Contract Law: Electronic Transactions and Online Sales Strategies

This report delves into the intricacies of contract law, examining its essential elements and their application within the context of electronic transactions and online sales strategies. It begins by defining contract law and outlining the fundamental components required for contract formation, including agreement, consideration, capacity, intention, formalities, and certainty. The report then explores incorporated terms, differentiating between implied and express terms, and analyzing the legal implications of conditions, warranties, and intermediate terms. A significant portion of the report is dedicated to the Electronic Transaction Act and its importance in establishing the validity of electronic signatures and contracts. It highlights the significance of digital signatures, the security measures, and the online sales strategies. The report also addresses practical solutions for difficult issues and concludes by summarizing the key concepts and their relevance in modern business practices. Finally, this report considers the role of online sales strategies in the formation of a contract, discussing verification, authentication, and security measures, including digital signature software, biometric identification, and the role of certification authorities.

Running head: CONTRACT LAW
Contract Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Discussion........................................................................................................................................1
Essential Terms of Contract.............................................................................................................1
Incorporated Terms of Contract.......................................................................................................2
Different types of Express terms.....................................................................................................3
The Electronic Transaction Act.......................................................................................................5
The importance of the Electric transaction......................................................................................6
Online Sales Strategies while formation of the contract.................................................................7
Practical solution of difficult issues.................................................................................................8
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................11

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Discussion
Thelonious owns Monk’s Mood Music and running a successful business. However in
present days he lost his significant in market share and therefore he decided to embrace digital
marketing strategies and plan to re-launch the business as MMMJazz which will be a premier
online store for the true jazz lover. Now according to the business structure he needs to use the
electronic transaction act and also form a valid contract for running the business.
The Australian contract law defines the contract as legal relationship where legal
enforcement of promise has been made freely by the parties with the intention to enter into a
contract. The English contract law has made a specific statutory modification of principles where
it helps to make proper contract for the parties. In Australia a contract should carry six basic
elements which help to form the contract which includes agreement, consideration, capacity,
intention to be legally bound, formalities and certainty1.
Essential Terms of Contract
The agreement is the most essential part in the contract where both of the parties
consider the existence of the agreement. One party will offer the consideration while other party
will accept it. Therefore when the party accepts the offer then they will be bound to follow the
terms of the contract. However the first party has the right to withdrawal the offer2.
The parties should have the legal capacity to enter into the contractual relationship.
Therefore minor, unsound mind people never able to enter in a legal contract. The person must
be sound mind who has the capacity to enter into the contract3.
1 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.
2 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
3 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.

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The consideration should present when the both parties entering into the contract. When
a person make the promise that means he or she is expecting something of value as an exchange
of the promise. Without the enforcement of the promise of contract it is not valid whether it is
money or goods or a promise.
According to the Australian contract law the parties should have intention to enter into
a legally valid contract which must consist of lawful matters. If the parties has contract for an
invalid consideration then it will be treated as illegal or invalid contract4.
The contract should satisfy all the standards of the legally binding terms because if any
issue arises when the contract is formed then it will be invalid. Therefore the contract can be
made orally or written or through any electronic media.
The certainty of the contract should be sufficient where the rights and obligation of both
parties will apply according to the relevant matters there should be a particular time frame for
complete the contract5.
Incorporated Terms of Contract
There are some other incorporated terms are also applied in the contract. In the implied
terms the party wants to add extra terms in that agreement where it define notice or delivery of
any things to other party or related to the business. The implied terms to the both parties about
the intention to form the contract and the different legal effects will applicable for the parties
according to the Australian contract law. The express terms help to make the contract in legal
and it should contain of promissory statement by written or verbal ways6. The implied terms
4 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
5 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.
6 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.

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define the in fact terms where the intention of the parties establishes before they enter into the
contract. It can have conditions, warranties or intermediate to the contract7.
Different types of Express terms
Condition is helps to implicates mutual decisions of the parties in the contract.
According to the terms when one party refused to accept the condition after the formation of the
contract then he will breach the terms and the innocent party according to the breach of contract
claim the compensations. In the case of Poussard v Spiers (1876) the court has found that the
parties has failed to satisfy the terms of conditions therefore the contract has been breached and
compensation has claimed 8.
The term warranty establishes assurance where both of the parties provide guarantees
and promises to each other. When the party is implicated the warranties into the contract, the fact
of the statement should fair according to the law of enforcement and must mentioned about a
warranty. It also added legal remedy for those parties who will breach the contract. Therefore
when warranty is made by the party who offering the proposal should agree with the terms and
the party who accept the offers can claim the compensation which is the warranty of the contract
is breached. One of the famous case in Clark v Macourt [2013]9 the court has described that one
party has breach the terms of warranties while he selling the products and due to the
dissatisfaction of the terms the buyer claim the damages where he was awarded with
compensation10.
7 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.
8 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
9 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
10 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.

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Another term is intermediate terms where it will recognize breach of contract when the
contract has been terminated. The contract should mention about the intermediate terms which
define the clauses where anybody can terminate the contract if the nature of the rules has been
breached. In a contract the promisee is liable to make the statement about the substantial
performance of the agreement in the contract then for any absence of such terms will make the
other party terminate the contract11. The incorporated terms of the contract basically helps to add
extra consequences in that agreement which can be mentioned as per notice or the course of the
dealings when the incorporated terms are added buy notice12. It should mentioned about the time
and the knowledge of the contract that it will helps to set a particular period from the formation
of the contract until it applications and the knowledge should mention about the terms which
should follow by the other parties in the course of dealing while they entering into the contract
for running the business by the abiding terms which is incorporated of the contract13.
Therefore when Thelonious start his new business he should follow all the contractual
terms where the essentials of the terms should be followed and in some cases the incorporated
terms are also important to follow before he will enter with other parties into a contract and the
consumers who will use the services they will also have the knowledge about the using the
online services and performed according to the consequences14.
The Electronic Transaction Act
The electronic transaction act is implied by the Australian government for those people
who are running their business through the electronic transaction and communicate with the
11 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
12 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
13 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.
14 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.

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consumer for interest of the business15. The Electronic Transaction Act 1999 is introduced to
help the transaction by providing information handwritten signature, record of written
information and document in material form 16. The electronic transaction is quite common
nowadays for running a business. According to the Australian and International law, electronic
signature is significant as valid way of Executive agreements. Therefore when a person was
intent to running a business through online then the electronic transaction act protects the
authentication and verification of the business. When a contract has been forms it should be valid
and must satisfied all the essential terms of the contract. Therefore in the electronic signature is
one of the important legal enforceable parts in the electronic transactions17.
The electronic contract will be recognized as a valid agreement when the contract is made
with the appropriate elements and can be accessed after the execution and the parties should
make the mutual consent where they expressly or impliedly accept the terms and received every
information through electronically. While the using of online services the person who is running
the business must bound by the communication with the consumers where they make their
consent for using the service. Sometimes providing the evidence creates some problems if the
elements are not enough to satisfy all the term of contract and in the transaction of the parties fail
to deal with each other. It only occurs because the only way of communication is electronic
application18.
When the transactions are used then the electronic signature also recognized as a valid
way of transaction or an electronic document. Therefore when someone is using the electronic
signature then the received information should be consultant by the recipient through
15 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
16 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
17 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
18 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.

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electronically. Through the electronic signature the method of the electronic transaction helps to
provide information and approval of the electronic documents signed the parties who are
entering into the contract must get the knowledge and circumstances of the transactions which is
reliable and appropriated for the transactions and the purposes and it will be also recognized as a
evidence of the transaction19.
The method of signing of electronic signatures is recognized as appropriate while the
electronic documents was generated and it helps to improve the contents of the electronic
document by self evident when the parties are entering into the electronic service20.
The importance of the Electric transaction
The electronic signature is helpful for the electronic transactions. Sometimes it make
difficulties because according to the performance of the contract the proof of Identity of the
signor who sign the documents is required but not possible to witnessed by another person. In the
traditional transactions the documents of the contract possible to altered after it is signed before
some issues makes risk in the electronic signature but it can be possible to minimize those risks
21.
The digital signature is another part of the electronic signature where it is defined a term
while the parties enter into the contract. Therefore the digital signature helps to identify different
verification code where it will generate the services private and publicly for the verification
purposes. The private key only applied for the person who is taking the service from the online
or electronic communication and public key helps to share the details in publicly and anyone can
19 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
20 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
21 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).

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visit the digital signature of the document.22 In the electronic transaction there are several beach
can identified because the use of the private key is not always accurate which may face the legal
challenges23.
If any person is required to given handwritten signature then another person can
fraudulently use that signature and accurate which make the legal challenges. If any person is
required to give inheritance signature then another person can fraudulently use that signature and
allow for use the services. Therefore digital signature sometimes fail to identify the electric
signature where the public key Cryptography should being kept secret. It is only accessible for
someone who intends to digitally sign the document. Therefore if any cyber attack or data
breached on the private key the person may face the consequences24.
Online Sales Strategies while formation of the contract
For avoiding the risk of Cyber attack or data breach several verification and
authentication techniques has been available for the users who are using the online services. The
digital signature software products sometimes help to measure the security when the user signing
on the online process. Therefore other securities can be identified by the use of biometric
identification and authentication, chain of custody features, timestamps, email and IP address
tracking. Therefore the certification authority only able to identify the verification of the users
where is secured the online databases and issued a digital signature certificate or a unique ID. By
the application of that ID the user can communicate with the online service25.
22 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
23 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.
24 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
25 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.

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It is the duty of the parties who are entering in the electronic transaction must look for the
every secured identification of the online transaction for avoiding the cyber attack. The software
achieving capability is also an important issue while using the digital signature because its
achieving system has the capability to retrieving everyday data from any dispute which can arise
with the agreement was signed in the months or years after the fact26.
Therefore the certification authority can verify the signor who entering into the contract
and use different verification techniques for inherent. In the digital signature software which
store all the information about the Signor. For protecting the privacy through the electronic
transaction act the government also introduces the privacy act which protects private and
personal information while using the digital signature process. The agreement which has been
made by the electronic media is also protected under the privacy act of Australia27.
Practical solution of difficult issues
While using the electronic transactions the privacy and security is one of the important
issues can the business man should face because while the consumers are using the Internet or
online shopping, they are also required for proper privacy and security from every hackers and
other personal database28. It is the duty of the owner of the business that he will protect the
personal information, documentation, identification and the digital signature while the consumer
using the service. Another issue that can be arising in the online transaction is the copyright and
trademark. The scope of copyright affects the essential legal terms where the online technologies
never identify the doctrine of copyright act in the electronic transaction29.
26 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
27 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.
28 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
29 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.

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The trademark is the legal and valid entity for the person who on the business if he using
some name or a logo related the authentication of the online shopping online business. It should
be protected under the copyright and Trademark acts because otherwise someone will use the
logo and name and misrepresent the business value by distinct trademarks30. In the online
business the structure of the processing should follow up online term & condition policies and
other relevant laws. Each and every ethical dilemma should be followed by the consumer and the
owner of the business because electronic transactions sometimes arise different issues like online
contract, record retention, obligations of import & export regulations, exchange control
regulations and other data protection laws. Before someone entering into the e-commerce
domain we should obtain the registered trademark for protect the copyright of that online site31.
The terms and conditions of the online site should be displayed while the user using the online
transactions it is the duty of the owner of the online transaction that every records about the
selling and buying process of the product to the online transaction32.
Conclusion
Therefore according to the law of contract breach of the terms can terminate the contract
the misrepresentation of the facts of the statements by any parties can arise legal obligations.
Therefore if any damage occurs due to the misrepresentation, the opposite party can terminate
the contract and claim the compensation. If any terms has been beached therefore it is the duty of
the both parties that they will follow all the terms and process the electronic transaction for
avoiding any miss representation of breach related to the contract33.
30 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
31 Freedland, Mark, et al., eds. The contract of employment. Oxford University Press, 2016.
32 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.
33 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).

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Thelonius can apply those advices while he will start up his online business.