The Law vis-à-vis Electronic Commerce
Authors: Endeshaw Assafa 
Published: May 2011

A great deal of uncertainty surrounds the impact of the continuing growth of electronic commerce (e-commerce) on existing law. While commercial law has evolved over the centuries in response to the development of trade in goods and services, within or across nations,1 the emergence of an electronic medium (‘cyberspace’) as an additional avenue for trade has pushed to the fore many questions: whether and how an adaptation of existing law would be possible, appropriate or sufficient to catch up with the problems thrown up by the new medium. For one thing, the nature and effects of transactions that would ordinarily have been taken for granted had they occurred on non-electronic media confound established notions of commercial law. Secondly, the unpredictability of the ultimate consequence of such transactions to the respective trading partners, who would be more likely to come from different jurisdictions, prompts scrutiny of pre-existing, widely accepted formulations in domestic trade law, custom and treaty among nations. A major feature of the emergent situation is that the impact of e-commerce on the law has not been across the board, simply because e-commerce has not been developing evenly. Most transactions to date relate to the purchase of computer hardware or software or the supply of information of various types: plain news, financial data, entertainment, education, travel, advertisements, health and DIY tips. These items have one characteristic, namely the buyers’ lack of interest in, or disregard of, any need to have to conduct checking or inspection prior to purchase or, at any rate, before delivery. In light of the general uncertainty surrounding the status of the online buyer and seller, the relevant law and of how it might be applied on behalf of a buyer claiming redress, the purchase of “safe” items acquires a precautionary significance. In other words, the very nature of the items involved in the transactions seems to rule out any fundamental failure that could surface at a later stage and necessitate the intervention of the law to resolve the consequences of that failure. Obviously, once money has passed from the buyer to the seller, the path to recovery of that money, let alone further damages as would be expected under normal contract law, could be too complicated for the buyer to understand or pursue. What makes the plight of an on-line buyer who seeks redress intractable is that solutions to on-line legal disputes are only just evolving in bits and pieces. New rules have begun to emerge in the form of statutory reforms in single jurisdictions or through case decisions on disputes arising from on-line transactions. However, the ambit and applicability of the evolving laws tend to be subject to time, the nature of the concrete problems they are meant to address, as well as the diverse contexts. Consequently, pre-existing laws have not undergone modification or replacement by the emergence of e-commerce in all respects, to the same extent, nor in every jurisdiction. This chapter explores the nature of legal changes that have been propelled by the onset of e-commerce and the likely course of future developments. First, we present a brief summary of the impacts on contract law followed by a discussion on the liabilities arising from on-line transactions. Then, the focus is on issues of security and privacy of transactions. Finally, we cover the incipient forms of dispute resolution in e-commerce. The conclusion affirms that the law as applied to e-commerce is still in continuous flux and will take more time to acquire a definite shape. In particular, it underscores the urgency of meeting with the ever-apparent demand for an international treaty or agreement, at least parallel to existing treaties in contracts or sales.