3. Doing Business Online

Online trading is now governed by a number of laws, designed to protect consumers and ensure greater transparency on pricing. Companies which do business online need to be conscious of such laws and regulations. This part of the guide covers: Online contracts Consumer protection laws Financial services contracts Pricing online goods and services

a Forming Contracts Online
One of the problems associated with online trading in the 1990s was the suspicion among both businesses and customers that they did not enjoy the same protections in law when entering into contracts online as they did when a sale was made "over the counter".

In fairness to these businesses and consumers, the law at the time needed to be updated to give greater certainty to this new trading development. The law has been updated. Its application
to the formation of online contracts is now relatively straightforward.

Under Irish law (and EU law), binding contracts can be concluded electronically. No special provision needs to be made for this. In fact, it is assumed that unless the parties to the contract agree otherwise, an email containing an offer or an acceptance is sufficient to form the appropriate part of the contract.

There is one set of exceptions to this - contracts for transfer of land or for the execution of certain documents such as wills or trusts still have to be conducted in the traditional 'paper' way. So put another way, the vast majority of day-to-day business contracts can be formed online. So what about the signature, the all-important sign from the 'paper' era that someone was agreeing to a contract?

The legislation governing electronic commerce has sought to simplify contract formation by allowing for the receipt of electronic signatures. A simple email from a customer - for example, from marypoppins@enterprise-ireland.org - is normally sufficient to constitute an electronic signature.

For most purchases on a website, the customer will type his or her name and contact details before submitting the order. Sending this data - by clicking 'send' - is, in effect, making an electronic
signature, and this signature will be given the same legal validity as if the customer had signed a written contract and posted it. The legislation goes on to provide for an 'advanced electronic signature', which is required for contracts where signatures are required to be witnessed. These advanced signatures are normally achieved by encoding an email message through systems such as the Public Key Infrastructure. There are organisations that are accredited by law to offer certified public
and private "keys". These keys are used by parties to a transaction to authenticate more securely that the sender is the person with whom you intend to enter a binding contract.

In summary, given that a contract can now be concluded online, you should take the same care in concluding a contract in this form as you would in the traditional 'paper' way.

Related Links

Electronic Commerce Act 2000: read the full legislation

Check out the full details of EU electronic commerce legislation