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"The rules on offer and acceptance may have been adequate in the twentieth-century: they are inappropriate for the technologies of the twenty-first". Do you agree? Give your reasons.

Extracts from this essay...

Introduction

"The rules on offer and acceptance may have been adequate in the twentieth-century: they are inappropriate for the technologies of the twenty-first". Do you agree? Give your reasons. Contract formation in English law generally does not require the use of any particular communication method for making an offer or indicating an acceptance. The rules on offer and acceptance were revisited in the 19th century when it became necessary that reasonable degree of precision and certainty be attained in any legal dealings especially with the growth of business transactions and the need to meet up with the technologies of the time. This led to the evolution of 'postal rule', which states that an acceptance once posted becomes effective rather than when it is received. This was a deviation from the normal way of contract formation, which requires an acceptance to be received before it becomes binding. The rules as we will discover were precise and stipulated a definite approach in determining at what point a contract becomes binding. The purpose of the rule was to create certainty especially in business, however, the consequence of this is that it is often difficult to fit the precise model of the postal rule within the modern day means of communication which is characterised by the influx of electronic means of transaction such as the internet, telephone, fax, telex and so on. This essay will focus on an analysis of which of the two rules - postal and pre-postal - will be most applicable in terms of contract formation using these electronic media most prevalent in the 21st century. Offer and Acceptance In determining the existence of an agreement in any contract, it is important to determine if there has been an event which is capable of

Middle

it reasonably deems to be inappropriate.26 If the postal rule were applied, then acceptance would normally27 be effective as soon as it is received in the network. E-mail Acceptances E-mail is a digital means of communication by computers joined together in a network28. It can be used to make an offer and or to communicate an acceptance. There has been no case law on the acceptance of an offer through email, but to ascertain if 'postal rule' can govern communication by e-mail, we need to examine the process of delivering viz a viz that of postage. Email may be instantaneous, but it does not go directly to its destination, it goes through a host, which is likened to the post office. The problem with communication through e-mail is in asserting what stage a receipt has been acknowledged; if it would be at the point of being received by the Internet Service Provider, or at the point of being delivered at the recipient's mailbox or at the point that it is being read by the recipient. Delays in transmission of e-mail messages, incorrect addresses, and other identifiable factors, which may impede the receipt of the e-mail communication, can thus be likened to invalid addresses and wrong sorting that can be experienced in postage. In order to promote business certainty, the postal rule will be applied where it is reasonable to expect instantaneous receipt of the e-mail when communicated. It can also be argued that Electronic mail acceptance meets the general rule of contract formation whereby when an offer and an acceptance are to be communicated by electronic mail the acceptance is effective when it is received.

Conclusion

Proper Receipt: A document shall be deemed to have been properly received when it is accessible to the receiver at its receipt computer. No document shall be of any legal effect until it is received. 26 See above 4.03. Acknowledgement of Receipt: Each party shall properly acknowledge receipt of each document received by it. 5.03. Incomplete, Inaccurate or Corrupted Document: If the receiver of a document or other communication through EDI network reasonably suspects that it is incomplete, inaccurate, corrupted in transmission, or not intended for him, he shall promptly notify the sender and request clarification. 27 It should not be effective at that point for example, if it does not arrive at the offeror's computer because the acceptor misaddressed it. Such a qualification applies in the context of the postal rule. See Household Fire Insurance v Grant 28 Akdeniz Wall, and Walker, ed., The Internet, Law and Society, Harlow: Longman 2000 p349 29 All Internet communications are packet switched. This means that they are sent as several packets rather than one whole. If any where to go missing, the information would be corrupted, therefore the client receives with the information package a checksum, a calculation of how much information should be and if the checksum does not match the information, the client knows there is missing/incorrect information and can request for it to be resent. 30 See Davies, supra n.3, at 106. A he pointed out, messages sent internet travel several intermediate servers but these servers merely forward information in the same way as a standard telephone network carries the necessary electronic impulses of a telephone conversation. 31[1983] 2 A.C. 34 32 COM (1998) 586; OJ 1999/C 30/04 Article 11 33 Halson Rodger, Contract Law, p.158 also see Consumer Credit Act 1974, ss 67-73

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