University Business Law Report: Online Contract Litigation

This report delves into the intricacies of online contract formation and the associated legal frameworks. It begins by examining the background and legal context of online contracts, highlighting the impact of technological advancements and globalization on e-commerce transactions. The report then explores the essential elements of online contracts, drawing parallels to traditional contract principles while acknowledging the unique challenges presented by the digital environment. It analyzes the role of digital signatures, data protection, and the remedies available for contract breaches. Focusing on the legal landscape of France, the report identifies key regulatory bodies such as the Data Protection Authority (CNIL) and the Authority for Regulation of the Electronic Communications and Postal Sectors, as well as significant legislations like the UNCITRAL Model Law and various national laws governing data protection, electronic signatures, and consumer rights. The report concludes by emphasizing the importance of legal regulations in mitigating the risks associated with online contracts and ensuring their successful execution, thereby contributing to a secure and efficient e-commerce environment. Finally, the report also mentions some of the whistleblowing cases and their importance.

BUSINESS LAW REPORT
Litigation in the formation of online contracts

LITIGATION IN THE FORMATION OF ONLINE CONTRACTS 1
Contents
Introduction................................................................................................................................2
Background and the legal context of the online contracts.........................................................2
Regulatory Bodies......................................................................................................................4
Legal Regulations.......................................................................................................................4
Conclusion..................................................................................................................................5
Bibliography...............................................................................................................................6

LITIGATION IN THE FORMATION OF ONLINE CONTRACTS 2
Introduction
Over the last years, significant developments can be seen in the information and technology
innovation and the resulting implications in the e commerce transactions. The advent of the
technology and the globalised business processes, the increasing number of contract are being
prepared in the electronic form, referred to as the online contracts. The electronic contracts
further pose complexities due to the risks in the business environments and the varied
compliance requirements. The authorities are making efforts to regulate such transactions by
the enactment of the regional and international laws. The following assignment is aimed at
exploring the various facets of the online contracts with respect to the legal rules, theories and
the other literary material. In addition, the report would highlight the chief authorities and the
key legislations as have been laid down in the context of France to govern the matters related
to the electronic contracts.
Background and the legal context of the online contracts
The online contracts are referred to as the process where one or more contract processes are
carried on in the electronic form. This includes the negotiation process, management and the
administration of the contract with the aid of the electronic communication method, relevant
records being retained via electronic storage and the execution of the contracts via the
electronic means of communication1. In order to ensure the efficient performance of the
online contracts, it is imperative for the parties to be aware of the security and privacy risks
associated in the electronic environment.
It is significant to note that though the online contracts are designed in the electronic
environment, it must be ensured that the basic essential elements of the contracts as stated in
the civil code are present therein as well. The essential elements of the contract are the
presentation of the offer, acceptance of the offer, sufficiency of the consideration, definite
terms and conditions in the contract, and the intention to bind the parties in the legal
relationships. It is imperative to note that the French Law regulates the validity of electronic
contracts2. Thus when a trader enters into an electronic transaction, and the services have
been rendered or the delivery of goods is proposed must ensure to make available the
applicable contract terms. This availability of the contract terms must be together with the
1 N. Helberger et al, "Digital Content Contracts For Consumers" (2012) 36(1) Journal of Consumer Policy.
2 The London School of Research and Political Science, The new French law of contract (Web Page, 06 July
2019) < http://eprints.lse.ac.uk/75815/1/Rowan_New%20French%20law_2017.pdf>.

LITIGATION IN THE FORMATION OF ONLINE CONTRACTS 3
allowance of the conservation and reproduction of the contracts. For the must element of the
contract that is the presentation of the offer, it must be significantly noted that together with
the terms proposed, the offer must also comprise of the following essentials.
Firstly, the steps to be followed for the conclusion of the contracts by electronic means must
be laid down. Secondly, the measures must be listed by which the input errors can identified
and corrected. Thirdly, in addition to the above, the offer to the contract must also comprise
of electronic means of consultation available to the trader and commercial rules that would
bind the parties and the transactions legally. Fourth essential is the description of the different
languages for the conclusion of the contract.
One of the yet another key elements to the online contracts is the role of the digital or e-
signatures. One of the example of the uses of the E signature contract in the France is when
the buyer is engaged in the purchasing of the goods or services. These electronic signatures
are state to be having the evidential value and are of prime significance where the evidential
value holds critical importance such as among the professionals like notaries, lawyers,
banking institutions. The buyers are in receipt of a confidential number which is sent to
ensure the identity of the individuals.
The article 1127-2 of the Civil Code lays down the three-step procedure that is required to be
complied with for the lawful execution of an electronic contract3. This involves the goods or
services being selected by the offeree that have an intention to be bought, the offeree must be
able to scrutinize the price and other relevant details of the order and the incidental errors;
and ;lastly there must be confirmation of the offer by the offeree thereby conveying the
acceptance.
The remedies available for the non-performance of the contracts are similar to the remedies
of the breach of a normal contract. The French Civil law is comprised of various legal
consequences for the breach such as unenforceability of the contract, cancellation of the
contract, specific performance of the contract, together with the provision of the damages.
There is absence of the punitive damages and that the damages are prescribed only as a
remedy to the breach and can be in addition to any of the above stated actions.
Some of the other matters that are governed by the legal rules of the online contracting are
the collection or use of the personal data of the parties, use of encryption, compulsory
3 Mymedoc, General Terms 0061nd Conditions Of Sale (Web Page, 06 July 2019) <
https://www.mymedoc.fr/terms-and-conditions>.

LITIGATION IN THE FORMATION OF ONLINE CONTRACTS 4
disclosure of personal data in certain circumstances, electronic payments and the guidance for
the sites aimed at children. These are in addition to the limitations on linking to a third party
website, licensing of domain names, procedure of the selection of a business name and the
restrictions therein.
In a most recent development, the European Commission on 26 April 2018, facilitated the
publication of a proposal for regulating the fairness and transparency in context of the online
intermediation services among the business users. The said development is significant
because the activities of digital platforms at the EU level would be regulated for the first
time.
Regulatory Bodies
In context of the business and the legal environment of the France, the following regulatory
institutions govern the various aspects of the online contracting. The Data Protection
Authority (CNIL) is the chief independent regulatory institution that ensures the controlling
and compliance of the Data Protection Law in context of the personal data4. This authority is
also responsible for the proposal of the regulatory or the legislative measures to the
government and the laying down of the simplified standards in context of the information
technology processes and the techniques.
Further, the Authority for Regulation of the Electronic Communications and Postal Sectors
also regulates certain matters which are listed as follows. The key matters of regulation by the
above authority are the tariffs, resolution of the disputes between the operators, regulation of
the unfair trade practices, protection of the interests of the holders of the copyright, barring
the illegal sites, checking on the practices like fraud and money laundering, fighting against
the abuses of dominant positions and others.
Legal Regulations
One of the major regulations that has been enacted to harmonize and unify the international
trade laws in context of the application of the traditional contract principles with the use of
the technology and resolution of the uncertainties, is the UNCITRAL Model Law on
Electronic Commerce as adopted by the United Nations Commission on International Trade
4 Rami Kawkabani, Digital business in France: overview (Web Page, 06 July 2019)
<https://uk.practicallaw.thomsonreuters.com/5-618-4887?
transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1>.

LITIGATION IN THE FORMATION OF ONLINE CONTRACTS 5
Law (UNCITRAL) in the year 1996. Some of the other national level legislations that govern
the e commerce and are codified are listed as follows.
There have been enacted various laws to govern the various aspects of the businesses. The
Law No. 78-17 of 6 January 1978, commonly referred to as the data protection laws has been
enacted to oversee the data files, data processing, and the liberties5. Law No. 2000-230, was
enacted on 13 March 2000 to govern the adaptation of the law of evidence to information
technologies and the introduction of the electronic signature. This is followed by the Law No.
2014-344 has been laid down on 17 March 2014, which is aimed at the improvement of the
pre-contractual information and is basically related to the consumers. The law governs the
distant contracts and their conclusion and the creation of a ‘French version’ for the purpose of
suing in the courts. This is followed by the Law No. 2015-912, which is related to the
surveillance of the electronic communications and the internet, and is in force since 24 July
2015. Further the EU Directive 2016/1148 which was prescribed on 6 July 2016 have been
lately implemented on 26 February 2018 in the form of Law No. 2018-133 which is mainly
related to the security of the information systems and network in general. In addition to the
above, there have been a number of decrees such as Decree No. 2017-126 of 9 February
2017, Decrees No. 2017-1434, 2017-1435 and 2017-1436 of 29 September 2017, and Decree
No. 2017-1416 of 28 September 2017; to govern the various aspects of the electronic
contracts.
Conclusion
Thus, the discussions conducted above lead to the conclusion that the time shrinkage and the
cost efficiencies have led to the wide usage of the internet for the medium of development
and performance of the contracts in context of business transactions. The electronic contracts
are of quite a significance in the events where the parties are not known to each other or may
be geographically distant. The report has shed light on the various aspects of the management
and administration of the legal contracts, such as the similarities in terms of the essential
conditions between the ordinary contracts and the online contracts. The report further
highlights the legal features of the online contracts comprehensively such as the key
regulatory bodies in France and the key legislations that govern the various aspects of the
online contracts. Thus, it can be concluded that due to the privacy and the security risks
associated with the online contracts, there have been prescribed a range of legal regulations to
5 Law Business Research Limited, e-Commerce (Web Page, 06 July 2019)
<https://gettingthedealthrough.com/area/11/jurisdiction/28/e-commerce-france/>.

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be followed by the best practices to ensure that the said electronic contracts are executed
successfully.

LITIGATION IN THE FORMATION OF ONLINE CONTRACTS 7
Bibliography
Books
Helberger, N. et al, "Digital Content Contracts For Consumers" (2012) 36(1) Journal of
Consumer Policy.
Others
Law Business Research Limited, e-Commerce (Web Page, 06 July 2019)
<https://gettingthedealthrough.com/area/11/jurisdiction/28/e-commerce-france/>
Mymedoc, General Terms 0061nd Conditions Of Sale (Web Page, 06 July 2019) <
https://www.mymedoc.fr/terms-and-conditions>
Rami Kawkabani, Digital business in France: overview (Web Page, 06 July 2019)
<https://uk.practicallaw.thomsonreuters.com/5-618-4887?
transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1>
The London School of Research and Political Science, The new French law of contract (Web
Page, 06 July 2019) < http://eprints.lse.ac.uk/75815/1/Rowan_New%20French
%20law_2017.pdf>