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CONCLUDING CONTRACTS BY MEANS OF INTERACTIVE WEBPAGES
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Concluding contracts by means of interactive webpages.

Interactive webpage – attempts of defining.

This thesis are confined to transactions concluded by means of interactive webpages so even if it would be unreasonable to go into technical details it is necessary to show the basic criteria allowing to distinguish such traditional (passive) webpages from interactive ones.

While static webpage constitutes a marriage between HTML and hypertext than interactive webpages must include at least two more elements PHP (or similar language) and databases. Probably everyone is acquainted with the idea of a database (as a good example could be given a phone book) the difference resulting of the fact that it is digitalized is limited to the mere functionality. PHP (abbreviation from „PHP: Hypertext Preprocessor”) is programming language designed for WWW programmers which allows for creation of dynamic applications WWW which cooperate with electronic databases.

In practice that means that when a customer attempts to access an online shop (in a form of an interactive webpage) the application WWW placed on the server18 using a database (or databases) in real time provides customer with information and afterward allows to place an order. A webpage presented on customers screen is generated anew, every time customer wants to see it. This situation allows for providing customer with highly individualised contents despondingly for instance from: Member State where customer accesses the webpage, his previous visits, etc…

Difference between passive and interactive webpage presenting goods or services for sale is that while the former in practice serves as an electronic brochure or catalogue (at most allowing to send an email ordering a particular goods or services) than the latter allows to place an order, and “interacts” with customer showing availability of goods, total price of an order, in case of tangibles whether goods may be sent under the given address. While static webpages present only slight improvement in comparison with traditional paper advertisements, leaflets, or catalogues than interactive webpages constitute a new quality in online trade.

The functioning of such a webpage may be much more complicated, basing on customer’s profile it may give him suggestions as to the products he may be interested in, it may allow client to make a payment, trace the order, and much more – but the constitutive elements are dynamic generating of webpage contents and cooperation with database allowing to make, analyze, and consequently “accept” or “reject” an order.

Interactive webpag1es to some extent may be treated as an retail equivalent of EDI (Electronic Data Interchange).

Transactions concluded by means of interactive webpages

Technical aspect

In practice conclusion of such a contract consists of several steps. The first step is the same for contracts concluded by means of both passive and active webpages – customer must acquaint himself with goods or services offered by the entrepreneur. At this point ands role of passive webpages, in case of interactive webpages customer may proceed to next stages: choosing required goods, providing data concerning delivery, payment and finally confirmation of transaction.

Procedure of contract’s conclusion in European law

Crucial for the online conclusion of contracts within European law is directive on e-commerce. During work over this directive significant efforts were scarified to determination of the procedure of conclusion of a contract and the moment when the contracts starts to bind parties. Emphasized was significant vagueness – what was indicated the same click on the icon “OK” could have different legal implications dependently on the legislation of particular Member States.

This directive, to constitute a useful platform for harmonisation, had to contain some assumptions concerning the issue of procedure of contract’s conclusion. In the original form article 11 of the directive could be applied when information service provider was making an offer and the choice of service recipient was limited to simple acceptance (or rejecting) of this offer. Article 11 in such shape could not be used for the purpose of assessing nature of advertisements, price lists and other information placed on webpages.

This situation has changed when, after changes to article 11, the conception of clear reference to service provider’s offer and service recipient’s acceptance has been abandoned. Instead, for the purpose of describing service recipient activity the phrase “placing of the order” was used what could be interpreted as an offer as well as acceptance.

Still the conception of article 11 consisted in lengthening of the “normal” procedure of conclusion of contract. Originally, the procedure of online contract conclusion consisted of four steps: service provider’s offer, recipient’s acceptance, provider’s acknowledgement, recipient’s confirmation of the acknowledgement. Controversies evoked the last – forth – step necessary for contract’s conclusion and finally the European Parliament proposed its removal.

Second version of the article 11 reduced the procedure to three steps resigning from the confirmation of the acknowledgement, and determining the moment of contract’s conclusion as taking place when service recipient received the acknowledgement.

The final version of the article 11 maintained three steps necessary to conclude a contract however it does not regulate the moment of contract’s conclusion any more. As a result this article does not determine whether information placed by service provider on his webpage ought to be considered as an offer or rather as invitation to prepare an offer – the directive seems to be neutral, as to this point, and the answer should be sought in Member States legislation.

So currently three steps are necessary for the conclusion of a contract by means of an interactive webpage:

  • Service provider invites a customer to placing of the order,
  • Service recipient places the order,
  • Service provider acknowledges reception of the order (accordingly to recital 34 of directive’s preamble: the acknowledgement of receipt by a service provider may take the form of the on-line provision of the service paid for).19

Offer and invitation to prepare an offer in Polish civil law

Polish civil law does not contain any provisions unambiguously determining whether presentation of goods in an online shop (shop in a form of interactive webpage) constitutes an offer or rather ought to be treated as invitation to making offers.

Act on providing services by electronic means contrary to directive on electronic commerce does not contain any provisions regulating the procedure of contract’s conclusion, such provisions were introduced however into the Polish Civil Code in a form of article 661 (presented below).

Act on protection of some of consumers’ interests in article 6.2 says that proposition to conclude a distance contract may take form of an offer, invitation to make an offer, or invitation to making orders or undertaking negotiations. This provisions are correlated with obligations imposed by Article 9 which imposes upon entrepreneurs obligation to provide consumers with specified there information every time entrepreneur invites consumer to conclusion of a transaction.

Amendments to the Civil Code passed on the 14 February 2003 introduced among others new article 661 which regulates the issue of an offer made in electronic form. While §4 of this article explicitly excludes application of those article to contracts concluded by means of e-mails and similar means of individual communication, than it does not allow to unambiguously determine the nature of WWW.

In the context of informational duties, article 661 presents a compromise similar to this applied in the act on protection of some of consumer’s interests. Article 661 §3 imposes upon entrepreneurs obligation to provide information enumerated in §2 also when entrepreneur is not making an offer but inviting to negotiations, inviting to make an offer, or concluding contracts by other means.

In farther interpretation of the nature of webpages may help article 71 of the Civil Code which in case of doubts indicates that announcements, advertisements, price lists, and other information directed to the public should be treated not as an offer but as an invitation to conclusion of a contract.

Usually mostly on the basis of this article transactions concluded by means of webpages were treated as invitation to conclusion of contract. For this purpose so important for consumer protection is extension of informational duties in the act on protection of some of consumer rights and in the article 661 of the Civil Code of informational duties on all situations when customer is invited to conclusion of contract.

Article 543 of the Civil Code

In context of interactive webpages important is question whether information about products placed there should be considered as an offer or rather invitation to negotiations? To answer this question it is necessary to think over if sale of goods by means of an interactive webpage fulfills all prerequisites of article 543 of the Civil Code saying that: „exposition of goods in a place of trade to a public with indication of the price is considered to be an offer of sale” or not. Positive answer to this question requires cumulative presence of four elements.

First of all, a particular seller must expose specific merchandise not accidentally but deliberately and for the purpose of selling it. It is possible to interpret from the Supreme Court’s resolution of 31 July 1985 (signature: III CZP 36/85, OSNCP 1986/6 poz. 89) that there is a presumption that goods displayed in a place of trade are designed for sale. In this resolution court ruled that although article 543 of the Civil Code imposes obligation to conclude a contract with everybody who demands it onto subject exposing merchandise in a place of trade to public however customer’s declaration that he wants to purchased encyclopaedia exhibited in a bookstore does not result in conclusion of a sale contract when this book was marked with information “closed sale – teachers’ allowance”.

It may cause justified doubts, whether presentation of goods on a webpage fulfils this condition. While very convincing seems opinion that presentation of a product in a form of a picture another visualisation or even verbal description satisfies conditions set by article 543 (for example as an analogy to display goods in a shop window). However sometimes suggested is that while an offer presented in art. 543 is directed ad incertas personas, than it may concern only a thing defined as to its identity.20 Assumption of this interpretation of article 543 would result in exclusion of most of transactions concluded online from its scope.

Secondly the merchandise must be exposed in the trading place. As a such place may be considered every place where goods are offered for sale – in its judgment of 9 December 1993 the Supreme Court held (in the context of charging administrative fee) that as a place of trade may be considered even pavement, on a condition that it is place where transactions are concluded (III ARN 66/93, OSNCP of 1994/139).

The third condition that must be fulfilled is exposition of a merchandise to public – practically it means that everybody present at the time when merchandises are presented in the place of trade must be able to get acquainted with the terms of sale. Otherwise the offer must be directed ad incertas personas. Thus, it will not constitute an offer, when merchandises are displayed during a closed event access to which have only invited guests.

Fulfillment of the last prerequisite requiring that goods are marked with price, is not only consistent with the article 66 of the Civil Code requiring that offer should describe all the essentiallia negotti (which in case of a sale contract include the price) but also is obligatory anyway since article 12.1 of the Law on prices requires that goods intended for retail should be marked with price.21

The answer to the question how conditions presented above are being fulfilled by interactive online shops is a difficult one. What may be said with a considerable certainty is that difficult would be finding unquestionable arguments against application of the article 543 to online shops. Goods displayed on such a webpages are definitely designed for sale and if to consider flexibility of the notion place of trade – it rather may be extended onto websites. Unless such a webpage is password protected (what is not common to say least) it may be accessed by anyone who has a computer connected to Internet (possible is designing webpage in a way stopping visitors from particular countries, but again it is very rare) what is more probable is placement on a webpage notice that transactions are available for residents of particular countries, or particular categories of customers. Still presentation of goods on such a webpage may be considered as a conditional offer.

Argument raised in favour of treating presentation of goods in an online shop as invitation to making offers, is that such a webpage is accessible to unlimited amount of clients and consequently entrepreneur possibly may fail to supply all the ordered goods. Such an argument results of analogy comparing sales by means of an interactive webpage to other distance contracts especially to catalogue sales basing on catalogues sent to customers. Such a comparison true in the context of static webpages (webpages presenting merchandises and allowing ordering them by means of e-mail or another means of distance communication) fails when applied to interactive webpages.

The latter offer possibilities of communication with customers incomparably more efficient than printed catalogue; most of all by being connected to a databases they allow to inform consumers of the lasting supplies of a particular goods, their availability and foreseen delivery time and eventually even stop taking orders for a particular merchandise.

However, such a connection with a database, while being possible and widely used, does not constitute a prerequisite necessary to qualify a webpage as an interactive online store. For that purpose it is enough that such a webpage provides option of interactive purchasing goods (for example by means of a form) instead of being limited to catalogue-like information on products and means to order them.

Consequently it is possible that customers ordering goods online (what in such a situation would be understood as accepting online offer) would exceed available supply. Two potential solutions may be applied here:
First is treating such an offer as conditional “until supplies last” – in a sense situation of an online seller may potentially become similar to situation of sellers in economy with demand exceeding supply which was characteristic for situation in the Polish People’s Republic. Consequently it is not unjustified to quote here ruling of the Supreme Court of 6 December 1982 (II CR 550/82) in which the court said that in situation of noticeable lack of some goods, especially attractive merchandises, happen situations when the supply is insufficient to cover increased demand for these merchandises. For the purpose of solving, in socially acceptable way, this situation some sellers apply practice of advertising that sale of particular goods due to their limited supply, will be conducted in the order of incoming orders. In such situation we deal with an offer, with one resolutive condition, what means that after exhaustion of the available goods, the offer does not bind offeror any more.

I think that such an approach would be perfectly applicable for the purpose of online sales, however (in case of consumer sales) there is at least one more possible argument; namely article 12.1 of the Law on protection of some of consumers’ rights providing that entrepreneur ought to perform a distance contract within not more than thirty days what leaves him significant time for acquiring temporarily unavailable merchandises. Moreover art. 12.2 of the same act, allows entrepreneur (in case of product’s inaccessibility) to withdraw from performing the contract notifying consumer not later than within thirty days from the contract conclusion. Besides notifying consumer he is obliged also to return all the money received up to this time. If to assume that it is consumer who makes an offer and it is absolutely up to the entrepreneur whether he accepts it or not, than unclear seems the very purpose of this provision, giving entrepreneur so numerous and convenient means of withdrawing from already concluded contract.

Inclusion of this obvious obligation (even more surprising in the context of article 11 of the same act forbidding imposition onto consumer obligation to pay the price before he receives ordered merchandises) Z. Radwański explains as excluding compensative liability resulting of nonperformance of the contract.22

All these provisions along with article 12.3 tend to moderate entrepreneurs liability which resulting of conclusion of a distance contract he is not able to perform, moderating thus consequences of treating presentation of goods on his webpage as an offer.

Still what must be admitted, despite strong arguments for the opposite, in Polish doctrine definitely prevails opinion that the contents of all webpages presenting goods or services designed for sale constitute an invitation to prepare an offer.23

Time and place of contract’s conclusion

Time and place of contract’s conclusion in European law

Time

The most important act of European Union law regulating procedure of concluding online contracts is directive on e-commerce. As I have written above the contents of sacrificed to consequent steps of procedure and time of conclusion article 11 has undergone considerable changes during the preparation of the final directive.

While the initial versions of this article determined the moment of contract’s conclusion as taking place when service recipient received the acknowledgement (third step of the procedure of concluding contract) than the current version does not regulate this question.

Article 11 introduces a common for both transactions concluded over interactive webpages and by individual means of communication, determination of the moment when the order and the acknowledgement of receipt are deemed to be received. Namely when the parties to whom they are addressed are able to access them.

In case of an order placed through an interactive webpage it means (under the condition that it functions properly) practically instantaneous reception (interactive webpages are typically numbered among instantaneous means of communication).

Place

When it comes to the place where an online contract is deemed to be concluded EU law presents no general rules which could be used to answer this question, thus leaving this issue to Member States’ regulations.

What is however important from the point of view of consumer transactions the very place of contract conclusion is not the most important factor in establishing consumer’s rights. Not only the Brussels Convention but also Lugano Convention and Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters allow consumers to bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled or in the courts for the place where the consumer is domiciled irrespectively of the place where the contract has been concluded. This right may be performed when transaction fulfils certain criteria discussed in detail in the last chapter of this thesis.

Time and place of contract’s conclusion in Polish law

In determining these two issues necessary is reference to the Civil Code, they are regulated by art. 70 § 1 and 2. Accordingly to art. 70§1 in case of doubts a contract is concluded at the moment when the offeror receives declaration that his offer has been accepted. Time when the entrepreneur is entitled to accept such an offer is strictly limited.

The fact that an interactive webpages may be classified as an instantaneous means of communication produces a considerable doubts as to the mutual relations between articles 66§2 and art. 661§1 of the Polish Civil Code, in the context of declarations placed by means of such webpages. The former says that an offer made in the presence of the other party or by instantaneous means of communication stops to bind the offeror if not accepted instantly. The latter determines only that an offer made in electronic form binds the offeror when the other party instantly confirms its reception.

In my opinion the provision of article 66 §2 should be treated here as lex specialis to article 661§1 – while the latter regulates offers made in response to all kinds of offers made electronically, with the exception of contracts concluded by individual means of communication, than the former would refer only to this special situation when a webpage may be qualified as an instantaneous means of communication.

Situation is different when it comes to the entrepreneur’s reply – acknowledgment – if it takes a form of a webpage displayed on customer’s screen it is accessible immediately. On the other hand when it is sent by an email it is deemed to be accessible at the time it reaches the other party’s mailbox on the server of his ISP; not necessary is downloading of such a message onto his (her) own computer.24

Moreover due to the importance of this issue to consumers purchasing through online shops (who are typically qualified as offerors) worth consideration is question how ought to be understood term “instantly” and whether it ought to be treated in the same ways in both the case of acceptance of an offer and the mere acknowledgement of its reception. I am convinced that due to the different nature of these two declarations legitimate is applying different standards of to each of them (of course if to assume that to offers made by means of interactive webpages apply provisions of art. 66§2, such distinction will refer only to passive webpages).

While the acknowledgement as ratio legis has the mere confirmation that telecommunication system worked properly25 and as such ought to be treated as the mere declaration of knowledge that the offer has reached entrepreneur’s computer and not familiarity of the offer’s contents. As such perfectly acceptable is treating the term “instantly” here as requirement of sending such acknowledgment as soon as possible, if feasible automatically (what in practice constitutes a rule) upon offer’s reception.

This issue however is not free of doubts. In the opinion of W. Kocot, regardless of the fact if it is produced automatically or rather in a way involving direct activity of the addressee it is always a declaration of will.26 Different opinion is presented by Z. Radwański and P. Machnikowski – who claim that such acknowledgment constitutes a declaration of knowledge which opinion seems much more convincing.27 Irrespectively of the acknowledgment’s nature – it is undisputedly a condition necessary to render customer’s offer binding.

When it comes to the acceptance of an offer the rigour, in my opinion, ought to be less severe. The seller should be given time to consider an offer – however it is difficult not to agree with W. Kocot that treating the notion “instantly” in article 66 §2 as giving a fortnight for reply (what so far has been a rule) is unsustainable in the conditions of contemporary conduct of legal transactions – especially when it comes to declarations given in electronic form.28

In the light of aforementioned remarks, justified seems to be different treating offers made in response to invitation to prepare an offer placed on passive and interactive webpages, qualifying the latter as made by instantaneous means of communication in the sense of art. 66§2. While in the case of a passive webpage offeror typically, independently formulates his offer (usually in an email), than in case of interactive webpages the possibility that consumer will modify entrepreneur’s standard contractual terms is technically excluded (unless the seller leaves some margin of freedom) and it may be reasonably expected that the entrepreneur will accept his own standard contractual terms.29

Currently, after entry in force of amendments of the 14, February 2003, there are two provisions regulating time when an offer placed in electronic form is binding for the offeror – and consequently when can be validly accepted; first is art. 61§2 and the second is art. 661§1.

Theoretically the question which provision ought to be applied in which situation is quite clear. As art. 661 in §4 contains excludes application of this article to transactions concluded by means of email or other means of individual communication, while on the other hand article 61§2 is formulated in a way implying its application to declarations of will sent by email, suggest that depending on the form of contact offline or online applies either art. 66§2 or art. 661§1.

Consequently it could be assumed that an offer made by a consumer who wants to purchase a product by means of an interactive webpage applies article 661§1, his offer binds him only when entrepreneur instantly confirms (acknowledgment of placing the order by the service recipient in the terminology of directive on e-commerce) reception of such an offer.

Quite persuasive is opinion presented by W. Kocot, that it is acceptable to skip this stage when the entrepreneur is willing to instantly accept customer’s offer; in other situations necessary is a separate declaration of will containing acceptance of placed offer. The time when this declaration of will has been placed should be determined accordingly to article 61§1 or 2 – dependently whether such declaration of will takes electronic form or not.

Such acceptance in relation with consumers definitely cannot take form of information just displayed on their screen as a webpage. This results of the obligation imposed by directive 97/7 art. 5 – accordingly to this provisions entrepreneur must deliver information specified in this directive in a durable form. This obligation has been implemented into the Polish legal system by article 9.3 of the act on protection of some of consumer rights obliging entrepreneur to provide consumer with such information in writing, disputable is whether an ordinary email (not signed by means of a digital signature) fulfils this requirement but certainly it would be the minimal requirement.

The place of the contract’s conclusion is regulated by article 70§2 of the Civil Code. In respect of contracts resulting of an offer placed in electronic form the contract is deemed to be concluded in the offeror’s place of domicile, at the time of contract’s conclusion.