Online contracts what are they?

As consumerism advances to an all-out blown online environment, some fundamentals of online agreements should be considered.

Transacting online with your bank, purchasing goods or services online, or just becoming a member of an online website, all involve some form of contract the consumer will enter into.

The reality is that majority of consumers do not read the online contract which they have agreed too. This failure to review the contract terms and conditions is an enormous risk to the consumer.

There are thousands of websites that are registered in Australia and a vast majority are breaching the Australian Consumer Law for misleading or deceptive conduct in content. The issue at the moment is that the general consumer does not realise whether the website they are visiting is misleading or not. Then only when a purchase has gone bad or a breach of confidential information has occurred, does the consumer really take note and raise a claim. However, by this time it is usually too late and damage has been done.

So what are the types of contracts that exist in the online world?

There are three type of agreements in the online environment. These include Shrinkwrap, Clickwrap and Browsewrap agreements.

The term shrinkwrap agreement originated from the concept where the seller of computer software wrapped the software in plastic packaging. Then when the packaging was opened by the consumer the contract was formed.

The term clickwrap agreement evolved from the process where there were terms and conditions on the screen, such as when a disc of software is loaded and the screen displays a requirement that the user click a virtual button to proceed. This process of clicking the virtual button resulted in a contract being formed.

The term browsewrap agreement is a little bit more complicated because it involves a web page that has hyperlinks which if clicked, will take the consumer to another page within the website or to another external website where the terms and conditions are displayed. If the consumer is on the main page where there is a virtual button and hyperlinks displayed, and the consumer clicks that button to purchase goods or services, or sign up to a membership of some form, the consumer has entered into an agreement.

The question with shrinkwrap, clickwrap, and browsewrap agreements is whether they are valid or have resulted in misleading or deceptive conduct to the consumer.

The best practice for the consumer to limit their risk with transactions on line in Australia is to consider the following five rules:

1.If the company or business does not have a physical address displayed on its website as example, level 28, 303 Collins Street Melbourne, then contacting the company will be difficult if there is a dispute. This shows that the vendor does not want you to know where they are operating from. So close the website and move on to the next search result.

2.If the company or business has no telephone number displayed on its website, just don’t risk it, move onto the next website. Where a telephone number has not been displayed this demonstrates that the vendor of the website does not want to communicate directly with the consumer, which makes it very difficult in relation to a dispute if one arises.

3.If the company or business does not display its ACN or ABN number on the website and you are purchasing goods or services from within Australia, close the browser and move onto the next company or business. All companies and businesses which are legitimate in product or consumer services will display their ACN or ABN number to show that they are a registered company or business in Australia. The ACN and ABN number are important because if there is a dispute, it will be easier to track down the vendor of the website to raise a claim against.

4.If there is no terms & conditions, legal notices, or privacy policy disclosed on the website, close the browser and move onto the next search result. These points raised are important in relation to disclosure requirements to the consumer, and if such content is not displayed on the website or hard to locate, it means the vendor is not being forthcoming with proper disclosure to the consumer.

5.Where there is a virtual button to click to purchase goods or services, and no agreement has been presented to the consumer, whether through scrolling through an agreement or selecting a check box to accept the conditions which can be displayed by clicking a link, then don’t click the virtual button. Move onto another website.

All online contracts should be reviewed properly by a consumer before accepting any goods and services, and the best practice is to take a step back before clicking ‘Accept’ or ‘Submit’, and review the agreement that is being entered into.

When you are not sure if your interests are secured properly, call me, and get that legal advice to protect your legal rights and interests.

The comments in the aforementioned do not constitute legal advice and are general in nature, and if legal advice is required please contact: John Melis at Legal AU Pty Ltd (03) 9999 7799

Legal AU Pty Ltd Lawyers are “Liability limited by a Scheme approved under Professional Standards Legislation.”