someone who is not a party to that contract.
However, these kinds of clauses have been criticized by various legal experts but more recently in a groundbreaking case between Uber BV and Others v Aslam and Others decided by the UK Supreme Court. The court reasoned that it doesn’t understand how someone who is not a party to a contract can set and determine contract terms and its legal effects for other parties… who will not even have a chance to negotiate or object to those terms. Let alone the fact that they may contain unfair terms. While these clauses are common in the ecommerce industry, the UK Supreme Court through this case has been deemed to have set another direction for ecommerce sale contracts and other courts in different jurisdictions around the world are expected to follow this trend.
In Rwanda’s infant but fast growing ecommerce industry, the concept is not new. Some operators have “Terms and Conditions” but for some others, users are requested to confirm that they agree to the terms and conditions but when tried to access and read them, are nowhere to be found. It is not easy to determine whether they are not there or they are hidden from the user or some other technical errors.
Ecommerce operators in Rwanda should be more mindful when drafting their terms and conditions and if necessary hire a contract lawyer to assist them to make sure they align with applicable laws and regulations including antitrust laws. This is even more critical in times when the regulator is warming up to tighten the rope for the industry. In addition, people who use online platforms to purchase products and services are encouraged to read the terms and conditions to know beforehand what they are getting themselves into and see if they are comfortable with the terms.
The views expressed in this article are of the author and do not constitute legal advice. Please seek professional advice in relation to any particular matter you may have.
The writer is a corporate and commercial lawyer and Trainee Associate at K-Solutions & Partners