Legal Aspects of Contracting

LEGAL ASPECTS OF
CONTRACT
ADMINISTRATION

LEGAL ASPECTS OF CONTRACTING 1
Over the past few decades, by the virtue of the globalization, growing e commerce
transactions and the developments in the information and communication
technologies, increasing number of documents are being prepared and executed
electronically. However, it must be noted that the electronic contracts are governed
by the regulatory gaps in the form of a number of risks and compliances of the
respective information technology legislation and other applicable laws (Mik, 2011).
The issues of the contract law are further complicated in the electronic contracts.
Accordingly, consistent efforts are being made at both at the national and
international level for the regulation of the electronic contracts. The following work is
aimed at exploring the various facets of the electronic contract concerning the
Electronic Transaction Act. The work would comprehensively analyse the various
issues that arise in the event of the electronic contracting in context of the online
sales and purchase contracts in case of imports and exports. Further, the work
would also shed light on the risk management means available to the managers,
which will serve as a guidance to them while drafting the drafting electronic
contracts, as well as will prepare them against the issues arising from the new
information technologies.
The following segment would describe the issues that may arise out of the electronic
contracts. In order to understand the issues, it is first vital to understand the
eContracting process. The process is comprised of the one or more of the activities
that take place within a decently electronic surroundings (Boykin, 2012). The
activities may be one or more of the following listed. Firstly, it includes the activity of
negotiation where the proposed parties negotiate the terms of the contracts by the
utilisation of the electronic communication method (Cooperative Research Centre for
Construction Innovation, 2013). Secondly, it includes the administration and the
management of the contract through the electronic systems. The said administration
may be using an online collaboration system, which can aid in the various stages of
the contracts formation such as the agreement to contractual terms, to facilitate the
delivery of the contractual notices, and others. Third activity includes the storage of
the relevant records and communication after the execution of the contract using the
electronic storage medium. The above list is not exhaustive. Hence, it is evident that
there are a varied range of activities, which can involve a number of legal and
security risks, owing to the volatile business environment. While mostly all of the

LEGAL ASPECTS OF CONTRACTING 2
sectors are presently driven by the use of modern communication technologies for
the conduct of the business, it is crucial that the participants of the contracts are
aware of the legal and security risks linked with eContracting.
At general level, a contract is referred to as the agreement between parties that is
enforceable at a court. An electronic contract denotes a contract that is formed
utilising the means of the electronic communications (Tasneem, 2015). As in case of
the general law for contract, five essential conditions that are listed as follows must
also be present in the electronic contracts. These conditions are existence of an
offer, acceptance of the offer, certainty in terms and objectives of the contract,
intention to create legal relationships between the parties and the adequate
consideration (Latimer, 2016). A number of judicial decisions pronounced have
accorded the significance of each of the elements listed above. In addition, the
judicial pronouncements have clearly stated that these essential terms must be
present regardless of contract is entered in written form, oral form or electronic
forms. Thus, in order to address the issues related to the application of the traditional
contract principles with the use of the technology and resolution of the uncertainties,
the United Nations Commission on International Trade Law (UNCITRAL) adopted
the UNCITRAL Model Law on Electronic Commerce in the year 1996. The said
adoption was aimed at promoting the synchronization and unification of international
trade law. On lines of the above, the country Australia also enacted state wise
legislations namely the Electronic Transactions (Queensland) Act 2001 (Qld),
Electronic Transactions Act 1999 (Cth), Electronic Transactions Act 2000 (NSW).
These acts are applicable in the respective states. Thus, it is essential for the parties
entering into the electronic contracts to be considerate of both the general law
contractual principles and the respective state act for electronic transaction.
Further, in addition to the above, the parties must ensure that the e contracts are
complying the basic minimum security goals e-commerce and e-business as have
been generally explored over the years in various sectors and industries (SANS
Institute, 2019). The basic security principles are explained as follows. First key goal
is to ensure the confidentiality. The parties to the contracts must ensure that there is
adequate protection of electronic records as against the exposure towards the
unauthorised disclosure or use. The second preliminary requirement is to ensure the
integrity of electronic records and thus preventing them against the duplication,