The enforceability of incorporated term in electronic agreements

Abstract

This article seeks to evaluate the validity of different methods of incorporating terms into electronic agreements, and to what extent the use of these different methods may influence the enforceability of the incorporated terms. The two most common methods of electronic incorporation, namely click-wrap and web-wrap, are set out, and the status of their incorporation is analysed by studying positions in the United States of America (US) and the United Kingdom (UK), before referring to South Africa. The common law position regarding incorporated terms for both signed as well as unsigned documents is discussed. It is argued that, irrespective of the method of incorporation adopted, incorporated terms would most likely be valid in light of the provisions of the Electronic Communications and Transactions Act. This notwithstanding, due care must be taken in how the different methods in themselves are used, as this might still affect whether particular incorporated terms will be enforced. This is especially pertinent in the light of contracts which may fall under the ambit of the new Consumer Protection Act. However, neither the Electronic Communications and Transactions Act nor the Consumer Protection Act seeks to replace the common law, but rather adapt it and create a general framework for such types of agreements and transactions to operate in. It is submitted that the law applying to incorporation by reference in signed documents should apply to those instances where click-wrap is used, whereas the law applying to that of unsigned documents should apply when web-wrap is used.