If you have ever made or accepted an offer by any form of electronic communication (eg e-mail, social media or an instant messaging service) then the latest developments in the area of electronic contract formation will affect when that offer and acceptance is legally enforceable. The Electronic Transactions (Contract Formation) Amendment Bill (Bill) has passed its first reading and has been sent to the Commerce Committee. The Bill, if passed, will clarify that the communication of acceptance by electronic communication will be deemed to be accepted at the time of receipt of the offeror's acceptance.
 
In practice this will mean that when acceptance of an offer is made electronically, for example responding to an offer by e-mail stating "I accept the terms of your offer", then this acceptance will be enforceable when that e-mail is received by the party making the offer. This development signifies a departure from the application of the normal postal acceptance rule, which provides that acceptance is deemed effective when acceptance is posted to the offeror.
 
The question remains of what actually constitutes 'receipt of the acceptance'? Will it take place when the electronic communication accepting the offer is actually opened by the offeror, or when it enters the offeror's electronic communication system? The Electronic Transactions Act 2002 (Act) outlines that where the offeror has designated an information system (eg an e-mail address) to which to receive an electronic communication, that electronic communication will be deemed to be received when it enters that designated information system. In all other cases, the Act provides that an electronic communication will be taken to be received when the e-mail reaches the attention of the offeror. We assume that these rules will also apply to 'receipt of the acceptance', however the Commerce Committee will hopefully confirm the exact position on this.
 
As a general best practice rule, if the electronic/email system to which you are communicating the acceptance of an offer crashes, or an e-mail sent accepting an offer bounces back, you should send a follow up e-mail to ensure that your acceptance is effectively relayed to the other party.  This may mean resorting to a different means of delivery.

Submissions are due by 27 June 2013. If you are interested in making a submission, or require any further information on the Bill or the submission process, please feel free to contact below.

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